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Written and produced by SF Team: J.Hawk, Daniel Deiss, Edwin Watson; Voiceover by Coby B
By way of introduction, it should be noted that the US economy is showing many signs of a classical bubble, starting with the incredibly over-valued US stock market. Only slightly more than a decade ago, at the peak of the real estate bubble, the Dow Jones Industrial Average (DJIA) barely managed to clear the 14,000 mark, before staging a spectacular plunge almost to 7,000. Since then DJIA nearly quadrupled in value, as of mid-July 2019 hovering at above the 27,000 mark. Since the US economy as a whole has not quadrupled during the same time interval, there is a clear dissociation between “Wall Street” and “Main Street” that will at some point inevitably lead to serious economic and political problems in the United States, to the point of considerably remaking its political landscape. The proverbial $64,000 question, however, is when will the US financial house of cards come tumbling down the next time, and what will be the triggering event?
“Pay No Attention to the Man Behind the Curtain”
Politics is a factor in the management of the US financial system. The US Federal Reserve, though it is rarely perceived as having its finger on the scale of US presidential elections, played a role during the 2000 and 2008 presidential elections and its monetary policy decisions do impact day-to-day presidential approval ratings indirectly, through their influence on DJIA fluctuations. The Fed contributed to the financial bubble bursting by raising its lending rates on the eve of the election, and while its actions may be justified in terms of preventing an even bigger bubble, the timing of the raising of interest rates was such that it hurt the candidates of the incumbent parties (Al Gore in 2000, John McCain in 2008), thus facilitating a change of flag, as it were, in the White House. The 2008 election was particularly indicative of the power wielded by the Fed. It is all-but-forgotten that Obama-Biden’s nominating convention was a dud, while that of McCain-Palin was a success that gave the GOP team such a bounce in the polls that they were leading their Democratic opponents in the polls and provoking panic in Obama’s camp. Had Lehman Brothers not been allowed to fail, thus triggering a global financial meltdown, the outcome of the election may well have been very different. However, on the eve of the 2016 election the Fed was very gun-shy when it came to raising interest rates—had it been as aggressive as it was in 2008, its monetary policy would have once again caused the grossly overvalued US stock market to crater, thus sending Trump into the White House with a far broader margin of victory than what he actually enjoyed.
Four More Years?
Therefore the question should be framed in terms of whether Trump is long for this political world. Sturm und Drang emanating from the establishment media notwithstanding, it does appear as if Trump succeeded in appeasing enough of Washington’s power players, not the least of them being the “intelligence community”, to give himself a solid shot at a second term. House Speaker Nancy Pelosi intimated as much when she announced, to the annoyance of a sizable portion of her caucus, that impeachment was off the table. Robert Mueller’s failure to deliver impeachable goods on Trump also suggests that the “intelligence community” no longer views its ostensible Commander-in-Chief as a threat to its institutional interests. The de-facto purge of Trump’s foreign policy apparatus followed by the installation of neocons such as Mike Pompeo at State, John Bolton at the NSC, and the reliable military-industrial complex lobbyist and functionary Mike Esper at the DOD, was probably enough to ensure smooth feathers ruffled by Hillary Clinton’s unexpected defeat.
Toward a Managed Economy
If the preference is, as it appears to be, to not sabotage Trump’s re-election bid by triggering an economic crisis, one should not expect a major crisis in the US economy within the next two years, or until the outcome of the 2020 election is decided. Observing the ups and downs of the DJIA since Trump took office, one is left with the impression that the US financial institutions are acting as if there existed an invisible “safety net” to catch them in the event of the onset of a “bear market” or even a proverbial “black swan” event that could trigger a US-wide or even global financial meltdown. Whenever one sees the DJIA drop by several hundred points in a single day, or even a thousand points within a few days, one can rest assured the drop will be followed by a spectacular rise in the following days. In a remarkable reversal of course, considering that the US economy is officially still “booming”, the Federal Reserve itself no longer seems willing to be interested in raising rates.
