Increased U.S. growth and stock market gains coming. The reason? Trumponomics.

[BannedForViews]

Regardless of whether trickle-down exists or not, the system as you describe it doesn't function at present. It doesn't function for several reasons:

In 2008, The Federal Reserve (the people in charge of all of the dollars you have to accumulate to pay your bills) performed a massive asset swap. They gave major banks cash in exchange for their toxic mortgage assets.

At nearly the same time, Federal Reserve also started quantitative easing, its long-term policy of purchasing US government bonds.

These two efforts should have most certainly caused inflation (causing gold prices to spike as a hedge, a position I was telling friends to get into in the early days of the 2008 crisis) but the Fed, under the guidance of the monetarists, preemptively positioned one policy as the foundation for the New Normal: they started paying interest on their reserves… two years before the crisis of 2008.

This means that, when a commercial bank takes a loan from the Federal Reserve, they have to pay nearly zero interest on that loan. This is because the Federal Reserve is paying that interest as was authorized by law in 2006.

This means that commercial banks have no reason to even lend that money out to you to help them beat a near zero rate. This means both the Federal Reserve and the commercial banks stockpile money since the motivation to involve with the public via interest rates are being handled centrally.

I actually know all of this, but that doesn't really engage with my point. People on this website and all across the world really, pretend that when a rich person makes money they do something mystical with it that doesn't involve anyone else. That they don't buy assets, hire works, invest in things and the like. Even if they spend the money frivolously, it's still going to paying wages and supporting the economy. When you talk about "tax cuts for the rich" with these people, they think that means the rich can now have their cake and eat it too.

I am very aware of quantitative easing and inflation (or seeming lack thereof). That is a different problem, and one that is only being prolonged, not prevented. But I'm sure that will be blamed on the wealthy also when it finally bites us all in the ass.

[Nadiru]

I actually know all of this, but that doesn't really engage with my point. People on this website and all across the world really, pretend that when a rich person makes money they do something mystical with it that doesn't involve anyone else. That they don't buy assets, hire works, invest in things and the like. Even if they spend the money frivolously, it's still going to paying wages and supporting the economy. When you talk about "tax cuts for the rich" with these people, they think that means the rich can now have their cake and eat it too.

I am very aware of quantitative easing and inflation (or seeming lack thereof). That is a different problem, and one that is only being prolonged, not prevented. But I'm sure that will be blamed on the wealthy also when it finally bites us all in the ass.

Without capital controls on the US economy, that money accrued by the rich is free to seek better returns outside of American borders. And it generally does. You can make the argument that it's better because the money is going to vastly poorer people elsewhere on the planet, but it does mean that the rich is essentially taking money from the US to give to the global poor, in an attempt to further enrich themselves.

[Bullettime]

Without capital controls on the US economy, that money accrued by the rich is free to seek better returns outside of American borders. And it generally does. You can make the argument that it's better because the money is going to vastly poorer people elsewhere on the planet, but it does mean that the rich is essentially taking money from the US to give to the global poor, in an attempt to further enrich themselves.

Yeah investments, outsourcing, and personal accounts end up draining a lot of the money whereas like 99% of the money moving in the lower-middle class flows and ends up right back into the economy.

[Adp]

Yes, the stock market prospects should look pretty good atm considering the signals to deregulate businesses/banks. They will be able to make more profit thereby increasing the value of their stock to shareholders. However, we know what happens when we cut taxes and increase spending. I wonder what all those republicans who blocked the debt ceiling increase as a political bargaining chip will do when they are forced to vote it through this time and the next 5 times.

[Krille]

Of course this has nothing to do with the banks feeling they'll be free to fuck up the economy again Trump will ease regulation and in short term increase economic growth, but it's the longterm effects that i'd worry about, and how you can never trust the banks.

[Wells]

Of course this has nothing to do with the banks feeling they'll be free to fuck up the economy again Trump will ease regulation and in short term increase economic growth, but it's the longterm effects that i'd worry about, and how you can never trust the banks.

Turns out that the ~9% of the US economy that the finance sector takes up loves it when the new president hires a bunch of Goldman Sachs guys and promises to repeal all the regulation getting in the way of those sweet sweet lending profits.

