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Pretending Continues – Fed Chair Powell Notes Banking Crisis Will Likely Restrict Credit and Borrowing on Main Street…

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At a certain point in the economics of the great pretending cycle, one must wonder what circles they live in.

Fed Chair Jerome Powell announced another quarter-point interest rate hike and simultaneously noted the banking crisis will likely lead to tighter credit and borrowing for businesses on Main Street…. thereby further reducing the U.S. economic output.  Yet here we are again, and not a single economic or financial pundit is even talking about the origin of the inflation the Fed action is pretending to address, the spike in energy prices.

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

At the core of the Biden policy issue that creates inflation, is the energy policy that has driven oil, gas, home heating, electricity and manufacturing/farming costs through the roof.  The blocking of energy resource development/production is the top issue leading to massive increases in consumer prices overall.  The Biden energy policy is entirely ignored by a federal reserve attempting to shrink inflation.

Follow the bouncing ball of consequence.

Biden restricts energy development [Main St Suffers].  Prices skyrocket [Main St Suffers]. The fed raises interest rates in an effort to reduce the economic activity to meet the lowered production of energy resource development [Main St Suffers].  The result of the interest rate hike creates liquidity issues for banks holding treasury securities [Main St Suffers].  The banks then reduce credit lines, reduce lending and tighten borrowing to match their lowered liquidity [Main St Suffers].

The Fed then notes further increases in rates may pause as they await the outcome of restricted banking credit and lending from the rate hikes previously installed.  No where in any of this is anyone talking about the nucleus of the issue, the stupid energy policy.  The great pretending continues in the West, while smiling panda lunches with Vladimir Putin.

[Transcript] – “At today’s meeting, the committee raised the target range for the federal-funds rate by a quarter percentage point, bringing the target range to 4.75 to 5 percent, and we are continuing the process of significantly reducing our securities holdings. Since our previous FOMC meeting, economic indicators have generally come in stronger than expected, demonstrating greater momentum in economic activity and inflation.

We believe, however, that events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes. It is too soon to determine the extent of these effects, and therefore too soon to tell how monetary policy should respond.

As a result, we no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation; instead, we now anticipate that some additional policy firming may be appropriate. We will closely monitor incoming data and carefully assess the actual and expected effects of tighter credit conditions on economic activity, the labor market, and inflation, and our policy decisions will reflect that assessment. (read more)

We are in an abusive relationship with our government.

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The Golden Arrow – President Trump Announces Economic Agenda 47 Which Includes “Universal Baseline Tariffs”

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The Golden Arrow – President Trump Announces Economic Agenda 47 Which Includes “Universal Baseline Tariffs”

This is it. This is pure MAGA. President Trump is announcing the big one… “Economic Agenda 47“

This is the economic policy blade to drive a stake through the vampire heart of corporatism, globalism and the exploitation of the U.S. economy by multinational corporate interests. This “universal baseline tariff” approach, is the policy that slays the dragons of the World Economic Forum, destroys the Beijing dragon and simultaneously ends the EU Marshal Plan advantage. This is a big deal.

President Trump makes the economic policy announcement today, and it is an incredible structure of trade and economic proposals that would be resoundingly effective at restoring every financial mechanism within the United States as a sovereign country.  The proposal is economic nationalism in policy form.

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

First, here’s the announcement {Direct Rumble Link} – WATCH:

[Transcript] – “Joe Biden claims to support American manufacturing—but in reality, he is pushing the same pro-China globalist agenda that ripped the industrial heart out of our country. It ripped us apart. Biden and the globalists support RAISING taxes on American production. They support MORE crippling regulations killing American jobs. They support skyrocketing domestic energy costs. And they support massive anti-American multinational agreements that send our wealth and factories overseas.

Very simply, the Biden agenda taxes AMERICA to build up CHINA.

China is the big beneficiary. We cannot let that happen. And just a couple of years ago, it wasn’t happening. China paid to the United States hundreds of billions of dollars and no other president got ten cents. Legitimately, ten cents from China.

My agenda will tax CHINA to build up AMERICA.

The heart of my vision is a sweeping pro-American overhaul of our tax and trade policy to move from the Biden system that punishes domestic producers and rewards outsourcers, to a system that REWARDS domestic production and taxes FOREIGN companies and those who export American Jobs. They will be rewarded and rewarded greatly. And our country will benefit.

To achieve this goal, we will phase in a system of universal, baseline tariffs on most foreign products. On top of this, higher tariffs will increase incrementally depending on how much individual foreign countries devalue their currency. They devalue their currency to take advantage of the United States, and they subsidize their industries, or otherwise engage in trade cheating and abuse. And they do it now like never before, and we had it largely stopped and it was going to be stopped completely within less than a year.

As tariffs on foreign producers go up, taxes on American producers will go down and go down very substantially. And that means a lot of jobs coming in.

Not only will this system end our gaping trade deficits—and they are massive right now—and bring back millions of American jobs—it will also bring trillions and trillions of dollars pouring into the U.S. Treasury from foreign countries and allow us to invest that money in American workers, American families, and American communities.

This plan will be the linchpin of a new Strategic National Manufacturing Initiative, that builds on my historic success in ending NAFTA, which was a tremendous thing, a tremendous achievement, nobody thought it could be done, and we did USMCA—US-Mexico-Canada, and it was an incredible thing. But we’re also going to end other unfair trade deals, and we’ll end them quickly.

In addition, as a matter of both economic and national security, I will implement a bold series of reforms to completely eliminate dependence on China in all critical areas.

We will revoke China’s Most Favored Nation trade status, and adopt a 4-year plan to phase out all Chinese imports of essential goods—everything from electronics to steel to pharmaceuticals. This will include strong protections to ensure China cannot circumvent restrictions by passing goods through conduit countries—countries that don’t make a product, but all of a sudden they’re making a lot of the product, it comes right through China, right out of China, and right into our country.

We will also adopt new rules to stop U.S. companies from pouring investments into China, and to stop China from buying up America, allowing all of those investments that clearly serve American interests. We’re not going to allow bad things to happen to our country anymore. And we will eliminate federal contracts for any company that outsources to China.

Biden will never get the job done. He is weak on China because the corrupt Biden family has received millions and millions of dollars from entities tied to the Chinese Communist Party. Everybody knows that. They try and hide it, and the Fake News doesn’t want to talk about it.

Biden’s pro-China economic program puts America LAST, and it’s killing our country—my cutting-edge trade agenda will revitalize our economy by once again putting America FIRST.

And by the way, we’ll get along very well with China. And you know what the reason is? They’ll respect us again, like they did just two years ago.

We will quickly become a manufacturing powerhouse like the world has never seen before.

Thank you very much.”

[Transcript Link]

~ POLICY ~

♦UNIVERSAL BASELINE TARIFFS: President Trump has announced a plan to replace the Biden system of punishing domestic producers and rewarding outsourcers with a new system that rewards domestic production while taxing foreign companies.

Rather than raising taxes on American producers, President Trump will impose tariffs on FOREIGN producers through a system of universal baseline tariffs on most imported goods.

Higher tariffs will increase incrementally if other countries manipulate their currency or otherwise engage in unfair trading practices.

As tariffs on foreign countries go up, taxes on American workers, families, and businesses can come down.

The Biden administration has proposed nearly $2 trillion in tax increases on American citizens and levied draconian tax hikes on Americans’ household energy, 401ks, and pension plans.

The Biden administration’s globalist policies sell out American citizens and result in a windfall for foreign countries.

In 2022, the United States trade deficit reached $948.1 billion, the largest on record, and the agricultural trade deficit exceeded $2 billion.

President Trump’s trade policy is firmly rooted in American history. America used to impose tariffs on over 95% of all imports, and for decades the federal government took in over 80% of its revenue by taxing foreign producers through tariffs—not by taxing American workers and businesses.

♦ENDING RELIANCE ON CHINA: President Trump’s America First trade policy will completely eliminate U.S. dependence on China–the primary beneficiary of Democrats’ globalist agenda.

In addition to universal baseline tariffs on most foreign goods, President Trump’s plan will reclaim our economic independence from China. President Trump will revoke China’s Most Favored Nation trade status and adopt a 4-year plan to phase out all Chinese imports of essential goods—everything from electronics to steel to pharmaceuticals. This will include strong protections to ensure China cannot circumvent restrictions by passing goods through conduit countries.

President Trump will establish new rules to stop U.S. companies from investing in China and stop China from buying up America, allowing only those investments that serve American interests.

President Trump will ban federal contracts for any company that outsources to China.

Under Biden and the Democrats, American wealth and jobs are being exported to China.

The U.S. trade deficit with China has risen almost 10% under Biden to $382.9 billion last year alone.

♦A BETTER DEAL FOR AMERICAN WORKERS, FAMILIES, AND COMMUNITIES: President Trump’s plans will bring back millions of American jobs and generate trillions of dollars of new wealth to strengthen American society.

President Trump’s tariff plans will be the linchpin of a new Strategic National Manufacturing Initiative that will rebalance the global trading system and dramatically strengthen America.

Raising tariffs on foreign producers while lowering taxes for domestic producers will help keep jobs and wealth in the United States.