It does not mean that the US economy is entirely out of the woods. Certain sectors of it, for example retail, oil fracking, or even sub-prime auto loans, may suffer waves of bankruptcies. Those enterprises which are vulnerable to Chinese counter-tariffs, starting with the US agri-businesses, will also fare poorly. But if the situation gets too severe, one can expect the US Congress to vote in favor of subsidies, and the financial sector can count on the Federal Reserve to keep it afloat, so that the mounting bankruptcies are extremely unlikely to affect the “too big too fail” banks, not anymore than they did following the 2008 housing crisis.
The financial sector, in particular, is being treated as a de-facto US strategic asset. On the one hand, economic warfare being waged by the US Department of Treasury through its ever-expanding list of sanctioned entities is taking bread out of US banks’ mouths. This happens not only through the loss of actual business with the sanctioned entities but also due to the slowly progressing process of “de-dollarization” which in the long term could become an existential threat to the US status as the dominant center of global finance. But the US banks have met this situation with equanimity, indicating they are some form of compensation for their troubles.
The one threat to the stability of US economy that the US government or Fed might not be able to deal with are the consequences of the US trade war against the rest of the world. Should it trigger a financial crisis elsewhere, for example in the EU or China, then the US would find itself in a severe recession once again. However, both EU and China are developing their own capacity for dealing with US-induced economic shocks, in that respect following Russia’s example.
Disaster Capitalism on the Horizon?
This idyllic stagnation in the US is unlikely to continue forever. There are still a number of issues the US oligarchy needs tackled, first and foremost of them being the Medicare and Social Security entitlement programs. With even frontrunner Democrats like Joe Biden proclaiming, on the presidential campaign trail, no less, that “Medicare is gone”, one should expect “entitlement reform” to be on the agenda of a future administration or perhaps even of Trump’s second term. To achieve that objective, a little controlled chaos following a financial meltdown and a recession to set Americans against one another along racial and generational lines, could be very useful. But it does not appear likely such a scenario will be enacted before 2021 at the earliest.
You can’t have a decent assessment on the economic scene here if it’s divined by a loser economics commie.
Perhaps you could enlighten us as to what they got wrong? Why are suicide rates rising every year if things are so great?
Guys like you always use the excuse that after we bomb or loot some country into desperation, that their refugees come here (as if that’s some sort of endorsement). Most of the ones I’ve met wind up regretting it.
Show us the right assessment, please.
Hey mister Neil Barron…Welcome…Welcome…you happen yo be on my Hasbarat-Shit-List…you Lucky Bastard…Your prize? Some Free Publicity here on SF…noice ain’t it?
BEWARE EXTREME HASBARA-TROLL ACTIVITY
ACTIVE PARASITES: Toronto Tonto, Critical Thinker 911, Jens Holm, Occupying Pig Meat, Jacob “the Nose” Wohl, Simon Bernstein, Neil Barron, DutchNational, Free man
Roger Smellyman, Frank Behrenstein, Baron Von GoatBanger, Joe Dirt, Smaug, Mountains, Lord of the Wankers, Just Watching, Hamster, retiredSOFguy, Terry Penis, Vidura, Total Pinocchio, Derapage, Fatime Oomayadin, King Tudor777, Velociraptor, Ajdin Aksoy, Superfly, Serious, أبو ياسر, NOD
Beware! These Folks get paid in $hekels to manipulate & speak with Crooked Tongue…
The Gulag Archipelago https://www.google.nl/amp/s/amp.theguardian.com/world/2003/jan/25/russia.books
Copy this and use it every time you run into one of those PARASITIC HASBARAT-TROLLS:
Taken from UNZ Review, article, “Use of TERMITE by Louis Farrakahn was exactly right” – “Arthur Koestler, (a person of the Jewish Faith –My, Freespirit emphasis ) is quoting from Maurice Maeterlinck’s Life of the Termites in order to establish in his readers’ minds a salient political point. Not only does Koestler find the termite to be the most accurate metaphor for society’s decay, but his other book, The Thirteenth Tribe, debunks the claim by the white Caucasian Ashkenazi Jews that they are Jews at all! His careful, scholarly, and historically accurate 1976 study found that the white people we think of as Jews—the Netanyahus, the Jonathan Greenblatts, the Alan Dershowitzes and the rest of them—are imposters with no genetic connection to the holy land or holy people of the Bible; they are not even Semites! Koestler proves that their Caucasian tribal ancestors converted to Judaism sometime in the 8th century. So the charge of “anti-Semitism” constantly leveled at Blacks and their leaders has no actual meaning at all.” https://www.unz.com/article…
“Pay No Attention to the Man Behind the Curtain”
WTF….How can I not pay attention to the “man” behind the Curtain???!!! The Curtain Came Down & He is standin’ there Buttnaked….damn it’s an Ugly sight…can someone put that Curtain back up please?
