Worst Mistake

GUALFIN, ARGENTINA – By our calculation, it took just 76 days for President Trump to get on board with the Clinton-Bush-Obama agenda. Now there can be no doubt where he’s headed. He’s gone Full Empire. Not that it was unexpected. But the speed with which the president abandoned his supporters and went over to the Deep State is breathtaking.

    Once there was only a Trump fragrance called Empire… now he has gone full empire himself

 

Among the noise and hubbub of the election campaign, there was one message coming from the Trump team that was music to our ears. Middle East wars? He was against them, he said.

He claimed to have opposed the 2003 attack on Iraq. He said it was one of the “worst mistakes” the country ever made. As for further involvement, why waste American lives and American wealth on wars you can’t win?

“America First,” he said. This was a refreshing position. It put the Republican neo-cons and Establishment Republicans against him; many went over to Hillary rather than risk giving up their think tank grants and consulting fees.

 

Tweets by Bill Kristol, one of the best known pro-war neo-con think tank appendages and political pundits in the US. It is quite amazing that this man is actually considered a “conservative”. He is probably not in the least concerned that his views are widely rejected by American citizens, safe in the knowledge that they can be “brought around” every time with a sufficient dose of war propaganda (generally, this has always been true). However, mainstream media are fading away, reaching fewer and fewer people every year. Controlling the narrative is no longer as easy as it once was.

 

A 2013 poll showed 52% of Americans thought the U.S. should “mind its own business internationally.” But the elite gained power and money from foreign wars; they weren’t going to give them up. Non-entitlement spending in the swamp goes largely to cronies in the military-security industry.

 

Perfect Deep State War

But Donald Trump promised a “new foreign policy.” No more trying to be the world’s policeman. No more fighting other people’s battles… and making things worse. No more wasting American money and American lives on foolish, unwinnable wars.

Ending America’s pointless and unsettling romp in the desert would be a good first move. The bill for these misadventures is now said to be $7 trillion. As to Syria, Trump was typically direct. Don’t attack the country, he warned Barack Obama in a 2013 tweet, or “MANY VERY BAD THINGS WILL HAPPEN…”

 

The Donald couldn’t have been any clearer in 2013… but that was then, and this is now.

 

But then, last week the last great hope for the Trump administration blew up in Syria. Now the neo-cons are delighted. And the cronies. And the zombies, too.

Here’s the outlook: no real change to O’care. No cutbacks in entitlements. No attempt to balance the budget. No belt-tightening at the pudgy Pentagon (instead, it will get more money).

And now this: The wars in the Middle East will not only go on… they will accelerate. For now, the U.S. is not only fighting terrorists. It is also fighting the people who are fighting the terrorists.

It’s a perfect Deep State war: It is guaranteed neither to win nor to lose, but simply to go on indefinitely. This gives the insiders more and more of the nation’s wealth to piddle away in absurd wars in preposterous places.

Meanwhile, Congress adjourned. When it returns in two weeks, it will confront another crisis of its own making. Bloomberg reports:

 

Government funding expires on April 28, which will give Congress five days to unveil, debate, and pass an enormous spending bill… or trigger a government shutdown.

“What a mess,” said Paul Brace, a congressional expert at Rice University in Houston, offering his own pessimistic view of the unified Republican control of the House and Senate so far under President Donald Trump. “It was so much easier when all you had to do was oppose Obama.”[…]

House Republicans “have differences of opinion. And they aren’t just political differences. They are policy differences,” said Republican Senator Rob Portman of Ohio.

 

Old & New Wounds

And so our incipient Doom Index is still flashing a warning. It will be tough for Congress to come to terms with its budget. The debate will open old wounds and gouge new ones.

Already, the federal budget deficit is expected to average $1 trillion a year over the next 10 years. Mr. Trump will want to spend more. We need to spend more on infrastructure, on the military, and to revive the economy… he’ll argue.

Many House Republicans, especially the idealists in the Freedom Caucus, will find it difficult to go along. Some will notice, cynically, that the whole program – including the attack on Syria – is little different from what Hillary had offered.

 

Long-term projection of the public debt-to-GDP ratio by the Congressional Budget Office (CBO); note that the CBO could easily turn out to be too optimistic with regard to future economic growth and the inexorable rise in entitlement spending – click to enlarge.

 

Consumer prices are already rising, others will note. Besides, who wants to go back to his home district after having signed on to $30 trillion of U.S. debt?

Others, the activists, will want to back Trump. The Obama years have been disastrous, they will say. The typical household is little better off than it was at the bottom of the last recession. Half of Americans are living paycheck to paycheck. And there are 66 million working-age adults without jobs, they’ll report.

The feds must do something! Increase spending to stimulate the economy (and not coincidentally steer a few bucks to major campaign contributors and other important hacks).

 

Runaway Locomotive

The more financially alert among members of Congress will recognize that eight years of stimulus has done little to help the real economy. These realists will see a runaway locomotive headed to a dangerous curve.

They’ll want to know how the feds will finance huge new deficits just as the Fed tightens interest rates. But the shrewdest among them will call their brokers.

 

Two famous “1-800-GET-ME-OUT” moments on Wall Street (charts via John Hussman), a.k.a. “sudden repricing events”, or as Bob Bronson refers to them, “mass-correlated hyper-volatile illiquidity events” (MCHVIE). It is generally advisable to sell before these events take place, even if one risks missing a little more upside. The investor class as a whole cannot avoid taking these losses, as all outstanding stocks are held by someone at all times. There is no mysterious Wall Street aether in which unowned stocks are floating about. Only a small number of investors will be able to side-step such events by selling to future bag-holders in time – click to enlarge.