Higher tariffs create millions of new jobs, increase real household income, boost GDP, increase domestic manufacturing output, and generate hundreds of billions of dollars in new government revenue.

President Trump’s universal baseline tariffs will restore a level playing field for American businesses worldwide.

U.S. exports have historically faced higher tariffs from foreign countries than nearly all of America’s trade competitors.

President Trump will build on his historic success in abolishing NAFTA, which Joe Biden voted for, after which 60,000 factories closed and 4.5 million manufacturing jobs were lost. President Trump replaced NAFTA with the USMCA, a historic breakthrough in leveling the playing field for American workers, famers, and manufacturers.

Fortunately, we do not have to guess if President Trump is correct. We have his actual economic policy results to look at and see how the expansion of the economy was creating the type of growth that would sustain Social Security and Medicare.  This was/is MAGAnomics at work.

We know it works, because we have the results to cite.

It was the Fourth Quarter of 2019…..

Right before the pandemic would hit a few months later…. Despite two years of doomsayer predictions from Wall Street’s professional punditry, all of them saying Trump’s 2017 steel and aluminum tariffs on China, Canada and the EU would create massive inflation, it just wasn’t happening!

Overall year-over-year inflation was hovering around 1.7 percent [Table-A BLS]; yup, that was our inflation rate.  The rate in the latter half of 2019 was firmed up with less month-over-month fluctuation, and the rate basically remained consistent.   [See Below]  The U.S. economy was on a smooth glide path, strong, stable and Main Street was growing with MAGAnomics at work.

A couple of important points.  First, unleashing the energy sector to drive down overall costs to consumers and industry outputs was a key part of President Trump’s America-First MAGAnomic initiative.  Lower energy prices help the worker economy, middle class and average American more than any other sector.

Which brings us to the second important point.  Notice how food prices had very low year-over-year inflation, 0.5 percent.  That is a combination of two key issues: low energy costs, and the fracturing of Big Ag hold on the farm production and the export dynamic:

(BLS) […] The index for food at home declined for the third month in a row, falling 0.2 percent. The index for meats, poultry, fish, and eggs decreased 0.7 percent in August as the index for eggs fell 2.6 percent. The index for fruits and vegetables, which rose in July, fell 0.5 percent in August; the index for fresh fruits declined 1.4 percent, but the index for fresh vegetables rose 0.4 percent. The index for cereals and bakery products fell 0.3 percent in August after rising 0.3 percent in July. (link)

For the previous twenty years food prices had been increasingly controlled by Big Ag, and not by normal supply and demand.   The commodity market became a ‘controlled market’. U.S. food outputs (farm production) was controlled and exported to keep the U.S. consumer paying optimal prices.

President Trump’s trade reset was disrupting this process.  As farm products were less exported the cost of the food in our supermarket became reconnected to a ‘more normal’ supply and demand cycle.  Food prices dropped and our pantry costs were lowered.

The Commerce Dept. then announced that retail sales climbed by 0.4 percent in August 2019, twice as high as the 0.2 percent analysts had predicted. The result highlighted retail sales strength of more than 4 percent year-over-year.   These excellent results came on the heels of blowout data in July, when households boosted purchases of cars and clothing.

The better-than-expected number stemmed largely from a 1.8 percent jump in spending vehicles. Online sales, meanwhile, also continued to climb, rising 1.6 percent. That’s similar to July 2019, when Amazon held its two-day, blowout Prime Day sale. (link)

Despite the efforts to remove and impeach President Trump, it did not look like middle-class America was overly concerned about the noise coming from the pundits.   Likely that’s because blue-collar wages were higher, Main Street inflation was lower, and overall consumer confidence was strong.  Yes, MAGAnomics was working.

Additionally, remember all those MSM hours and newspaper column inches where the professional financial pundits were claiming Trump’s tariffs were going to cause massive increases in prices of consumer goods?

Well, exactly the opposite happened [BLS report] Import prices were continuing to drop:

[Table 1 – BLS report link]

This was a really interesting dynamic that no-one in the professional punditry would dare explain.

Donald Trump’s tariffs were targeted to specific sectors of imported products.  [Steel, Aluminum, and a host of smaller sectors etc.]  However, when the EU and China respond by devaluing their currency, that approach hit all products imported, not just the tariff goods.

Because the EU and China were driving up the value of the dollar, everything we were importing became cheaper.   Not just imports from Europe and China, but actually imports from everywhere.   All imports were entering the U.S. at substantially lower prices.

This meant when we imported products, we were also importing deflation.

This price result is exactly the opposite of what the economic experts and Wall Street pundits predicted back in 2017 and 2018 when they were pushing the rapid price increase narrative.

Because all the export dependent economies were reacting with such urgency to retain their access to the U.S. market, aggregate import prices were actually lower than they were when the Trump tariffs began:

[…]  Prices for imports from China edged down 0.1 percent in August following decreases of 0.2 percent in both July and June. Import prices from China have not advanced on a monthly basis since ticking up 0.1 percent in May 2018. The price index for imports from China fell 1.6 percent for the year ended in August.

[…]  Import prices from the European Union fell 0.2 percent in August and 0.3 percent over the past 12 months.

[Page #4 – BLS Report, pdf] – BLS press release.

So yes, we know President Trump can save Social Security and Medicare by expanding the economy with his America First economic policy.  We do not need to guess if it is possible or listen to pundits theorize about his approach being some random ‘catch phrase’ disconnected from reality.  Yes folks, we have the receipts.

This was MAGAnomics at work, and this is entirely what created the middle-class MAGA coalition.  No other Republican candidate has this economic policy in their outlook because all other candidates are purchased by the Wall Street multinationals.

America First MAGAnomics is unique to President Trump because he is the only one independent enough to implement them.

That’s just the reality of the situation.  They hate him for it… 

Author’s note as said in 2016: “If I absolutely did not believe this economic model was doable, I would never expand the concept and place advocacy upon it. I am an absolute believer that we can, as a nation, reignite a solid manufacturing base and generate an expanding middle class.”  Yes, I bet on Trump, and he was right.    

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Chairman Xi Plans Moscow Visit, Putin Suspends SALT Treaty, Maersk Exits Russia, Biden Talks Moldova, Planets Aligning for War

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First things first, history may not always repeat, but it always rhymes.  Secondly, history tells us that only two things have ever pulled what we now call “western nations” out of a collective economic depression; (1) war, and (2) housing starts.

If you accept the WEF climate control agenda of a ‘managed transition‘, where economies are reduced in size to match lowered energy production, as generally speaking akin to a western economic depression.… then, you begin to ask the logical question.  How do the managers avoid the consequences?

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

If global (non BRICS) economic contraction is akin to a western economic depression, I would argue the consequences are identical.  Then, when major economies are in a state of shrinking and the citizens are feeling the horrible effects, something large is needed to change the economic equation.

With central banks raising interest rates to achieve the policy supporting contraction, the option for ‘housing starts’ to change the dynamic is removed.  That leaves, ‘war’.

President Putin and Chairman Xi are not stupid men.  They are big picture strategists.

♦DATA POINT – Russian President Vladimir Putin’s move to suspend his country’s involvement in the last remaining arms control treaty with the U.S. came as a disturbing surprise to multiple former officials who negotiated the pact and nonproliferation experts committed to ending the expansion of nuclear forces. (read more)

Can you blame him?  The Western Alliance has already blamed Putin for the global food crisis they created by the World Economic Forum energy policy shift.  The Western Alliance accepts no responsibility for advancing hostility -through NATO expansion- on to Russia’s doorstep.  The Western Alliance has attempted to sanction Russia out of the global economy.  With the same Western Alliance now positioning for war, why would Putin adhere to their limitations?

♦DATA POINT – Chinese leader Xi Jinping is preparing to visit Moscow for a summit with Russian President Vladimir Putin in the coming months, the Wall Street Journal reported on Tuesday, citing people familiar with the plan. (read more)

Can you blame them?  Pay no attention to the Reuters narrative woven inside the article about China wanting to negotiate peace.  To accept that narrative is to believe there is no dragon behind the panda mask.  This far into the geopolitical awakening, to say the dragon doesn’t exist and hold its own interests (belt & road, and/or Taiwan), is really quite silly.  BRICS exists as an economic alliance of like-minded nations for exactly this geopolitical dynamic.

♦DATA POINT – Shipping and logistics group A.P. Moller-Maersk (MAERSKb.CO) has agreed to sell its two logistics sites in Russia to IG Finance Development Limited, it said on Monday, nearly marking the end of its business activities in the country. […] After that, Maersk will not have any business in Russia. (read more)

The major multinationals always position themselves to avoid the consequences of war.  Additionally, Moller-Maersk is already going to feel a major financial impact from the shrinking of the Western economies they generally service with their cargo transportation.  Smaller economies = less cargo = less ships = less revenue.  Moller-Maersk has to pick a side; they are aligned with the Western Alliance.  Hence their exit from Russia.  China/India will eventually fill the void. Again, BRICS.

These are data points just in the last 12 hours.  In addition to these data points from today, the saber rattling from the DC foreign policy and war machine financial system is on display in the Biden policy as transmitted from Warsaw. Again, just today.

