Albert Edwards on Trump’s Legacy:15% Deficits then a Deflationary Bust

link to pasutri-makassar.com

link to obatperangsangmanjur.net

“Consider that, under the Greenspan/Bernanke/Yellen Federal Reserve, the following has occurred:

Pension plans, both public and private have been ruined. Millions of future retirees and taxpayers will not have trillions of dollars they would and should otherwise have to support them in their later years.
Income inequality is at the highest its been in over 100 years
Wealth inequality is also at historical extremes
Student debt is now nearly $1.5 trillion, up ~ $1 trillion since 2007
More than a trillion dollars of interest payments on savings accounts has been forfeited — denying funds to the next generation for use in business creation, household formation, and education.
Total debt in the US and globally is up massively since the 2008 Great Recession (itself a central banking accident), and now stands at more than $233 trillion worldwide.

These are among a few of the destructive results of the Federal Reserve’s decision to lower interest rates to 0% in order to reward the big banks, well connected private equity firms, and unrestrained government borrowing.”

More here… (link to zerohedge.com)

Pray tell me why we should not call the central banksters “MONETARY TERRORISTS” for what they have wrought.

While people are sleeping now and are not able to figure it out, a day will come (may be it will take a decade or even two) when the Monetary Terrorrists will be understood for what they are and will be dealt with accordingly. I hope it is sooner than a decade or two.

I fully expect a reset in monetary system at some point in time simply because there is no other way and some one will have to bite the bullet

China just created 2.9 million Yuan in loans in January. That was 5 times the amount in December. China has repeatedly talked of reigning in, but every time they start to, they suddenly reverse course, because they can’t bear the consequences. Japan just announced they would buy up all debt and an Uber Dove is joining the BOJ. The ECB keeps extending and pretending. The U.S. economic expansion hits 9 years next month. Everybody is trying to put off the next recession.

“Edwards says the next recession will bring outright deflation, helicopter money, negative Fed Funds and negative 10 year bond yields.
Overall, Edwards’ view message closely matches mine.”

Will it be possible to do helicopter money and negative rates for the Fed?

3 reasons come to mind:

1. People could revolt (who knows it may wake up people to the fact that they are being had and may wake up this time). IMO, it may not so easy as to be a given.
2. Given that by now even the central banksters might privately acknowledge that QE, NIRP and ZIRP does not work, failure at a later date may entail repurcussions (which they have escaped repurcussions this time. In fact one central bankster has been able to portray it as Courage to Act – basically the courage to give money hand over fist to banksters, who should have been jailed)

not optimistic so much as realistic – after two years, either repatriation, the revise health premiums (via abolition of “tax the healthy to pay for the sick” obamacare, the full impact of first year capex expensing for tax purposes, the eradication of useless regulations (via “one in two out” plus the hiring of those locked out via still record unemployment (using particpation rate, not bullshit U3/U6, plus anti-dumping via current trade deals by Canada, China and others will provide a base. if the base is not quality we will, of course, have an epic fincnail and economic collapse, since it will become all too apparent that the US has no quality or ability to look after itself, let alone export in sufficient quanities to first, balance, and next run fiscal surpluses. it’s a chance – the alternative is to continue on the road to mobocracy and “do no work, pay no taxes, print money”. i am very keen on hearing an alternative. my idea would be to cut spending by sufficient to run 2-3% surpluses for the thirty years it would take to restore the federal debt to rational levels of sub-40%. since there are too many voters, voing for too many benefits and hand-outs, that just won’t happen!

It will not be a “crisis”, more like a “global financial disaster”… might as well take the word financial out and go with just … “global disaster” or maybe I am being too optimistic. As David Stockman just pointed out the financial sectors total debt and equity now accounts for 5X GDP, versus 3.5 on the eve of the financial crisis and under 2 traditionally.

Société Générale ‘s Edwards is a known bear of course. As for all that he forecasts, outcomes may be unduly influenced by psychology, notably the buoyancy of business confidence. If Trump’s infrastructure spending reinforces the temporary uplift from his tax reforms, a little extra time may be bought.

there are many components to the calculation of GDP. the usual single letters are C+G+I + (x-m). C(onsumption) is going to increase 3-4% in the next year because of tax cuts and pay rises, G is increasing GDP over the next year because, by conventional economic measurments, an increase in G(overnment) in the next year is a boost to the economy (what a crock hey, more debt = growth? NOT?) I(nvestment) will increase over the next two years because of repatriation. A real economist would delve deeper into each of C, G and I to see where that economist could aid investors in placing money. the last shoe to fall is (x-m). Ross is addressing (x-m). The trouble with (x-m) is that it is a mirror image of the fiscal deficit. So unless Ross/Trump are succesful in “fair trade” not “free trade” that will blow up as the fiscal deficit blows up. Now, by conventional (bullshit) economic measures, GDP is likely to increase in nominal terms by around 5-8% for each of the next two years. Rational markets would price the ten year at the same nominal rate. What is being missed is the second round effects of I and the targeted contraction in (x-m). some muppets call “fair trade” a “trade war”. i have news for them – we are already in a trade war and we are losing – aided and abetted by falling educational standards to snowflake levels and an opiod epidemic making american workers unemployable – thank you drug companies.

Keeping more of my hard earned income inflates my bank account.