 

The highest stock prices since the dot-com crash are based on the belief that, somehow, Team Trump will push through a corporate tax cut, leaving businesses with more after-tax money.

“That’s not going to happen,” they will say to themselves. They will want to get out of the stock market before other investors catch on.

 

Charts by CBO, John Hussman

 

Chart and image captions by PT

 

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • What Do “Think Tanks” Think About?
      “Russiagate” WEST RIVER, MARYLAND – We’re back at our post – watching... reading... trying to connect the dots. And we begin by asking: What do “think tanks” think about? The answer in a minute. First, there is a dust-up in the Washington, D.C., area. “Russiagate,” it is called. As near as we can make out, some people think the Trump team had or has illegal or inappropriate contacts with the Russian government.   It's all very obvious, if one looks...
  • Parabolic Coin
      The Crypto-Bubble - A Speculator's Dream in Cyberspace When writing an article about the recent move in bitcoin, one should probably not begin by preparing the chart images. Chances are one will have to do it all over again. It is a bit like ordering a cup of coffee in Weimar Germany in early November 1923. One had to pay for it right away, as a cup costing one wheelbarrow of Reichsmark may well end up costing two wheelbarrows of Reichsmark half an hour later. These days the question is...
  • Quantitative Easing Explained
      [Ed. note: This article was originally posted in November of 2010 - we have decided to republish it with updated charts, as it has proved to be very useful as a reference - the mechanics of QE are less well understood than they should be, and this article explains them in detail.]   Printing Money We have noticed that lately, numerous attempts have been made to explain the mechanics of quantitative easing.  They range from the truly funny as in this by now 'viral' You Tube...
  • The Three Headed Debt Monster That’s Going to Ravage the Economy
      Mass Infusions of New Credit   “The bank is something more than men, I tell you.  It’s the monster.  Men made it, but they can’t control it.” – John Steinbeck, The Grapes of Wrath   Something strange and somewhat senseless happened this week. On Tuesday, the price of gold jumped over $13 per ounce.  This, in itself, is nothing too remarkable.  However, at precisely the same time gold was jumping, the yield on the 10-Year Treasury note was slip sliding down...
  • Jayant Bhandari on Gold, Submerging Markets and Arbitrage
      Maurice Jackson Interviews Jayant Bhandari We are happy to present another interview conducted by Maurice Jackson of Proven and Probable with our friend and frequent contributor Jayant Bhandari, a specialist on gold mining investment, the world's most outspoken emerging market contrarian, host of the highly regarded annual Capitalism and Morality conference in London and consultant to institutional investors.   As soon as Jayant touches down in London, he is accosted by...
  • Monetary Madness and Rabbit Consumption
      Down the Rabbit Hole “The hurrier I go, the behinder I get,” is oft attributed to the White Rabbit from Lewis Carroll’s, Alice in Wonderland.  Where this axiom appears within the text of the story is a mystery.  But we suspect the White Rabbit must utter it about the time Alice follows him down the rabbit hole.   Pick a rabbit to follow...   No doubt, today’s wage earner knows what it means to work harder, faster, and better, while slip sliding behind. ...
  • Central Banks – Tiptoeing Toward the Exit
      Frisky Fed Hike-o-Matic We haven't commented on central bank policy for a while, mainly because it threatened to become repetitive; there just didn't seem anything new to say. Things have recently changed a bit though. A little over a week ago we received an email from Brian Dowd of Focus Economics, who asked if we would care to comment on the efforts by the Fed and the ECB to exit unconventional monetary policy and whether they could do so without triggering upheaval in the markets and...
  • The Anatomy of Brown’s Gold Bottom – Precious Metals Supply and Demand
      The Socialist Politician-Bureaucrat with the Worst Timing Ever As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold... or does it?   Former UK chancellor of the...
  • The Valium Era
      Don’t Be Fooled by These Calm Markets What is happening in the world of money? Well - the most striking thing is: nothing. It doesn’t seem to matter what happens. Dysfunction in Washington. Meltdown of the techs. No matter how rough the seas get, the markets glide along... scarcely noticing the storm-tossed waves below.   Thankfully the world's central planners are so well-versed in egging on the creation of an ever greater mountain of debt and seemingly limitless asset...
  • Is Trump a Modern Caesar?
      Putting on the Purple   Mayor: Drebin, I don’t want any more trouble like you had last year on the South Side. Understand? That’s my policy. Drebin: Yes. Well, when I see five weirdos dressed in togas stabbing a guy in the middle of the park in full view of 100 people, I shoot the bastards. That’s my policy. Mayor: That was a Shakespeare in the Park production of Julius Caesar, you moron! You killed five actors! Good ones. – The Naked Gun   Laura Loomer,...
  • The Fed Rate Hike and Gold – Precious Metals Supply and Demand
      Shrinking the Balance Sheet? The big news last week came from the Fed, which announced two things. One, it hiked the Fed Funds rate another 25 basis points. The target is now 1.00 to 1.25%, and there will be further increases this year. Two, the Fed plans to reduce its balance sheet, its portfolio of bonds.   Assets held by Federal Reserve banks and commercial bank reserves maintained with the Fed – note that while asset purchases and bank reserve creation are connected,...
  • How to Discover Unknown Market Anomalies
      Seasonax Event Studies As our readers are aware by now, investment and trading decisions can be optimized with the help of statistics. After all, market anomalies that have occurred regularly in the past often tend to occur in the future as well. One of the most interesting and effective opportunities to increase profits while minimizing risks at the same time is offered by the event studies section of the Seasonax app.   A recent event that had quite an impact on certain...

Support Acting Man

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com