Like us, I’m pretty sure from watching his statements and eventual policies over the past several years, President Donald Trump views foreign policy through the prism of economics.   If “economic security is national security,” then what is it when economic insecurity is an intentional design policy?

All of the economic data points have aligned toward direct military conflict between the Western Alliance and Russia that expands beyond the proxy war in Ukraine.

If the path is continued, this process eventually ends up with World War III.  Which, not coincidentally, boils down to the Western Economic Alliance -vs- BRICS, with a few remaining neutral and the middle east as the unknown variable.

Sound familiar?

Look below, you might find a familiar visual reference:

Any questions? 

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MUST READ – President Trump Warns Congress Not to Touch Social Security and Medicare, For a Good Reason, He’s The One Who Can Fix Them

TruthPeep Auto Sector, Big Government, Big Stupid Government, Conservative Tree House, Donald Trump, Economy, Election 2024, energy, Energy Cost, Energy Policy, Joe Biden, MAGA 2024, MAGAnomics, media bias, Medicare, News Uncategorized, President Trump, Ron DeSantis, Social Security, SSI, Trade Deal, US dept of agriculture, US Treasury, USA, USA News , , , , , , , , , , , , , , , , , , , , , , 0 Comment
MUST READ – President Trump Warns Congress Not to Touch Social Security and Medicare, For a Good Reason, He’s The One Who Can Fix Them

President Trump transmitted a message to congress, warning them not to cut Social Security and Medicare {Direct Rumble Link}.  Many politicians and pundits will look at Trump’s position from the perspective of it being good to campaign for older voters, but that’s not the core of his reasoning.

In 2016 CTH was the first place to evaluate the totality of President Trump’s economic policies; specifically, as those policies related to the entitlement programs around Social Security and Medicare.  We outlined the approach Trump was putting forth and the way he was approaching the issue.   In the years that followed, he was right.  He was creating a U.S. economy that could sustain all of the elements the traditional political class were calling “unsustainable.”

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

Before getting to the details, here’s his video message and policy as delivered yesterday. WATCH:

Fortunately, we do not have to guess if President Trump is correct. We have his actual economic policy results to look at and see how the expansion of the economy was creating the type of growth that would sustain Social Security and Medicare.  This was/is MAGAnomics at work.

♦ On Social Security – Unlike many other 2016 Republican candidates, Donald Trump did NOT call for rapid or wholesale changes to the current Social Security program; and there’s a very good reason why he was the only candidate who did not propose wholesale changes.

With the single caveat of “high income retirees” (over $250k annually), which previously Trump said he was open to negotiating on, President Trump does not consider these programs as “entitlements”. The American people pay into them, and the federal government has an obligation to fulfill the promises made upon collection.

To fully understand how Donald Trump views the solvency of Social Security, you must again understand his economic model and how it outlines growth.

The issue with Social Security, as viewed by Trump, is more of an issue with receipts and expenditures. If the aggregate U.S. economy is growing by a factor larger than the distribution needed to fulfill its entitlement obligations, then no wholesale change on expenditure is needed. The focus needs to be on continued and successful economic growth.

What you will find in all of Donald Trump’s positions, is a paradigm shift he necessarily understood must take place in order to accomplish the long-term goals for the U.S. citizen as it relates to “entitlements” or “structural benefits”.

All other candidates and politicians begin their policy proposals with a fundamentally divergent perception of the U.S. economy.

The customary political economy theory, carried by most politicians, positions them with an outlook of the U.S. economy based on “services”; a service-based economic model.

While this economic path has been created by decades old U.S. policy and is ultimately the only historical economic path now taught in school, President Trump initiated his economy policy with the intention to change the dynamic entirely, and that’s exactly what he did.

Because so many shifts -policy nudges- have taken place in the past several decades, few academics and even fewer MSM observers, were able to understand how to get off this path and chart a better course.

Donald Trump proposed less dependence on foreign companies for cheap goods, (the cornerstone of a service economy) and a return to a more balanced U.S. larger economic model where the manufacturing and production base can be re-established and competitive based on American entrepreneurship and innovation.  This is the essence of MAGAnomics.

The key words in the prior statement are “dependence” and “balanced”. When a nation has an industrial manufacturing balance within the GDP there is far less dependence on the economic activity in global markets. In essence the U.S. can sustain itself, absorb global economic fluctuations and expand itself or contract itself depending on the free market.

When there is no balance, there is no longer a free market. The free market is sacrificed in favor of dependency, whether it’s foreign oil or foreign manufacturing, the dependency outcome is essentially the same. Without balance there is an inherent loss of economic independence, and a consequential increase in economic risk.

No other economy in the world innovates like the U.S.A. President Donald Trump saw/sees this as a key advantage across all industry – including manufacturing and technology.

The benefit of cheap overseas labor, which is considered a global market disadvantage for the U.S., is offset by utilizing innovation and energy independence.  This was the core of the economic program that created so much immediate GDP growth in 2017, 2018 and 2019.

2017: […]  “This policy will be successful in moving the U.S. economy away from low-growth secular stagnation towards significantly more buoyant performance. We would not be taken by surprise by a doubling of the growth rate of real GDP in the U.S. over the next two years, nor by a further significant move up of equity valuations and a material further appreciation of the dollar.”  ~  David Folkerts-Landau, Chief Economist, Deutsche Bank

The third highest variable cost of goods beyond raw materials first, labor second, is energy. If the U.S. energy sector was unleashed -and fully developed- the manufacturing price of any given product would allow for global trade competition even with higher U.S. wage prices.  This is why President Trump traveled to Saudi Arabia as his first foreign trip, followed closely by a trip to Asia.  He was putting the basics of his U.S. economic policy into place.

Additionally, the U.S. has a key strategic advantage with raw manufacturing materials such as: iron ore, coal, steel, precious metals and vast mineral assets which are needed in most new modern era manufacturing. President Trump proposed we stopped selling these valuable national assets to countries we compete against – they belong to the American people; they should be used for the benefit of American citizens. Period.  This was the central point of the Steel and Aluminum tariffs.

EXAMPLE: Prior to President Trump, China was buying and recycling our heavy (steel) and light (aluminum) metal products (for pennies on the original manufacturing dollar) and then using those metals to reproduce manufactured goods for sale back to the U.S.

As President, Donald Trump stopped that practice immediately, triggering a policy expectation that we do the manufacturing ourselves with the utilization of our own resources.  Then he leveraged any sales of these raw materials in our international trade agreements.

When you combine FULL resource development (in a modern era) with the removal of over-burdensome regulatory and compliance systems, necessarily filled with enormous bureaucratic costs, Donald Trump began lowering the cost of production and the U.S. became globally competitive. In essence, Trump changed the economic paradigm, and we no longer were a dependent nation relying on a service driven economic model.

The cornerstone to the success of this economic turnaround was the keen capability of the U.S. worker to innovate on their own platforms. Americans, more than any country in the world, just know how to get things accomplished. Independence and self-sufficiency are part of the DNA of the larger American workforce.

In addition, as we saw in 2018 and 2019, an unquantifiable benefit came from investment, where the smart money play -to get increased return on investment- became putting capital INTO the U.S. economy, instead of purchasing foreign stocks.

With all of the above opportunities in mind, this is how President Trump put us on a pathway to rebuilding our national infrastructure.

The demand for labor increased, and as a consequence so too did the U.S. wage rate which was stagnant (or non-existent) for the past three decades.

As the wage rate increased, and as the economy expanded, the governmental dependency model was reshaped and simultaneously receipts to the U.S. treasury improved.

More money into the U.S Treasury and less dependence on welfare/social service programs have a combined exponential impact. You gain a dollar and have no need to spend a dollar – the saved sum is doubled. That was how the SSI and safety net programs were positioned under President Trump.  Again, this is MAGAnomics.

When you elevate your America First economic thinking you begin to see that all of the “entitlements” or expenditures become more affordable with an economy that is fully functional.

As the GDP of the U.S. expands, so does our ability to meet the growing need of the retiring U.S. worker. We stop thinking about how to best divide a limited economic pie and begin thinking about how many more economic pies we can create.  Simply put, we begin to….

trump west virginia

We know it works, because we have the results to cite.

It was the Fourth Quarter of 2019…..

Right before the pandemic would hit a few months later…. Despite two years of doomsayer predictions from Wall Street’s professional punditry, all of them saying Trump’s 2017 steel and aluminum tariffs on China, Canada and the EU would create massive inflation, it just wasn’t happening!

Overall year-over-year inflation was hovering around 1.7 percent [Table-A BLS]; yup, that was our inflation rate.  The rate in the latter half of 2019 was firmed up with less month-over-month fluctuation, and the rate basically remained consistent.   [See Below]  The U.S. economy was on a smooth glide path, strong, stable and Main Street was growing with MAGAnomics at work.

A couple of important points.  First, unleashing the energy sector to drive down overall costs to consumers and industry outputs was a key part of President Trump’s America-First MAGAnomic initiative.  Lower energy prices help the worker economy, middle class and average American more than any other sector.