Anyways, what happened to USA/Mexico wall? And his promises. To be honest, I don’t think that much will change in terms of politics even with democrat-we all know that too good. America is in various Wars since Bush presidency, and Obama turned to be a puppet as dumb as heck.
The largest and most innovative economy in the world, which also happens to be the fastest growing economy in the western world, is “in its final death throes”? LOL….where do they teach fools like you?
Probably that’s why Trump crashed the World economy with Trade Wars so now EU is in negative interest territory and US is 2% now Trump has got somewhere to go for 2020, is that a bad thing ? Biden would be a Democrat worse party of war than Trump and the EU would consider Biden a rational development on Trump because he would end Trade Wars, that pushes Russia and China together supporting Iran and Turkey and Trump is by far the better choice.
Under Trump, U.S. GDP will rise from $18.62 trillion in 2016, to $21.25 trillion (consensus est.) in 2019. That is an increase in GDP of $2.63 trillion. To put this into perspective, the increase in U.S. GDP in 3 years of Trump, is more than 1 1/2 times the ENTIRE GDP OF RUSSIA ($1.63trillion)!! Amazing!!
And the increase of Debt?
It’s barely moved as a function of Debt/GDP, which, as any economist knows, is how you have to look at it.
The fact is that increase in debt of USA was higher thamn increase in GDP. So basicaly you borrowed more than you earned and therefore that period of US econonmy is in negative numbers……. a loss
hilarious stupidity—apparently ur r ignorant of ppp; USA has 22 trillion USD debt, Russia nearly none…of course all the fake wealth goes to 3 individuals in the USA that account for more than 50% of all wealth held—and of course hidden in off shore schemes, banks and holding companies
U.S. could borrow, and service, another $20 trillion without problems if it had to. By contrast, no one would lend Russia even $1 trillion unless it pledged hard assets (eg. oil reserves) to cover the debt.
utter stupidity—German investments in Russia increased by 59% in 2018 and is increasing more in 2019…obviously u r entirely ignorant about orthodox economics…the US empire will collapse in the next 10 years—as predicted by Jameson, Orlov and Galtung
Nothing will change even if democrats wins this time, politics will stay the same. Trum is just barking dog, at least we know him and his funny politics. Anyways what happened to the Mexico wall???
article says nothing and takes 1200+ words to do it.
America is a classic example of the danger of allowing Jews into your society and electing their Zionist Israel firster sock puppets. America and the planet need extinction grade dejudification. So that the planet is Jew free.
The lying vermin Jew msm is covering up the psycho shooter drugs involved in almost all mass shootings. Which were rare before these drugs were legalized. And their Zionist Israel firster anti American swamp traitors have used these preventable mass shootings for 30 years to take away our rights and freedoms. Rather than outlawing and properly regulating these drugs to stop the mass shootings so that they don’t pose a threat to society.
The El Paso shooter was on them. And the Ohio shooter probably was also:
“Patrick Crusius was a very disturbed white kid loaded up to the eyeballs on antidepressant medication, some of which have a host of dangerous side effects, including anxiety, aggression, and suicidal tendencies.”
– American ‘wild, wild West’ needs taming, but politicizing cold-blooded murder is not the way –
“James Holmes … killed 12 people and injured 70 in a Colorado cinema in 2012, after starting an antidepressant 17 weeks prior. Professor David Healy interviewed Holmes prior to his 2015 trial and concluded, “I believe if he hadn’t taken the Sertraline [antidepressant], he wouldn’t have murdered anyone.”
Professor Healy estimates that 90 percent of school shootings taking place over more than a decade were linked to antidepressants.”
– A PRESCRIPTION FOR MURDER –