For a short time, we should see some improvements. However, numerous structural flaws in the US economy ultimately assure economic collapse because those flaws have not been dealt with for decades, are not being dealt with in any of the Donald’s plans, and are most likely too far gone now to ever deal with. Trump’s plan will even make some of those structural flaws much worse in the long run.
What I describe in these economic predictions has considerable contagion possibilities for the rest of the world. While emerging economies have grown to where the US does not have the near-total economic dominance it once had over the world, it is still the world’s greatest economy (at least, in size). So, it is still true that, when the US sneezes, the rest of the world catches a cold … if not pneumonia.
What Trump’s victory changes most is the timing of economic collapse because his economic plan is bound to bring temporary lift, even as it worsens some of the structural flaws. The effect of the flaws I wrote about will take more time to develop than the improvements, but probably not much more time.
Let’s start with the positives:
Positive economic changes that are certain to result from the Trump triumph
Here is a list of economic changes, which I think are certain to bring some boost to the US economy in 2017 and will likely delay my epocalyptic predictions:
- It is certain that Trump’s tax plan will happen. While it may not happen entirely, something very close to it will certainly happen because Republicans have never seen a tax-reduction plan they didn’t like. Republicans hold certain economic convictions as tightly as religious dogma: they believe tax cuts will pay for themselves and so will not create huge worsening of the national debt. Every time they make tax cuts, they claim the cuts will stimulate investment, which will stimulate the economy, which means more businesses will produce more revenue, which means there will actually be more tax revenue, not less. They have never been right about this yet. We have NEVER made tax cuts without increasing the federal deficit under any president. That fact, however, never kills this dogmatic belief. Republicans also believe with religious fervor that targeting tax cuts to the rich in the form of corporate breaks and particularly capital gains cuts will create new jobs and trickle wealth down to the middle class and the poor. The fact that real middle class wealth has stagnated or even shrunk during every past episode of trickle-down economics never matters. Belief trumps truth. Since Republicans control the entire legislature and the executive branch and will be changing the balance of the Supreme Court, it is absolutely certain we will see major tax reductions that will come as our third and greatest round of trickle-down economics. The plan coauthored by Larry Kudlow has all of his support with conservatives and Republicans, too. Even if Trump were removed from office, most of his plan would become law.
- The stock market will rise … for awhile, at least. What we know from trickle-down economics is that it certainly does stimulate the stock market. The money that is saved on capital gains and corporate income and that is repatriated in corporate income from overseas largely goes into speculative gambling in stocks. Very little of it goes into capital construction or business expansion. Even before any of Trump’s proposed changes have happened, we are witnessing how the mere hope of such changes has caused a huge increase in stock-market speculation (both volume and prices) as investors try to reposition for this new reality. There was a brief stock market slump right when I said there would be once people started to question whether Trump’s plans would be enacted, but it didn’t last long because, as soon as Trump got into office, he moved rapidly via serial executive orders to start implementing many of his promises, quickly building faith that he will carry out most of them rapidly and with great determination.
- It is unlikely that Trump’s infrastructure stimulus plan will make it off the ground in 2017. While Republicans are certain to approve tax breaks, they are not big on massive government spending increases. Trump will find some strong resistance among Republicans to his increased spending; at the same time, Democrats remember well how Republicans battled against Obama’s plans to increase infrastructure spending in order to stimulate the economy. According to junior Republicans who eventually came out against Speaker of the House John Boehner, this was partly because Boehner and the Republican guard didn’t want Obama to get the credit for economic improvement. They put the good of their party over their nation’s good. So, Trump will likely find a lot of resistance there, too, as Democrats return this tactic.