Which brings us to the second important point.  Notice how food prices had very low year-over-year inflation, 0.5 percent.  That is a combination of two key issues: low energy costs, and the fracturing of Big Ag hold on the farm production and the export dynamic:

(BLS) […] The index for food at home declined for the third month in a row, falling 0.2 percent. The index for meats, poultry, fish, and eggs decreased 0.7 percent in August as the index for eggs fell 2.6 percent. The index for fruits and vegetables, which rose in July, fell 0.5 percent in August; the index for fresh fruits declined 1.4 percent, but the index for fresh vegetables rose 0.4 percent. The index for cereals and bakery products fell 0.3 percent in August after rising 0.3 percent in July. (link)

For the previous twenty years food prices had been increasingly controlled by Big Ag, and not by normal supply and demand.   The commodity market became a ‘controlled market’. U.S. food outputs (farm production) was controlled and exported to keep the U.S. consumer paying optimal prices.

President Trump’s trade reset was disrupting this process.  As farm products were less exported the cost of the food in our supermarket became reconnected to a ‘more normal’ supply and demand cycle.  Food prices dropped and our pantry costs were lowered.

The Commerce Dept. then announced that retail sales climbed by 0.4 percent in August 2019, twice as high as the 0.2 percent analysts had predicted. The result highlighted retail sales strength of more than 4 percent year-over-year.   These excellent results came on the heels of blowout data in July, when households boosted purchases of cars and clothing.

The better-than-expected number stemmed largely from a 1.8 percent jump in spending vehicles. Online sales, meanwhile, also continued to climb, rising 1.6 percent. That’s similar to July 2019, when Amazon held its two-day, blowout Prime Day sale. (link)

Despite the efforts to remove and impeach President Trump, it did not look like middle-class America was overly concerned about the noise coming from the pundits.   Likely that’s because blue-collar wages were higher, Main Street inflation was lower, and overall consumer confidence was strong.  Yes, MAGAnomics was working.

Additionally, remember all those MSM hours and newspaper column inches where the professional financial pundits were claiming Trump’s tariffs were going to cause massive increases in prices of consumer goods?

Well, exactly the opposite happened [BLS report] Import prices were continuing to drop:

[Table 1 – BLS report link]

This was a really interesting dynamic that no-one in the professional punditry would dare explain.

Donald Trump’s tariffs were targeted to specific sectors of imported products.  [Steel, Aluminum, and a host of smaller sectors etc.]  However, when the EU and China respond by devaluing their currency, that approach hit all products imported, not just the tariff goods.

Because the EU and China were driving up the value of the dollar, everything we were importing became cheaper.   Not just imports from Europe and China, but actually imports from everywhere.   All imports were entering the U.S. at substantially lower prices.

This meant when we imported products, we were also importing deflation.

This price result is exactly the opposite of what the economic experts and Wall Street pundits predicted back in 2017 and 2018 when they were pushing the rapid price increase narrative.

Because all the export dependent economies were reacting with such urgency to retain their access to the U.S. market, aggregate import prices were actually lower than they were when the Trump tariffs began:

[…]  Prices for imports from China edged down 0.1 percent in August following decreases of 0.2 percent in both July and June. Import prices from China have not advanced on a monthly basis since ticking up 0.1 percent in May 2018. The price index for imports from China fell 1.6 percent for the year ended in August.

[…]  Import prices from the European Union fell 0.2 percent in August and 0.3 percent over the past 12 months.

[Page #4 – BLS Report, pdf] – BLS press release.

So yes, we know President Trump can save Social Security and Medicare by expanding the economy with his America First economic policy.  We do not need to guess if it is possible or listen to pundits theorize about his approach being some random ‘catch phrase’ disconnected from reality.  Yes folks, we have the receipts.

This was MAGAnomics at work, and this is entirely what created the middle-class MAGA coalition.  No other Republican candidate has this economic policy in their outlook because all other candidates are purchased by the Wall Street multinationals.

America First MAGAnomics is unique to President Trump because he is the only one independent enough to implement them.

That’s just the reality of the situation.

MAGA for life.

Authors note as said in 2016: “If I absolutely did not believe this economic model was doable, I would never expand the concept and place advocacy upon it. I am an absolute believer that we can, as a nation, reignite a solid manufacturing base and generate an expanding middle class.”  Yes, I bet on Trump, and he was right.    

Posted in Auto Sector, Big Government, Big Stupid Government, Donald Trump, Economy, Election 2024, energy, Joe Biden, media bias, President Trump, Ron DeSantis, Trade Deal, Uncategorized, US dept of agriculture, US Treasury, USA

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Neil Oliver Describes a Life of Pretending in a Potemkin Village

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Neil Oliver Describes a Life of Pretending in a Potemkin Village

I like Neil Oliver a lot. I like his perspective, his deliberate nature, his refusal to accept the bullshit, and this monologue is one of the reasons why.  I have said it before that in the era of great pretending, the influential people will be those who do not play the game of pretense.  Neil Oliver is one of those people who refuses to play.

In this monologue Oliver uses two of my favorite metaphors to describe modern western civilization.  First, the Potemkin Villages constructed by political elite in their effort to make it seem like the world is something it is not. Second, the great pretending that is needed in order to sell it.

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

Though the monologue is specific to the current status of our cousin across the pond, the eloquence of the issues could just as easily apply here; indeed, they are almost identical.  WATCH:

[Transcript] – While reading around the subject of Russia and Ukraine this week, I came across the story of the Potemkin villages.

A legend, dismissed as mostly fiction by modern historians, has 18th century Russian statesman Grigory Potemkin building phoney villages along the banks of the Dnipro River just for effect, to create a useful illusion.

His lover, Catherine the Great and her foreign guests, were due to sail down the river on a tour and Potemkin, the story goes, wanted to give them an impressive show of a populous and thriving nation.

As I say, the idea is largely dismissed now – but the term Potemkin village has stuck and is still used today to describe the lengths to which the leaders of a failing, broken country might go in order to create the illusion of success and prosperity when the truth is altogether different.

I read about the idea, and it occurs to me that here in Britain now we are actually living in a Potemkin village – invited by our leaders to populate a phoney façade and pretend … or, God help us, actually believe, as if everything is fine.

But nothing is fine. The fact is, the story they’re telling us about this country of ours is almost entirely a con trick – persuasive only if you don’t look too closely at the flimsy, plasterboard truth of their creation.

When it came to Potemkin villages – real or a myth – it was only outsiders who were to be fooled. They were just passing through, after all.

The crucial difference for us Brits is that the fakery all around us is not supposed to trick the tourists. It’s most important function is to try and convince us, the tax-paying citizens, that all is well, when it most emphatically is not.

Look at this poor old place and wonder at how much fakery has been erected.

And remember, all the time, that we are also taxed right up the wazoo for our continued occupation of the shoddy reality some of us see around us.

There’s so much wrong it’s hard to know where to begin.

Year after year we hemorrhage more and more cash into a National Health Service that isn’t – which is to say it isn’t a national health service.

Free at the point of delivery is all very well, but it means nothing if you can’t get yourself to that point of delivery while you’ve still got a pulse.

Quite simply, the sacred-cow-cum-white-elephant that is, or has been, the NHS, is demonstrably incapable of doing the job intended for it.

Infuriatingly, politicians of every stripe, insist on calling it “our” NHS, as though it were a beloved family member. But it’s not. That use of “our” is simply to deter us from ever criticizing it

Waiting lists grow ever longer. Sick and injured people wait in agony and desperation for ambulances that don’t come – or not for many hours. We are actually told not to bother the NHS, to do all we can to avoid needing the service we pay for.

And so trusting people obey, suffering in silence in their homes, not reporting their health concerns to their GPs – the lumps, the stubborn coughs, the blood. Putting off the call for help that might save their lives – until it’s too late.

But the NHS is only one part – admittedly a hugely expensive part – of this land of make believe.

We are no longer policed by consent. Rather the police force and it is a force now, in lieu of a service, has been bent around political or ideological will. Some protest groups are deemed good – Just Stop Oil, Extinction Rebellion, Insulate Britain, Black Lives Matter and fed tea and biscuits while they block the roads and smash windows, protected from any and all opposing views.

Others espousing opinions that fly in the face of the latest ideological kink or political dikta protests about so-called vaccines, or about lockdown or illegal immigration, often prompt the unleashing of the men on horseback, the riot shields.

Mountains of data reveal that the products marketed as vaccines are no such thing. They don’t stop infection. They don’t stop transmission. They don’t stop an infected person getting sick. They don’t keep an infected person out of hospital. And they don’t stop an infected person dying.

By any measure those products, released under emergency use authorization and demonstrably the cause of countless deaths and injuries, are, at best, a façade, a front, an optical illusion intended to make the masses move in the direction desired by the leaders.

Whatever way you cut it, those products don’t work as advertised and yet still the advertising-slash-propaganda campaigns are up and running – right now, this very minute – pushing needles into as many arms as possible, including those of healthy 6-month-old babies.

