In Part 2 we noted that the key main street economic metrics reflect no MAGA magic whatsoever. Since the election, inflation-adjusted paychecks have gone nowhere and almost anything else you can name—-business investment, real retail sales, productivity, employment and even real GDP—-continue to slog along in the tepid “recovery” channel that has prevailed since 2010.
Notwithstanding the Donald’s tweets, that’s happening because the foundation of the US economy is rotten to the core. And that lamentable condition is the product of three decades of central bank-driven Bubble Finance—that is, bad money, not bad trade deals, free markets or nefarious foreigners.
The real culprit behind the economic distress in Flyover America that brought the Donald to the Oval Office, therefore, is a rogue central banking regime that has functioned to:
Needless to say, the Donald’s fondness for protectionism, “low interest” and epic fiscal profligacy has absolutely nothing to offer: It will be making the symptoms far worse and has left the Keynesian money-printers’ posse unchallenged and fully empowered in the Eccles Building.
And that will prove to be a fatal mistake—-the equivalent of Trump signing his own political death warrant.
In the first place, the 35% eruption of the S&P 500 between the election and the January 26th high wasn’t remotely real, warranted or sustainable. Wall Street’s already egregiously inflated stock averages, in fact, were inexorably doomed to tumble from the day the Donald took the oath of office.
What the Trump bubblet amounted to was the financial equivalent of rigor mortis. That is, the last involuntary dip-buying spasms of gamblers and robo-machines which had gotten so intoxicated by years of the Fed’s free money and price-keeping operations that they can’t see the brick walls straight ahead.
We are referring, of course, to the monetary monkey-hammering that’s headed straight for the canyons of Wall Street.