- Spending will certainly increase in one area — the military. Republicans have proven for decades that no deficit is too big if it is going toward building a stronger military. They find support among Democrats for this, who have just as many wealthy donors in the military-industrial complex as Republicans have. They also find a lot of support among the general public — particularly conservatives — because conservatives like for America to be the strongest nation on earth. Besides being macho, defense and security have a strong argument behind them in a world full of terrorists. While Trump seeks to improve relations with Russia, he is also antagonizing relations with China. The US, under Obama, was already acting more aggressive in the South China Sea in order to keep China from controlling secondary trade routes. Trump will build on Obama’s lead there, and his trade battles with China may intensify conflict with China overall. Trump has stated loud and clear that the US military will be ready to look out for Japan’s national interests. At the same time, North Korea is picking a fight in order to beat its chest, which presses Trump to take some action against them. That may come about just as sanctions, but could involve some military saber rattling or countermeasures from the US that could escalate. Trump will take a greater lead than Obama did against terrorists in the Middle East, as he was critical of Obama’s restrained and somewhat ineffective efforts. Expect a more aggressive anti-terrorist policy. That means, as under Reagan, increased military spending will be more important than increased infrastructure spending, but military spending also stimulates the economy by creating jobs and boosting a number of major stocks.
- Regulatory changes will also lubricate the economy to move forward with less friction.
Economically, those are all strong short-term positives, regardless of what they bring further down the road.
Economic collapse will happen on Trump’s watch, probably later this year
In spite of these certain positive economic changes for 2017, there remains a countervailing globalist force that has already presided over numerous economic failures of its own making. These people will relentlessly attack Trump, and they will seek to pin their own failing recovery on him. Such an entrenched counterforce makes it impossible to say how much temporary good Trump’s economic policies can bring. Trump starts in a world where globalists have long ruled the nation’s central bank, which they have positioned to create US economic hegemony. Trump can change that over time, but probably doesn’t have time enough. Also, his lineup of Goldman Sachs executives in all financial offices of the US says that he won’t. Gobalists are also deeply entrenched in US intelligence agencies and the military leadership, where they have engaged in relentless nation building as they seek to shape the world toward the interests of their own political and financial establishment while also working in alliance with the interests of the UK and the rest of Europe.
They will do anything they can to restrain Trump’s plans to drain the swamp in Washington and as well as his plans to align with Russia and his plans to diminish nation-building efforts. How far and how quickly he can push against their resistance depends entirely on his and his followers’ ability to overcome deeply entrenched globalist powers that have steered the nations of “the West” for decades. All globalists in the world will oppose Trump.
Globalist are first trying to groom and massage Trump into their ways. They are also trying to thwart him through fake news in the media, slanted stories, political attacks, and by stirring up chaos and counter-revolution wherever possible. Even Obama has formed a foundation to try to muster as many protests against Trump as possible. To the extent those efforts fail to stop or change Trump, the financial establishment will, in the very least, try to make him the scapegoat for the failure of their past eight years of badly misguided recovery efforts.
If they cannot impeach him, as some are already working toward, the ultimate risk for Trump and his supporters is that the establishment will assassinate him. This risk is real enough that, for the first time in the history of the US (that I am aware of), we witnessed the nation’s largest mainstream news source (CNN) decide that one of the most important non-news stories it could trump up during the inauguration was a “what-if” story about how US leadership roles would be assigned if Trump was assassinated on the day Obama’s leadership expired but just before Trump got inaugurated.
That such a concern made it as a main CNN story shows there are many mainstream thinkers who see assassination as a realistic possibility, not as some hysterical conspiracy theory. CNN saw it as enough of a likelihood already in the public mind to make it useful fake news (fake in the sense that it filled news time but is not news at all, but (for the moment) pure fiction that teases liberal minds with a kind of “final solution” hope). Trump is Hitler, according to liberal mass hysteria (just as much as Hillary Clinton was Hitlery to conservatives). Both sides routinely demonize their opposition. As the flagship of the liberal media, CNN planted deep the implied seed of hope that Trump might be taken care of with a final solution aimed just at him. Of course, they would deny that they were raising incendiary hopes among liberal Trump haters.