Talking heads still trumpet the nonsense that the vaccine roll-out was an unqualified success. Stuffed shirts that stood at the forefront of the pandemic, pushing the medical products, pushing the lockdowns, pushing the face masks, were honoured for their efforts then and remain honoured now, even as the data makes it increasingly plain – to me at least – that what was inflicted upon our population was an unforgivable wrong. Fake knights of the realm for our Potemkin village.

Prime Minister Rishi Sunak, elected by none of us and therefore a fake PM, has promised to halt the flow of illegal migrants onto British shores. But I say he will do no such thing. In fact, I say he doesn’t even have any intention of stopping that flow. Any and every British government promises to protect our borders. This is now a fake promise with nothing behind it.

Our landscapes are littered with wind turbines and yet millions can barely afford to heat their homes because one way or another, we aren’t allowed access to the most obvious and reliable sources of energy. Drax power station used to burn coal.

Now it burns wood pellets obtained by cutting down ancient forests in Canada that campaigners there say are vital for fighting climate change. By banning coal and burning ancient forests, Drax is considered Green and so, in recent years, has received 6 billion pounds in government subsidies. Drax now emits more greenhouse gases than when it burned coal.

Drax might be held up as the epitome of the fakery of the mis-named Green agenda.

The Green agenda is not about Green, rather it is about Greed. There’s even fake meat, and fake milk, and fake cheese and scores of other fake food products besides. What else would you serve in a Potemkin village, after all, but fake food?

As we speak, they are ramping up the same old fear about Covid – that illness with the threat risk now, to most, of the common cold – the same determination to ignore everything we’ve learned over the last three years.

Actors on stage wear masks wear, and so must we.

While more and more of the population wakes up to the lies, obfuscation, fear-porn and propaganda around the so-called vaccines, around the Green agenda, around gender politics and race politics. The majority of the news media obediently pumps out the same old tosh about “safe and effective” and “climate crisis” and “preferred pronouns” and race baiting.

But the fakery has been swiftly and shoddily constructed, without the foundation of truth. For that reason, this Potemkin village thrown up around us is flimsy and should be easily demolished, if we wish it so. Underneath it all, too quiet for too long, we know the truth of Britain. More of us comprehend every day. That beyond a shadow of a doubt our leaders have tried to hoodwink us into believing things that are simply not true. The ultimate Potemkin village is all lies, no truth.

The eye-wateringly expensive NHS, costs rising years on year, is no longer a health service for all in any way that matters. I say the Green agenda is a fraud, as is the climate crisis that underpins it.

The assertions that little boys can grow up to be women and that little girls can grow up to be men, are lies. That our government means to protect our borders is a fiction.

A parliament in which over-mighty, colluding, indistinguishable political parties, dictate the law to the people whether those people like or not, is a shameful setting aside of the sovereignty of we, the people of this country.

Parliament is not and was never meant to be sovereign. We, the people, are sovereign. This is the foundation stone of Magna Carta, sealed in 1215 and as unshakeably solid now as it was then. Any attempt to reduce the rights, freedoms and liberties enshrined in that Treaty are, by definition, beyond the power of any parliament.

Here’s the thing: our sovereignty as people was sealed by that Treaty of 1215. Parliaments have come and tried to ride roughshod over the people, again and again, and those parliaments have gone.

One of many attempts to repeal Magna Carta was even made in 1969 while the general public were conveniently distracted by the moon landings.

I’ve said it before, and I’ll say it again: we see them. We see the fakery they have raised around us. But our rights are real.

Our belief in Britain is real.

Isn’t it time to see past the shaky stage set thrown up around us as a distraction and take shelter instead in true Britain – real Britain? {Transcript]

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Sunday Talks, IMF Director Kristalina Georgieva Discusses China and Global Economy 2023, Expect Chinese Supply Chain Disruptions Worse Than 2021

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Sunday Talks, IMF Director Kristalina Georgieva Discusses China and Global Economy 2023, Expect Chinese Supply Chain Disruptions Worse Than 2021

This is an interesting interview in that International Monetary Fund Globalist Director Kristalina Georgieva seems to be laying the landscape for some truthful economic news to surface on the geopolitical level; albeit keeping up the globalist pretenses around western collective energy policy.

One of the more important points Mrs. Georgieva hits on is the reopening of China, from district level COVID bubbles as a containment feature, and the likely impact it will have on global supply chains.  Mrs. Georgieva is correct on this issue.

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

China continued operating their industrial manufacturing base (despite COVID) because they built strict covid isolation bubbles around their industrial sectors geographically.  However, with China lifting those isolation bubbles, there is a great potential for the manufacturing sectors to be hit hard by short to medium term virus outbreaks.  This could/will have the potential ripple effect of global supply disruptions.

In an ironic twist, ‘deglobalization’ is now a 2023 catchphrase as various nations realize having their supply chains both dependent and interconnected is not good when there are interruptions.  A new discussion centering around being dependent on China is the specific issue now being raised.  However, the globalists are isolating their viewpoints only to raw material resourcing and development.  WATCH:

[Transcript] -MARGARET BRENNAN: I want you to take us around the world and kind of us give us that global view. Let’s start in China. China has been this hub of cheap manufacturing for the world, we are all so dependent on it but right now it looks like COVID cases are exploding as they start pulling back those zero COVID restrictions. What will that mean for the global economy Longterm and short-term?

GEORGIEVA: In the short term, bad news. China has slowed down dramatically in 2022 because of this tight zero COVID policy. For the first time in 40 years China’s growth in 2022 is likely to be at or below global growth. That has never happened before. And looking into next year for three, four, five, six months the relaxation of COVID restrictions will mean bush fire COVID cases throughout China. I was in China last week, in a bubble in the city where there is zero COVID. But that is not going to last once the Chinese people start traveling.

MARGARET BRENNAN: Because they also- they don’t have an effective vaccine right now.

GEORGIEVA: The- the vaccinations fall behind. They have not worked on anti-viral treatments and how that can be offered to people, and so they will go through this tough time. If they stay the course, and this is our advice, stay the course, over time they would be able to catch up with the rest of the world, both in terms of focusing their vaccinations, bringing mRNA vaccines into China, expanding antiviral treatment, and the economy would function. But for the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative. The impact on the region would- would be negative. The impact on global growth would be negative.

MARGARET BRENNAN: Because this is the second-largest economy in the world, and we’ve learned how dependent the world is on the Chinese supply chain. So do you expect then, a domino effect? Will inflation get worse, because all of a sudden there aren’t workers healthy enough to go to factories in China?

GEORGIEVA: We expect that there would be counterweight from the sheer opening of the economy, because up to now, the biggest impact on global value chains came from restrictions due to COVID. When you close down a big city or a big port, the repercussions for the economy is- are significant. Now, we would have the impact of people getting sick, not going to work, but the economy would be open. So the expectations we have for China is to gradually move to a higher level of economic performance, and finish the year better off than it is going to start the year. But you’re absolutely right, the world has relied on China’s growth for a long, long, long time. Before COVID, China would deliver 34, 35, 40% of global growth. It is not doing it anymore. It is actually quite a stressful for the- for the Asian economies. When I talk to Asian leaders, all of them start with this question, what is going to happen with China? Is China going to return to a higher level of growth?

MARGARET BRENNAN: You’ve said that you fear that we are sleepwalking into a world that is poorer and less secure because of a split in the global economy between the US and China. What do you mean by that? Do you see efforts here in Washington to stop it?

GEORGIEVA: It is very easy to reflect on the benefits of the world being more integrated. When we look back over the last three decades, the world economy tripled because of this reliance on an integrated world economy. Who benefited the most? Emerging markets and developing economies, they quadrupled. But rich countries also benefited, they doubled in size of the economy. So we have to be careful not to throw the baby out with the bath water. Yes, the way we have operated created excessive dependency in global chains. We were too focused on costs, how can we make products cheaper. And COVID and then the senseless war Russia started against Ukraine has shown that this is not enough. We cannot just concentrate on what is cheaper. We have to think of the security of supplies and that means diversify the sources of products that make the economy function well, lifting up the level of cost. That economic logic is not only appropriate, it is a must to follow. But we shouldn’t go beyond. We shouldn’t say, okay, we break the world into blocks, one works here, the other one works there because the costs are very, very high. We calculated that just trade, limiting trade into two blocks, would chop $1.5 trillion from the global GDP year after year after year.

MARGARET BRENNAN: If you tried to separate the US and China?

GEORGIEVA: You separate- you separate them, there is an excessive cost. So the logic should be where for security reasons there has to be careful recalibration of supply chains, do it, but don’t go beyond- don’t go into benign areas of products that have no strategic significance but they benefit the US consumer, they benefit the world economy. And this is what we are arguing for, don’t go in a direction in which this separation would make everybody poorer and the world less secure.

MARGARET BRENNAN: So you’re telling Beijing and Washington, figure it out. You can’t be in conflict.

GEORGIEVA: What we have seen in Bali is an indication that this rationale–

MARGARET BRENNAN: You’re talking about the G20 meeting–

GEORGIEVA: The G20 meeting in Bali, when the two presidents, President Biden and President Xi Jinping, met, they spent three and a half hours discussing exactly that. Where is the point of contact that makes both countries better off? And where is that- that there are differences that cannot be bridged and therefore we have to keep them–

MARGARET BRENNAN: The US is trying to block some Chinese technology companies from doing business here. They’re taking measures that are drawing some pretty bright lines between the US and China. Is that tolerable?

