Top US politicians describe the US economy as the “mightiest of all time”.
Houston, we have a problem! The next tariff tax deadline is now only about three weeks away.
While Trump’s diehard fans may want him to hike these taxes again if China doesn’t “play ball”, massive FOREX liquidity flows suggest that the world’s biggest money managers are becoming extremely concerned about the level of risk in the US economy.
American GDP growth has literally incinerated (from what I predicted would be a 5% peak as the tariff taxes were launched), and this dollar versus yen chart shows a massive bear wedge pattern in play.
That bear wedge is ominous.It suggests giant bank FOREX traders believe something is about to go badly wrong with the US economy… more wrong than the horrific sub 1% GDP growth in play now!
Trump’s initial platform of tax cuts, law and order, and deregulation was awesome.It created surging markets (both gold and stocks), a positive vibe for citizens, and solid GDP growth.
That platform has been replaced with macabre QE and negative rates worship, turning a blind eye to a skyrocketing deficit, and a crazed attempt to boost growth with tariff taxes… and it’s all happening as the world de-dollarizes at an ever-faster rate.
Stagflation is emerging, and some economists are forecasting that in 2020 corporate earnings and revenue growth will both come in at the sub 3% marker. Debt would surge in that scenario.
While the economy wallows in a tariff tax and debt quagmire, stock market investors have been repeatedly saved by the Fed.
Top earners pay 50% capital gains tax, which arguably makes the government the main beneficiary of upside stock market action.This is, quite frankly, insane.
The alternative, a democrat administration, would be even worse news for most people with stakes in America.
It’s unknown how Jay Powell would respond to a fresh hike in tariffs in December.He might cut rates and do more “QE that is not QE”, but what if he doesn’t?