One of the reasons CTH writes about economic matters because constructing economic prediction theories based around political policy is a hobby of mine.  Within obscure data, raw and unfiltered up-stream activity, it is entirely possible to see over the horizon.

But newly engaged people also think I’m nuts; so therefore it is also fun conversation at parties to stand above the esoteric academic fray, smile and outline actual forecasts –very specific forecasts– that most would never consider possible from a linear perspective.

People pay a boat-load of money for proprietary ownership of very accurate forecasts.  However, CTH would rather do it open source and break the historic grip of the financial control class.

If you’ll permit me a little Funday indulgence; the other reason to share predictable consequences is so patriotic readers can take a pro-active and empowering position in their own decision-making.  That motive was one of the reasons for previously sharing:

[…]  Until the two economies gain parity – any fed activity, taken as a consequence to their familiar traditional measurements (interest rates etc.), will have minimal to negligible impact on Main Street.

• Regional areas which benefited from high yield and high rates of return from Wall Street, ie. investment benefactors, will begin economic contraction. The downstream effect on state finances, and the retail and high-end service industry will also be negatively impacted.

• However, industrial areas/middle-class areas, with affordable housing and reasonable infrastructure, which have suffered in the past 20+ years, will see home values increasing as the local economy expands.

National policy (Trump Policy) which benefits Main Street also benefits local economics which are founded in manufacturing, production, and ancillary services.  In essence, the Middle-Class.

Those who benefited from high-yield international investment income will see less income.  Those who live on savings will see a moderate benefit.  However, those living day-to-day and week-to-week on their paychecks will see much more income.  Believe it. (link)

Now check out this headline from AP today discussing Connecticut:

HARTFORD, Conn. (AP) — Connecticut’s coffers are feeling the pinch of the state’s super-rich no longer paying what they used to in personal income taxes.

New figures released last week show tax revenue from the state’s top 100 highest-paying taxpayers declined 45 percent from 2015 to 2016. The drop adds up to a $200 million revenue loss for the state.

“When you look at the top 75, top 50 … this is a group of wealthy people who are dramatically less wealthy than they were before,” said Kevin Sullivan, commissioner of the Connecticut Department of Revenue Services. “These folks, for a number of reasons, are either not realizing as much income or don’t have as much income.”  (read more)

Essentially, both Bernie Sanders a Donald Trump understand the disconnect between the financial class and the average American (wealth gap) and the potential for crisis it can bring to a nation.

However, while they both identified the same problem, they each had entirely differing views on how to fix it.  Sanders wanted federal intervention via wealth distribution. Trump wanted to institute economic policies that would reverse the trend and narrow the income and wealth gap naturally.

Sanders wanted to force a gap closure, Trump wanted to create the market conditions for the gap to close naturally.   What we are seeing is Trump’s economic policy actually working as planned.

Those of us who have watched decades of federal economic interventionism by globalists and multinationals to the benefit of Wall Street know what caused the problem.  We also can understand what is possible when the economic priorities are reversed to the benefit of Main Street.

As we have previously shared –SEE HERE– the multinational corporate, business and financial world do not have models for what takes place within this new dimension in American economics brought about by a paradigm shift in economic policy.   They have no basis in modeling to fall back upon; and they have no comprehensive analytical tools to understand it.

CTH will keep repeating and emphasizing this ‘new dimension’ reality because knowing what is happening is important for all of us and our families.

The new dimension in U.S. economics  is de-emphatic consumer spending on low-turn durable goods, and emphatic consumer spending on high-turn consumable goods.

Just Keep Watching!

The two economic engines are now in reverse level of importance.  Trump economics focuses on Main Street’s economic engine.  The Fed is stuck focusing on the economy through the prism of Wall Street’s economic engine.

We are now in the economic space between both engines. The traditional cause and effect (Fed) is now uncoupled.  The administrators of the economy are perplexed; this is unfamiliar terrain.

• Wage rates will be driven up by inflation in ‘non-measured’ high-turn, domestic  consumable goods: food, fuel, energy.  The Fed does not measure this segment for inflation.

• Inflation, from the perspective of the Fed will appear artificially low because prices on the measured segment will be static: non-domestic durable goods, housing etc.  Durable good prices will remain static, and in the short term fall surreptitiously – seemingly unattached to the larger expanding economy.

Until the two economies gain parity – any fed activity, taken as a consequence to their familiar traditional measurements (interest rates etc.), will have minimal to negligible impact on Main Street.

Home values and local economic factors will be driven by “regional” economies. Period.

The exact same areas of the country which have gone through two decades of economic contraction will now see economic expansion and revitalization.  The Fed policy which influences Wall Street was not, and is not, domestic centric.  The fed policy is corporate driven, globalist in influence.

If you are making economic decisions, large purchase decisions, over the next year to year-and-a-half, take this into consideration.   Large durable goods will become cheaper over the next six months bottoming out sometime around Christmas 2017/Spring 2018.

Another example: Auto Sector. – Any auto lease rate in the next 6 months to a year will go up, considerably.  Don’t lease a car mid 2017 through all of 2018.  Actuarials are trying to gauge the forecast incoming glut of auto inventory due to high lease rates in 2016 (30%+) that will be turned in late ’17 and throughout ’18.

Conversely, late 2017 through 2018 the price of a low mileage used car (former lease) will necessarily plummet.  If you are thinking of purchasing a vehicle, wait about six months and then consider a solid used vehicle.

Regional economies will continue to drive home values.

• Areas which benefited from high yield and high rates of return from Wall Street, ie. investment benefactors, will begin economic contraction. The downstream effect on retail and high-end service industries will also be negatively impacted.

• However, industrial areas with affordable housing and infrastructure, which have suffered in the past 20+ years, will see home values increasing as the local economy expands.

National policy (Trump Policy) which benefits Main Street also benefits local economics which are founded in manufacturing, production, and ancillary services.  In essence, the Middle-Class.

Those who benefited from high-yield international investment income will see less income.  Those who live on savings will see a moderate benefit.  Those living day-to-day and week-to-week on their paychecks will see much more income.  Believe it.

 

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