GEORGIEVA: We always prefer countries to seek their common interest in economic integration. And when you start breaking the interactions that are based on fair trade, you harm your own people, you not only harm the- the Chinese and therefore it has to be thought through very carefully. Again, I want to be very clear, some diversification of supplies for the security of supply chains is necessary. COVID taught us this lesson, the war taught us this lesson. So the U.S. is right to look into some areas where strategically they need to guarantee the functioning of the U.S. economy without interruptions. But do that keeping in mind the interests of the American people that would like to still have prices moderating, and actually, when we think about prices, one good news we have for 2023 is that towards the end of the year, we do expect inflation to trim down. So don’t take actions that may be contrary to that trend.

MARGARET BRENNAN: But you are predicting inflation to slow to six and a half percent from about 7%. Is that right?

GEORGIEVA: Well, towards the end of the year, we- we project it would go even further down towards the end of 2023, provided central banks stayed the course. Our big worry is that with the economy slowing down globally, we are projecting global growth to go down to 2.7%, maybe even lower next year. Remember, 2021, it was 6%. It dropped to 3.2 this year, 2022. And it will continue to drop down if central banks get the cold foot and say, ‘oh, my god, growth is slowing down, let’s slow down the fight against inflation.’ We risk then inflation to be more persistent. So our message is to central banks, you have to see credible decline in inflation and only then you can think about re-calibrating rate policy.

MARGARET BRENNAN: One of your IMF researchers gave a pretty dire prediction. Overall this year, shocks will reopen economic wounds that were only partially healed post-pandemic. In short, the worst is yet to come and for many people, 2023 will feel like a recession. What do you need to brace for?

GEORGIEVA: The- this is- this is what we see in 2023. For most of the world economy, this is going to be a tough year, tougher than the year we leave behind. Why? Because the three big economies, U.S., E.U., China, are all slowing down simultaneously. The US is most resilient. The U.S. may avoid recession. We see the labor market remaining quite strong. This is, however, mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for- for longer to bring inflation down. The E.U. very severely hit by the war in Ukraine. Half of the European Union will be in recession next year. China is going to slow down this year further. Next year will be a tough year for China. And that translates into negative trends globally. When we look at the emerging markets in developing economies, there, the picture is even direr. Why? Because on top of everything else, they get hit by high interest rates and by the appreciation of the dollar. For those economies that have high level of that, this is a devastation.

MARGARET BRENNAN: And I want to- I want to come back to you on that. And just to explain that for some of our listeners, a stronger dollar, it’s good for Americans when they go shopping abroad. It’s not good for poor countries who have taken out loans, for example, and borrowed money in dollars. And according to the IMF, 60% of low income countries are in distress because of this- this debt. So what does that look like? Do you- do you see governments collapsing with defaults? Does that bleed into the global financial system? I mean, how much of a contagion does this become?

GEORGIEVA: So far the countries that are in that distress are not systemically significant to trigger a debt crisis. Let’s just look at the map, which are these countries? Chad, Ethiopia, Zambia, Ghana, Lebanon, Surinam, Sri Lanka, very important for their people that we find the resolution to the debt problem, but the risk of contagion is not as high. However, if that list continues to grow, and let’s remember, 25% of emerging markets are trading in distressed territory, then the world economy may be for a bad surprise. And this is why at the IMF, we are working very hard to press for debt resolution for these countries and we have engaged the traditional creditors, the Paris Club, the non-traditional creditors, China, India, Saudi Arabia. I would call this very simple: urgency, we have to act. When I look at the- the debt of the world. Yes, we have to be concerned. During COVID, what did we do? Everywhere governments borrowed, rightly so, to help their people.

MARGARET BRENNAN: Money was cheap.

GEORGIEVA: Money was cheap, and we prevented a collapse of the world economy. That was the right thing to do. But once Russia invaded Ukraine and that added impetus to inflation, money is not- not cheap anymore. So what is the advice we give to governments? Focus on your budgets, make sure that you have sufficient revenues to collect and that you spend very wisely.

MARGARET BRENNAN: That’s good advice, but it’s not always easy politics to follow that advice, as you know–

GEORGIEVA: Of course it is not.

MARGARET BRENNAN: And so that’s why I want to- if- if you can explain for our viewers. You know, we spoke to the CEO of JPMorgan Chase, Jamie Dimon, recently, and he said he sees the global risk as explosive right now. He was saying things like migration, energy, national security, liquidity in the banking system, war, these are all the knock on effects of a government not being able to pay its bills and not being able to deliver for its people. Is that what you are seeing too?

GEORGIEVA: Well, what we’re seeing is the world has changed dramatically. It is a more shock prone world. The lessons we learned from the last couple of years are that no more we operate with relative predictability of what the future would bring. And these shocks COVID, the war, costs of living crisis, they compound their impact. What does that mean for governments? First and foremost, it means that we need to change our mindset towards more resilience, more precautionary actions. And at the IMF, this is what we tell our members. Act early, don’t wait until the problems deepen. And for those who need help, this is why we exist for the developing countries. The fund is a source of resilience and I am- I am very pleased that many of our members are coming to us. Just since the war started we got 16 countries coming for programs to the IMF, $90 billion in support for these countries. And right now we have 36 requests. So that acting early, when you see trouble, look for ways to strengthen your fundamentals, to have buffers to protect you and your people. This is the advice we give to governments. For those who don’t know the IMF, we were created from the ashes of the Second World War to stabilize the world economy. And at a moment like this, we come strong to help our members. My message, don’t think that we are going to go back to pre-COVID predictability. More uncertainty, more overlap of crises wait for us. Rather than crying for the time we had, we have to buckle up and act in that more agile, precautionary manner I described.

MARGARET BRENNAN: I want to make sure I get to Ukraine because I know we’re running out of time. You’ve said- excuse me- you’ve said the single most negative factor in the global economy is the war in Ukraine. And Vladimir Putin says this is going to go on for some time. President Zelensky said they need $55 billion in foreign support next year. He expects $20 billion from the IMF, is he going to get it?

GEORGIEVA: We are working on providing support for Ukraine. So far, out to the international financial institutions, we have provided the largest amount of financing for Ukraine, $2.7 billion in emergency financing, and we are working for 2023 to be a significant part of the support for Ukraine. I expect that sometime early in the year we will go to our board with the request. We have assessed the needs of Ukraine to range somewhere between three and five billion dollars a month. What Putin did with destroying critical infrastructure in Ukraine, this is horrific, and it means that in the next months the country would be more on the high end of this range because it is put in an awful position to have to restore access to electricity, to heat, to water. I have relatives in Ukraine. What I- what I know from them is it is cold, it is dark, and it is scary. Bombardments of civilian areas continue. What I also want to say is that Ukraine has proven to be remarkably resilient. Ukrainian economy is functioning. Pensions are being paid. When there is bombardment, restoration of energy, water, heat is done very quickly and we see revenues collected in Ukraine in a very disciplined manner to support the functioning of the country.

MARGARET BRENNAN: So the government’s not going to collapse?

GEORGIEVA: The government is very well functioning under incredibly difficult circumstances. No, they’re not going to collapse. And then the other thing that is so remarkable is actually the world has proven to be more resilient than we feared, a year in the beginning of the year. We look at the response to the energy shock in Europe, and Europe is moving towards independence from Russia decisively. Yes, there will be a tough winter, maybe the next one would be even tougher, but freedom from dependence on Russia is coming. It is going to be there.

MARGARET BRENNAN: I want to ask you two questions before we go. How do you describe the state of U.S. economics and politics?

GEORGIEVA: The US economy is remarkably resilient. Decision making in the US because of the way the political set is at the moment, it is more difficult. But nonetheless the US has taken some very important steps that are helping to the US economy. Like the child tax-

MARGARET BRENNAN: The tax credit. It expired.

GEORGIEVA: The credit that is it. It is contributing so significantly to reducing poverty in the US, like the infrastructure bill, like the Inflation Reduction Act. These are things that are bringing more dynamism in the US. Good for the US, good for the world. And of course staying on that course is going to be more challenging. But I do hope that the US is not going to slip into recession despite all these risks. We expect one third of the world economy to be in recession. And yes, as you said, even countries that are not in recession, it would feel like recession for hundreds of millions of people. But if that resilience of the labor market in the US holds, the US would help the world to get through a very difficult year.

MARGARET BRENNAN: And as I let you go, my final question is what leaves you hopeful in 2023?

GEORGIEVA: What leaves me hopeful is that I know when we work together, we can overcome the most dramatic challenges. In 2020, the world came together in the face of tremendous threat and was able to overcome this threat. In 2023 we have to do the same. And in this world of ours, of more frequent and devastating shocks, we have to hold hands, we have to work together. And my institution is there to bring together economic policymakers so we can be wise and persistent in the face of truly dramatic challenges we face.

MARGARET BRENNAN: Madam managing Director, thank you for your time this morning.