[Krille]

Turns out that the ~9% of the US economy that the finance sector takes up loves it when the new president hires a bunch of Goldman Sachs guys and promises to repeal all the regulation getting in the way of those sweet sweet lending profits.

Huge surprise this

[Wells]

Huge surprise this

The slowly dawning realization that they've been had has been just what I needed though.



and

https://twitter.com/WalshFreedom/sta...38449300959232

[Krille]

The slowly dawning realization that they've been had has been just what I needed though.

Yea forget all the talk about wars and climate change, his biggest impact will be fucking up the US economy even more.

[alexw]

Regardless of whether trickle-down exists or not, the system as you describe it doesn't function at present. It doesn't function for several reasons:

In 2008, The Federal Reserve (the people in charge of all of the dollars you have to accumulate to pay your bills) performed a massive asset swap. They gave major banks cash in exchange for their toxic mortgage assets.

At nearly the same time, Federal Reserve also started quantitative easing, its long-term policy of purchasing US government bonds.

These two efforts should have most certainly caused inflation (causing gold prices to spike as a hedge, a position I was telling friends to get into in the early days of the 2008 crisis) but the Fed, under the guidance of the monetarists, preemptively positioned one policy as the foundation for the New Normal: they started paying interest on their reserves… two years before the crisis of 2008.

This means that, when a commercial bank takes a loan from the Federal Reserve, they have to pay nearly zero interest on that loan. This is because the Federal Reserve is paying that interest as was authorized by law in 2006.

This means that commercial banks have no reason to even lend that money out to you to help them beat a near zero rate. This means both the Federal Reserve and the commercial banks stockpile money since the motivation to involve with the public via interest rates are being handled centrally.

That lending to the non-governmental sector would not occur irrespective of QE. Global interest rates are at record lows and have been trending slowly downwards for decades. This indicates there isn't the necessary demand for new capital and that its supply already massively outstrips demand. Just like supply and demand pushes prices up/down the same holds true for new capital, and the way that manifests is via interest rates.

None of this should be a surprise however given the skyrocketing inequality we are seeing across the globe. It both depresses demand for goods and services as a result of poor mass purchasing power, and pushes up the amount of money in the hands of the wealthy looking for profitable investment opportunities.

As the FED chairmen Eccles put it the last time we faced this same crisis in the 1930's -

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

[Krille]

That lending to the non-governmental sector would not occur irrespective of QE. Global interest rates are at record lows and have been trending slowly downwards for decades. This indicates there isn't the necessary demand for new capital and that its supply already massively outstrips demand. Just like supply and demand pushes prices up/down the same holds true for new capital, and the way that manifests is via interest rates.

None of this should be a surprise however given the skyrocketing inequality we are seeing across the globe. It both depresses demand for goods and services as a result of poor mass purchasing power, and pushes up the amount of money in the hands of the wealthy looking for profitable investment opportunities.

As the FED chairmen Eccles put it the last time we faced this same crisis in the 1930's -

I personally would like to see a type of basic income that tries to stimulate your want/need to work and actually do something. But it's going to be needed in a not so distant future. People who think they talk for big corporations when they say the rich don't want to pay for the lower class are missing some critical points as you mention, without any buyers there's not going to be any economic growth either. And most of us know that the ultra rich would rather sit on their wealth than spend it so it's not going to come from them. Some kind of distribution is required if we want to keep our economy growing, simple as that.

[Wells]

Yea forget all the talk about wars and climate change, his biggest impact will be fucking up the US economy even more.

There is however a less than 0 chance the GOP doesn't ramp up in Syria.

[Nadiru]

That lending to the non-governmental sector would not occur irrespective of QE. Global interest rates are at record lows and have been trending slowly downwards for decades. This indicates there isn't the necessary demand for new capital and that its supply already massively outstrips demand. Just like supply and demand pushes prices up/down the same holds true for new capital, and the way that manifests is via interest rates.

None of this should be a surprise however given the skyrocketing inequality we are seeing across the globe. It both depresses demand for goods and services as a result of poor mass purchasing power, and pushes up the amount of money in the hands of the wealthy looking for profitable investment opportunities.

