Debt Rattle November 18 2016
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Unknown Army of the James, James River, Virginia. 1865 • The End of Globalization? (Spiegel) • Global Trade Is Slowing (BBG) • US Recovery Is Heading
[See the full post at: Debt Rattle November 18 2016]“Who could have imagined in 2006 that such an outlandish billionaire like Donald Trump could become president of the United States? Who would have believed that the British would leave the European Union?
Who? Literally everyone on the Alt-Media. Just like the .com and ’08 crisis. Just like the phony war stories and how stating 10 new wars would not calm the world on a route to prosperity. Just like how they said the bailouts would not work and Greece would be devastated and not fixed. Literally everyone but the main media.
Next line, “Who would think populists would take the German popular vote?” Um, Everyone? A popular vote is popular; it’s a logical tautology. And speaking of, in a democracy, what is “populism”? A way to say that all the things we were doing before had no popular mandate and were shoved down on the electors? Why would we complain that in a democracy, the people are being heard? Because it would prevent harvesting the people for our profit?
“It is a fact that globalization and free trade have increased global prosperity, but they have also increased inequality”
Then they didn’t actually create prosperity then, did it? If no one but the already wealthy participated in it, it probably created poverty. You might want to look into that: it could help explain this confusion about voters and world events.
Speigel, you’re falling apart.
“What a tangled web we weave / when first we practice to decieve.”
Re Dr. Diablo
Well said
“…it should be remembered that consumption drives roughly 2/3rds of the economy…”
Does it?
Y = G + I + C + NX
Last year GDP (Y) was about $18T, G + I + NX totaled $6.5T leaving $11.5T for consumption. This must be where the 2/3rds number comes from. Except…
Consumption is driven by G and I, not vice-versa. C is a dependent variable, dependent on G and I.
G + I is top-line spending that leads to more spending…people have to pay their bills and they buy stuff …if there’s anything left over. That spending generates more income that begats more income and so on until the flow stops… about $11.5T in consumption later, killed by taxes and savings.
Hard to imagine much consumption happening if we took away that $6.5T in income. On the bright side we wouldn’t have much tax liability either.
I have no real clue as to what Trump’s beef with Yellen is but I do know what it is going to be. It is going to be that the Fed is going to ‘raise interest rates’, probably in December. Never mind that the 10 year Treasury note closed today at 2.34% today, 30% higher than it was just before election day.
Actually I do have a clue what Trump’s beef with Yellen is. It is that she didn’t ‘raise rates’ in order to hurt Obama and help Trump or some such nonsense. Now however he is going to go nuclear when the Fed ‘raises rates’ when he is about to become president. I used the ironic quote marks around raising interest rates because the Fed does not set rates the market does. In any case if rates continue to rise then Trump is going to be the biggest fan of QE since Bernanke.
Everything Trump wants or thinks he wants is absolutely dependent upon abundant liquidity and ultra low interest rates and soon enough Trump is going to demand QE. Actually everything that everyone wants is contingent upon more QE. I expect $4TN during the next 4 years for starters, maybe more later. Which will have to include the purchase of corporate debt. Perhaps like the ECB’s direct purchase of corporate paper.
My scenario, and my scenarios never pan out, is a significant selloff in the stock market soon, possibly after a December ‘rate increase’ by the Fed, which will ‘force’ the Feds hand in announcing more QE and then a stupendous rally.
As to those wanting change, what were you thinking when you thought Trump would deliver it? Of course the exact same thing would have happend under Clinton except for the brief period when some people actually thought the president elect wanted higher rates. Trump pretended to or sort of maybe thought he did, but won’t now. In my minds eye I see massive rallies outside the Eccles building by Trump supporters demanding QE.
Dr. Diablo – well argued. I am sick of Spiegel and their take on just about everything – they are a nothing but media slaves seeing the world the way they are told to see it. It’s getting annoying like the whole team needs sacking and replacing with people who know stuff. I am also getting tired of seeing pictures of the KKK in the newspaper over here in OZ to support notions of the evils of retreat from globalisation. I am so glad for your vent and I would go on a big one but I am not much articulate on stuff. But I aint stupid either, unlike most people with jobs in media these days – because we now hire stupid people because the adds selling shit for global markets pay for their stupid jobs!
I’m so irate I’m going outside to water my fruit trees and plant some dope! I’m gunna need it.
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