GEORGIEVA: Thank you. [End Transcript]

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Sunday Talks, Bank of America Economist Michael Gapen: Housing Currently in Recession, 2023 “Will Be Difficult Year”, with Continued Financial Pretending

TruthPeep Bank of America, Big Government, Big Stupid Government, Climate Change, Conservative Tree House, Decepticons, Deep State, Dem Hypocrisy, Economy, energy, Green New Deal, Joe Biden, media bias, Michael Gapen, News Uncategorized, Notorious Liars, Professional Idiots, propaganda, recession, Trade Deal, US dept of agriculture, US Treasury, USA, USA News , , , , , , , , , , , , , , , , , , , , , 0 Comment
Sunday Talks, Bank of America Economist Michael Gapen: Housing Currently in Recession, 2023 “Will Be Difficult Year”, with Continued Financial Pretending

The New Year brings a look of forward-looking economic perspectives from major financial institutions.  Unfortunately, if the perspective of Bank of America Chief Economist Michael Gapen is reflective of the larger institutional analysis, the financial pretending is anticipated to continue.

[Side Note: Notice how they will all start talking about ‘deglobalization’ in 2023. There’s a reason for that that I will touch on in the IMF interview to follow]

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

Appearing on Face the Nation Gapen accurately indicates the U.S. housing market is already in a steep economic recession, housing prices falling rapidly with a considerable amount of distance to go (-30% range), and the overall housing market will likely be in this situation for around two years.  On a macro level the Bank of America indicators line up with the general housing trajectory.  From a lending standpoint, Gapen would have specific insight.

Beyond the housing sector, Mr. Gapen starts to get sketchy.  He anticipates inflation taking 24 to 36 months to lower to the norm 2% range.  That is generally in line with CTH expectations; however, nowhere in the analysis does Gapen even mention energy costs and the overall impact to the economy from energy policy.  You will note this absence will be present in almost all financial punditries.  Mentioning “energy policy’ as a cause of economic pain is a third rail amid his peer group; it is simply not permitted.

Astute readers will note the great financial and economic pretending that surrounds the Build Back Better and Green New Deal climate change agenda will not be discussed by anyone, ever. The massive price impacts, the supply side inflation pressures, are baked into the western global economic outlooks.  It is strictly verboten to talk about climate change policy being stopped, modified, reversed or even, well, gasp, removed.  WATCH:

[TRANSCRIPT] – […] BANK OF AMERICA CHIEF ECONOMIST MICHAEL GAPEN: Happy New Year as well. Thank you for having me on.

MARGARET BRENNAN: You know, a majority of voters polled by The Wall Street Journal say that the economy is going to look and feel worse in 2023. What is your forecast?

GAPEN: So I think that’s probably true. I think we’re in a situation where the risk of recession is high, may not be a deep and prolonged one. But we’re in a situation where the economy has recovered very rapidly from- from COVID, and it’s come with a lot of inflation. And the Federal Reserve is trying to slow down the economy, to bring inflation down. And in the past, more often than not, that’s coincided with some sort of recession in the US economy and the U.S. labor market. It’s not baked in. It’s not for certain. We may be able to avoid it, but I would agree that the outlook by most people who sit in the position that I do think 2023 could be a difficult year for the U.S..

MARGARET BRENNAN: So we may be able to avoid recession?

GAPEN: Yes.

MARGARET BRENNAN: Or it could be mild?

GAPEN: That’s right. So in the past, we have been able to raise rates, cool inflation, without pushing the economy into a recession. In the mid 1990s we were able to do it. It’s just that the path to that is very tricky and sometimes involves a little more luck than than it does skill. Many other times in the past, again, more often than not, when we’re tightening policy, pushing interest rates higher to slow down the domestic economy and bring down inflationary pressures, that often means we get a period of-of higher unemployment rates and what would be characterized as a recession. In this particular case, I think it doesn’t have to be deep. It doesn’t have to be prolonged. I think what we just need to do in some ways is take the edge off an economy that’s emerged from the pandemic with a lot of strength and brought too much inflation with it.

MARGARET BRENNAN: So we’re currently at an inflation rate of about 7.1%. There is, though, increased concern that that’s going to stay sort of sticky, stay where it is for a while. How long do we have to stomach higher prices? When does it feel better for the average American?

GAPEN: Well, I think we’re actually the evidence suggests we’re already past peak inflation. So the year on year rate of inflation should start to move lower. It already did towards the end of last year, and we think that will continue to happen. So right now, the trajectory is a more favorable one. It will probably take 2 to 3 years to get inflation back down to levels that we knew prior to the pandemic. In other words, low, stable and something we didn’t necessarily talk about because it wasn’t forefront on our mind. So I’d say directionally we’re headed in the right direction, but it may take another 18 to 24 months, maybe 36 months, to fully get us back to a situation where inflation doesn’t seem to be as pressing as it is today.

MARGARET BRENNAN: And that would get us to that 2% level that the Fed is targeting?

GAPEN: That’s right. So the Fed targets low and stable prices, low and stable inflation. They interpret that as roughly 2%. In essence, what they’re saying is we want inflation to be low enough where households and businesses don’t have to think about it when they’re making their their decision. So you and I aren’t here talking about inflation. So how low is low? That’s typically about 2%.

MARGARET BRENNAN: Although they admit they can’t control a lot of things at the Fed, like gas, like food prices.

GAPEN: Right.

MARGARET BRENNAN: Treasury Secretary Janet Yellen was recently quoted in an op ed that she- she penned as saying, times can be tough, but Americans are tougher. From the depths of the crisis. We have bounced back and the president’s economic plan has bolstered the US economy’s resilience to today’s global challenges. So that’s the political plan, the fiscal spending that Congress can- can help them out with. Do you think on that front, we are on a steady path forward?

GAPEN: I do. I think what we’ve seen, the change that we’ve seen from, say, the fiscal policy side of the US economy is one where industrial policy is creeping back in again, where we’re trying to align our public sector interests with our private- private sector opportunities, the CHIP Act and protecting the supply lines for- for chips, for example, is is one of those sectors-

MARGARET BRENNAN: For semi conductors.

GAPEN: That’s right. For semiconductors, for which is a hugely important process for electronics and autos globally. And second, the Inflation Reduction Act has many components of a clean energy policy. So I think from a medium term perspective, we’re seeing greater alignment again with political objectives, public sector objectives and then private sector opportunity. We haven’t done that in the United States for several decades.

MARGARET BRENNAN: But in terms of more support for those in the economy who are getting pinched the hardest right now, I mean, do you think that this is a time to pull back on fiscal spending? You know, the criticism after the fact was that the government pumped $6 trillion in two years and that added to to prices going up.

GAPEN: Right. And I would say the spending under the CHIPS Act or the Inflation Reduction Act isn’t, you know, it’s spread out over over many years. So I don’t really think it’s something that would be boosting the economy meaningfully in the short term. You’re right. A lot of the the legacy of prior fiscal policy is still on household balance sheets in the form of a lot of excess saving, and that is helping the economy to continue to grow and continuing momentum in the economy. So I do think it’s time where we, you know, from a public policy perspective are saying we need to take a step back a little bit. We need to moderate the economy and get rid of some of the inflation that that came about.

MARGARET BRENNAN: Tighten the purse strings?

GAPEN: That’s right. Yeah.

MARGARET BRENNAN: In your newsletter, Bank of America’s economists admit to to being wrong about 2022.

GAPEN: It happens.

MARGARET BRENNAN: But so were the central banks, as you all point out, central banks were about six months late in hiking interest rates, the Fed stands out like a sour thumb in largely dismissing the hardest labor market in many decades. So if if all the experts were wrong, why should the public trust that you’re on the right path now?

GAPEN: You know, I think that the narrative I would give is we- Public policy plan for the worst, hoped for the best with the pandemic and plan for the worst. So we didn’t get the worst outcomes of-of the pandemic. Right. Some of those that were predicted early on, but we put a lot of fiscal policy support in. We kept monetary policy easy and interest rates low. And we just we kind of got too much of a good thing coming out. So now we’re just we’re course correcting that. So, yes, we were wrong on how much inflation we- we got. We had to kind of keep revising up what what we were thinking. But now the idea is what? We just need to turn the needle a bit and bring it back down. So. But that’s not easy to do. It’s not easy. And it raises the risk of a recession, particularly in the labor market. But the right long term policy is to get inflation back down, Right? The policy mistake would be not addressing this. So it may mean some pain for the economy in the short run. But if the Fed is successful at bringing inflation down, that means it’s a very good outlook for the US economy over the medium term.

MARGARET BRENNAN: But pain in the economy, I mean, let’s let’s say what that is. That’s likely job cuts.

GAPEN: Likely job losses yes.

MARGARET BRENNAN: There are 6 million unemployed people right now with a jobless rate about 3.7%. That’s a very strong jobs market. Right. Where do you think that jobless rate is going to go? How much pain are you preparing us for?