As the FED chairmen Eccles put it the last time we faced this same crisis in the 1930's -

The global supply glut isn't fixable within US boundaries. The only way to resolve the balance sheet dilemmas of the world is for the rest of the world - chiefly India, China, Germany, and Japan - to begin to consume much more than they are presently. Because of path-dependency, the only practical way to do this is to force that consumption onto those countries through trade intervention.

[Krille]

There is however a less than 0 chance the GOP doesn't ramp up in Syria.

I'd expect as much. But Trump being a businessman at heart i fear more for how he thinks he can run a country just as his company.

[Milchshake]

There is however a less than 0 chance the GOP doesn't ramp up in Syria.

Dont forget, Iran is on the NeoCons wishlist. Still room for them in the cabinet.

[Wells]

Dont forget, Iran is on the NeoCons wishlist. Still room for them in the cabinet.

The amount of deep state pushback if Cotton n Co try to escalate that situation will be interesting.

[Milchshake]

The amount of deep state pushback if Cotton n Co try to escalate that situation will be interesting.

Well if the precedent of deep State Push back is Colin Powell at the UN saying Saddam has nukes. Its doent look that great.

[Wells]

Well if the precedent of deep State Push back is Colin Powell at the UN saying Saddam has nukes. Its doent look that great.

Cabinet members, by definition, wouldn't be deep state. There was deep state pushback against that speech though.

[Skroe]

There is however a less than 0 chance the GOP doesn't ramp up in Syria.

Objectively, it would be the single dumbest thing that we will have done this millennium. It'll make the Iraq War look like a stroke of genius.

Through some nasty realpolitik, through luck, through neglect, the Obama Administration created a nasty problem for Russia in Syria. Consider what Russia had in Syria in 2009, and contrast it to what they have today. The difference? Far less, at far higher a cost, and putting humpty dumpty back together again will take resources a declining country like Russia just does not have. This is why I've said for years now, if America declares victory and goes home at any point, it will have effectively "won" Syria in that regard, because Russia will have to either abandon Syria, or invest in Syria indefinetly, which will tie them down.

Enter the crazies' obsession with ISIS, a disorganized army of 20,000 thugs on the other side of the planet, in the middle of the desert. To wage a grand crusade against those morons, our own morons would trade away the crown jewels of the post World War II security order to strike an alliance with Russia to do it.

These people are so fucking dumb... like legitimately dumb... they would position the United States to come to Russia's rescue in a situation we and our Gulf Arab allies worked hard to force Russia into in the first place.

The good news is, Trump's "plan" in Syria is almost certainly going to be just the existing plan minus Susan Rice and Barack Obama's absurdly restrictive Rules of Engagement (the one that saw ISIS foot soldiers being told to flee before the bombs came). But not one thing more than that. The Deep State from the security perspective is hyper focused on Modernization, China, Russia, Cyber, Space and Terrorism, in that order. Legitimately nobody wants to start another trillion dollar war at this point - not when we have to drop about a trillion to modernize our way out of the aging systems used in the last two trillion dollar wars.

If Trump ordered a ground campaign, he'd have to find some new generals to do it most likely. This is why I've kind of rolled my eyes at General Mattis being put forward as a secretary of Defense name. The guy would do a fine job.... ten years ago or ten years from now. What the Pentagon needs right now is what it has in Ash Carter (and his deputy, Robert Work) - Procurement / Contract guys. The Defense Establishment doesn't need a "fighting man" at the helm. It needs guys who can fix the mess that was 1996-2010's modernization black hole. Robert Gates started the processes. Worthless Chuck Hagel did nothing. But Ash Carter has been a goddamn hero on this front.

If Trump had any sense, he would ask Carter to stick around another 4 years, just as Obama asked Gates. The work Carter is doing is too important, and defense-minded people should be deeply concerned that it'll stay the course after a leadership transition. The good news is, Congress is mostly on the same page, but Ash Carter is the kind of consummate professional public servant that we desperately need more of. Which is to say, he's entirely out of place with our WWE Superstar President-Elect administration.

[Wells]

Objectively, it would be the single dumbest thing that we will have done this millennium. It'll make the Iraq War look like a stroke of genius.