Now that the revolution and counter-revolution have begun, there is no way I can say which force will dominate by the end of 2017, given the immensity of the forces, the entrenchment of the old guard, the resolution of the Trump revolutionaries, the huge flaws existing in the US and global economies, and the economic headwinds that I’ll lay out in my next article. What I can point out is that the globalists clearly begin with the upper hand by far, and they are certainly not going to give up. In fact, they are only beginning to implement their strategies to overcome Trump because they did not believe they would lose the election.
One of the things I said throughout the past year was that my many predictions about the Epocalypse (the epic and epochal, economic collapse into apocalyptic times) for 2016 might be pushed back until after the election because the Federal Reserve and the Obama administration would do anything and everything possible to avoid having their “recovery” fail on their watch, lest their failure should assure a Trump victory and destroy their own legacy. If that meant using Fed funds to buy up oil through banks to manipulate oil prices upward or meant the Fed would influence or coerce proxies in other countries to buy up US assets to support the stock market — whatever it might take — they would do it all … behind the scenes.
Shortly after saying that, I pointed out in early 2016 how the Federal Reserve board held two back-to-back “emergency, closed-door meetings” (as described on the Fed’s own published calendar) followed by an immediate “emergency meeting” between Fed Chair, Janet Yellen, and the president and vice president of the United States. After those meetings, the stock crash that had begun in January and somewhat recovered in February evaporated, and stocks moved continuously toward recovering all lost ground. We were never told what any of those meetings were about, but meetings between the Fed chair and the president rarely happen, and meetings including the V.P. almost never happen. That indicates some level of emergency that the vice president also needed to be fully informed on.
It has also been my stated belief all along that, if Trump did win (which I gave a better likelihood than Hillary), the Federal Reserve would capitalize on it. I have no doubt that globalists have plans for every contingency. With their recovery failing again (as we saw GDP cascade in the final quarter of 2016), the establishment would be more than happy to let it crash after the election, but most likely not until after Obama was out of office and Trump sat in the oval office.
I have said for years that the Fed’s “recovery” during the Obama administration can only live as long as artificial life support continues. That support still continues intensely through the Fed holding indefinitely the huge expansion of its balance sheet (which leverages out to an historically enormous pool of new money continuing to float the economy) and through the Fed’s continuance of extremely low interest rates. (While rising now, interest rates still remain the lowest they have been in modern history, outside of the Great Recession.)
I’ve believed that, if globalists faced a Trump victory, they would even collapse the economy on purpose, if it were not already failing, because they would love to decapitate their newly risen opposition by making people believe that the entire global economy collapsed because of Trump’s interruption to their plans. They would hope that would slam a lid on revolutionaries against globalism, teaching them once and for all that their individualism and nationalistic, anti-socialist ways bring only rapid calamity.
I think they recognize that, if a global collapse happens on Trump’s watch, many people will look desperately for a global solution from those who appeared to be having success with restoring the economy before he came into office. Many people do not see that the Fed’s recovery was only kept alive by endless and massive administrations of artificial life support. Many people also do not see or believe that the economic flaws of the US and many other nations are fatal or even important — such as the size of national debts, the vanity of fiat currencies, the dangers of financing national debts with massive infusions of such currency. They don’t believe that expanding personal debt to individual limits leads to enslavement as does national debt — enslavement to bankers. They even believe that banks and government have done the right things to reduce the risks of another economic crisis like we had from 2007 to 2009 in the Great Recession.
Therefore, it will not be hard to find a majority of the populace that will join the mainstream media and the establishment politicians in blaming Trump when the entire global economy goes down. Trump’s provocative mouth, his brazen plans, his sometimes brash execution of those plans, along with his narcissism and often clownish behavior, make him a ripe target as a grand scapegoat. (I think even most conservatives would have to admit to themselves here that, if Trump were carrying out a totally liberal agenda, they would find plentiful stock for ridicule in Trump’s showy, boastful, and brash behavior. It won’t be hard for his opponents to do the same.)
So, if the establishment doesn’t assassinate him (now a mainstream idea), they will likely make him a scapegoat to carry away their own sins. All of that places the likelihood of economic collapse sometime in 2017.