GAPEN: Right. Part of the problem in the in the labor market right now is lack of available labor supply. We do think for about three and a half to 4 million workers short of where we were prior to the pandemic because of things like lack of immigration and early retirement and so forth. So this is why if we want to, you know, reduce a hot labor market, cool it down a bit, it may involve some job losses. It could come in places like housing. The housing sector is retrenching. It could come in manufacturing the good side of the economy, which was strong in prior years. And it may come in in professional and business services and finance and other sectors like that. We will, of course, see and again, a recession is not guaranteed, but services inflation is strong. And typically the way you bring services inflation down is to cool the labor market.

MARGARET BRENNAN: But how severe? I mean, in terms of when we’re talking about people, Senator Elizabeth Warren has said the Fed is pushing hard to get more people fired. She called it extremist actions to raise interest rates. You’re characterizing this as necessary so that it doesn’t get worse.

GAPEN: That’s right. The–

MARGARET BRENNAN: But they are trying to get companies to stop hiring.

GAPEN: They are trying to reduce demand for labor. Yes. And- and it’s a fine line to walk on how much unemployment you might get out of that. The Fed’s forecast project, the unemployment rate could rise about a percentage point to about 4.6%. Private sector forecasters will range from maybe four and a half to five and a half. So that’s a big move from where we are currently. But the 20 to 25 year average unemployment rate in the U.S. is about 6%. So it would be kind of getting things back up to maybe a more normal environment, which would still be a pretty good labor market, just not as- as hot as it is today.

MARGARET BRENNAN: You know, you’re talking about going back to sort of standard models, but I think it’s really interesting what you said about retirements, that skilled workers took themselves out or left the workforce, maybe not by their choice, during the pandemic. We’re also seeing, in particular in child care, a severe shortage of workers. And that’s driving up the cost of child care as well. When do those dislocations get any better? Because those are hard things to make up for.

GAPEN: They are. They typically take years to- to make better. And sometimes it involves changes in, say, fiscal policy or the public policy aspect, not necessarily monetary policy. The Fed can induce labor- labor supply, but things like provision of health care or universal pre-K, right? Some of these elements in what was the Build Back Better agenda could be things that induce participation, right? Make it easier for parents, mothers and fathers, to participate in the workforce. But these things take- take time. And inflation is high now. And- and the risk is that what appears or should be a temporary, several year, increase in inflation turns into something that’s more prolonged. So the Fed really can’t wait for that.

MARGARET BRENNAN: Excuse me. I’m just going to take a sip of water.

GAPEN: I will, too.

MARGARET BRENNAN: I have a catch in my throat. So let’s just pick up here. When you talk about monetary policy, you’re talking about what the Fed can do.

GAPEN: That’s right.

MARGARET BRENNAN: For consumers, when the Federal Reserve keeps rates higher for an extended period of time. For folks who don’t watch Jerome Powell as closely as you and I do, they see the impact in their credit card statement or in the mortgage rate if they want to go out and buy a new home. When those Fed moves go up, the cost likely will go up for those other things as well. So if someone’s looking at the housing market, wants to go out and buy a home right now, do they also have to wait the 2 to 3 years you referenced for inflation to come down before they feel like they can afford it?

GAPEN: Well, housing is under a tremendous affordability shock right now. As you know, home prices nationally are still up about 40% relative to pre-pandemic times and–

MARGARET BRENNAN: There’s a bubble.

GAPEN: Well, I–

MARGARET BRENNAN: Jerome Powell said it was a bubble.

GAPEN: Well, okay. I would disagree with- with that. And mortgage rates are high. They’re- They were over 7%. They’re now above 6%. So, yes, I think the- home prices are starting to come back down. But, yes, it will take time to cool down the housing market and return affordability. Is it- Is it two years? You know, I don’t know, but it could be 12. It could be 12 months. Could be 24 months. Yes. The housing market currently is- is in its own recession at present. Activity has really slowed down, particularly as mortgage rates rose. It’s one of the most interest rate sensitive sectors in the U.S. economy.

MARGARET BRENNAN: You also, on a global scale, have to take into account some of those shocks. War in Europe. China reopening with its going from COVID zero to an influx of cases potentially of COVID infections. How do you account for that?

GAPEN: Well, I- I’m actually a little benefitted by being the U.S. economist because we’re still a large, relatively closed economy. Those shocks elsewhere tend to affect us less and in some ways the weaker the rest of the world is, the better it is for the U.S. because soft growth globally tends to bring down energy prices. And we’re seeing that now. Gasoline prices, prices at the pump are, you know, around where they were prior to Russia’s invasion of Ukraine that actually supports consumer spending. So outside of that, though, certainly weaker growth means we have fewer places to export. So it weighs on growth through our trade channel. China’s reopening may actually start to push commodity prices higher. So it is, you know, it’s an all intricately linked system. And we just do our best to try and understand where these forces are at any point in time. But from the perspective of the U.S., we’re- we’re generally domestically driven, services oriented, domestically driven. Weakness in Europe or changes in China’s outlook, they don’t affect us all that much. It’s really about the domestic economy. And in fact, where are labor market conditions? Is the labor market hot? Does the labor market need more support?

MARGARET BRENNAN: I want to end on a positive note, if we can. I want to ask where you see sort of the best news in 2023. What makes you hopeful?

GAPEN: What makes me hopeful is not just in the U.S., but globally, central banks have gotten the message on inflation. They reacted very quickly. Inflation is now on- on a downward trend and we think that will continue. So we think we’re kind of past the peak worry in terms of- of inflation. And I suspect we will have this conversation less and less going forward. At least that’s certainly the hope. And the other area I would say is I’m still very optimistic about the long run prospects for the U.S. economy. And in that regard what I mean is, in a world where, you know, we’re pulling back from globalization a bit and we’re fracturing a bit, and- and it’s more about spheres of influence and major economic powers operating in their region.

MARGARET BRENNAN: You’re talking about China without saying China.

GAPEN: Yes and Russia. But also there’s a surge in Brazil and India. There’s a lot more players on the scene than there was in the past. And in a- if the world is breaking up a little bit, I think the positives of the U.S. actually become more positive. The U.S. becomes a better place for investment, returns to capital and the dollar’s strength in the world system will likely be preserved. So in some ways I think our positives become more accentuated in the current environment. So we’ve got a problem with inflation now. We will likely risk recession in 2023. But beyond that, I think it’s still a very positive outlook for the U.S.

MARGARET BRENNAN: All right. Thank you so much for sharing your outlook. [End Transcript]

The U.S-China dynamic is going to be very critical this year.  PRO TIP – Anything sourced from China is going to be scarcer and more vulnerable to disruption.  If you are associated with an industry that is dependent on Chinese goods, even as an employee – watch out.  China’s manufacturing and distribution is going to be extremely sketchy due to severe domestic issues associated with COVID mitigation amid their vulnerable population.  This is going to make the U.S and Canada issues with Mexico even more important.

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Horrific Biden Consequence, 20 Million American Households Behind on Electricity Bills, Pending Shutoff

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Horrific Biden Consequence, 20 Million American Households Behind on Electricity Bills, Pending Shutoff

Long-term CTH readers might remember in 2014 when President Obama claimed U.S. families had been paying too little for electricity for too long.  As soon as Joe Biden took office, he began implementing the Green New Deal energy policy that, (a) directly forces higher costs for energy; and (b) is now creating massive problems.

In July I noted my own electricity bill had jumped 28% in a single month.  That bill was followed by another almost identical increase this month.  A review of the Consumer Price Index (CPI) for July [Data Here] shows that nationally the same thing is happening.  The year-over-year electricity price has increased 15.2%. However, worse still, the July increase alone was 1.9%, which figures to an annualized rate of 22.8%.

Peter Haughton Political Prisoner Adelaide South Australia Click HERE for TRUE story PLZ SHARE

When the growth rate of monthly increase is exceeding the year-over-year result, that means future higher prices are coming.  This is a serious problem that cannot be overstated. Already struggling with a doubling of gas prices, massive food price increases at the grocery store and the pain of all costs for goods far outpacing any rate of wage increase, this type of uncontrollable increase in price of electricity is going to hit the middle class hard.

Steve Cortes calls this the backside of the Biden created inflation hurricane.  The backside of a hurricane is the worst because it hits from the opposite direction upon already weakened infrastructure.

The hurricane metaphor is apt because any increase in energy costs will be accompanied by the simultaneous arrival of another wave of food inflation, as the massive increases in field and crop prices start to feed into the food supply chain headed to our forks next month.

Making matters that much worse, Bloomberg is now reporting that 20 million households are now behind in their utility bills, specifically electricity bills, and the moratorium on shut offs has ended.  [Paywall Article]  Steve Cortes has written about the issue on his substack [Here].

One in six U.S. households, that is tens-of-millions of Americans, are now facing having their electricity turned off due to lack of payment.  It is certainly understandable how this horrific outcome would happen. Joe Biden’s energy policies are destroying working class families with unsustainably higher prices.

20 million households is a catastrophic level of utility default.  This is a serious issue with major social implications created by the desperation of those families.  Middle- and lower-income families cannot survive this level of financial pressure.

.

Rents are behind. Mortgages are behind.  Car payments are behind. And now this report on utility bills.

Steve Cortes appeared with Steve Bannon to discuss {Direct Rumble Link} – WATCH:

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