MAGAnomics – As Predicted The Federal Reserve is Fighting Itself…

In 2016 CTH first predicted the intellectual economic disconnect that would arise out of the paradigm shift in economic principles. Initially I called it “the economic third dimension” – SEE HERE.

As time progressed through the second fiscal quarter of 2017 (Jan-March) again, we noted how the Federal Reserve was exactly failing to understand this “third dimension”; the space between Wall Street and Main Street fiscal policy – SEE HERE.

Finally today, for the first time, we see a federal reserve voting official begin to question the underlying economic assumptions of the Fed. Federal Reserve Bank of Chicago President Charles Evans is the first federal official to identify the disconnect between federal economic policy and actual economic outcomes:

WASHINGTON – […] Inflation has run below the Fed’s 2 percent target over the past eight years, Federal Reserve Bank of Chicago President Charles Evans noted.

“This is a serious policy outcome miss,” he said in remarks prepared for a conference in Idaho.

[…] Even as inflation has tumbled this year, Fed officials have brushed it off, indicating that they believe that one-off factors are keeping prices low. Those include cellphone service prices cratering because of carriers bidding to offer unlimited data plans. Fed Chairwoman Janet Yellen and others have suggested that inflation is likely to head back up after those temporary price drops slow overall prices.

“My inflation outlook is not quite as sanguine,” said Evans, setting himself apart from others at the central bank. He added that the Fed needs to hit the 2 percent target “sooner rather than later.”

Evans’ comments are the first sign of a Fed official appearing to reconsider plans to continuing raising interest rates this year. Evans is a voting member of the Fed’s monetary policy committee. He has voted twice this year to increase rates.

But inflation has continued to move lower, testing the Fed’s patience. The Consumer Price Index fell in June to 1.6 percent, the Bureau of Labor Statistics reported Friday.

Fed officials favor rising inflation not for its own sake, but as a sign that the economy is running as well as it could. Predictable 2 percent annual inflation, they believe, allows for businesses and individuals to plan ahead. (read more)

It is not “one-off factors”. The cause of inflationary outcomes not matching Fed predictions, is specifically because we are inside the inverse Maganomic space.

Yeah, forgive me – but I’m feeling a little vindicated after a year where multiple “intellectuals” stated my fundamental outlook on the U.S. economy was a theory too far ‘out there‘ to be real.  This ‘out there‘ theory is quickly becoming the ‘right here‘ reality.

As we shared at the beginning of the 3rd quarter (April-June) , I repeat as we begin the 4th quarter (July – Sept).

People may ignore this, but it does not change reality.

A series of recent headline articles [Jan-Feb ’17] – about traditional economic analysts, government and private, perplexed by financial and consumer trends – highlights the disconnect inherent amid those who cannot reset their frame of economic reference.

For 30+ years U.S. economic political policy has been driven by Wall Street interests. STOP. Main Street, the middle-class and the American worker have suffered. STOP. The successful election of Donald Trump, and the execution of his “main street” economic policy agenda, has sledgehammered the prior economic machine into a full seizure an halt. FULL STOP.

(WSJ Article Link)

It was Albert Einstein who aptly stated:

“The significant problems we have cannot be solved at the same level of thinking with which we created them.”

The same basic principle applies to those who are trying to understand and evaluate current economic activity yet failing to disengage themselves from their historic economic frames of reference.

The mindset framed around thirty years of financial political policy, intended to influence the U.S. economy and created by vested interests who were building out the legislative priorities based on Wall Streets’ best interests, will struggle to understand the new landscape which is entirely formulated to benefit Main Street.

The two economic engines, Main Street and Wall Street, are entirely detached. Time, along with focus only on Wall Street interests, has pushed those two economic engines further apart.  No-one is understanding the space between the two engines. The same policies which worked in the immediate past will not work in the immediate future.

(WSJ Article Link)

The new dimension in U.S. economics  is de-emphatic consumer spending on low-turn durable goods (measured by fed), and emphatic consumer spending on high-turn consumable goods (not measured by fed).

Just Keep Watching!

The two economic engines are now in reverse level of importance.  Trump economics or “MAGAnomics” focuses on Main Street’s economic engine.  The Fed is stuck focusing on the economy through the three-decades-old 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 (inflation, 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.

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 2018/2019 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.  You’ll be able to buy a two-year-old low mileage $100k+ high-end luxury vehicle for the same price as a mid-size economy car.

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.  However, those living day-to-day and week-to-week on their paychecks will see much more income.  Believe it.

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179 Responses to MAGAnomics – As Predicted The Federal Reserve is Fighting Itself…

  1. M33 says:

    “There’s nothing like the fresh smell of WINNING in the morning!”

    Liked by 26 people

  2. das411 says:

    if only someone had predicted this, oh maybe, 100 years or so ago…

    Liked by 25 people

    • MK Wood says:

      von Mises is a must read for everyone. Have read all of his stuff. Most enlightening.

      Liked by 5 people

    • Inflation by definition is the increase in money supply. https://en.wikipedia.org/wiki/Money_supply
      By artificially inflating and or manipulating money supply with digital currency units (“printing”) the central bank can convert your savings to it’s balance sheet. This is LARCENY BY CONVERSION. Think of it this way: Grandpa was an industrialist who invented the widget in 1913. He lived on Kings Point long island in a 30,000 sq. ft. mansion. He had a staff of 5- a butler and a maid and his servants 3. He had 3 Rolls Royce customs, and all his cloths were made for him by a haberdasher. He traveled the world in his 300′ yacht. He set up a trust for you- his yet unborn grandson. He named you. He planned for you, he intended his lifestyle to become yours when you turned 60 on July 4th 2017. He set aside enough principal ($4,000,000) to yield a net 3% per year which would pay for you to duplicate his lifestyle. In 1913 his cost of maintaining his estate, motorcars, yacht and staff and lifestyle was $120,000 per year. It’s July 4th, 2017 and you inherit the gift. How far will 120K/yr before taxes take you? And that vast fortune that Grandpa had stashed away for you? It’s not much money today is it? What happened? The Federal Reserve flooded the market with conjured up digital currency units and your 4mil is now worth 2% of what it could buy in 1913. Your family wealth was STOLEN with a scam. A government approved scam. BTW how many politicians can you buy with printed money? I’d venture a guess of about 435.

      Liked by 1 person

      • Massivedeplorable: the truth you have described above has been hidden by one fact you omitted. If your dad and you had held onto that principal in the form of blue chip stocks, your net worth (principal) in 2017 would be about $75 MILLION!

        “The U.S. dollar experienced an average inflation rate of 3.01% per year between 1917 and 2016. $4,000,000 in the year 1917 is worth $75,002,187.50 in 2016.”

        http://www.in2013dollars.com/1917-dollars-in-2016?amount=4000000

        A very conservative (2.5%) portfolio today would yield about $1,875 million income per YEAR without doing a lick of real work.

        Meanwhile, the US has TONS more STUFF all over the country now than in 1917: millions of cars, miles of railroad tracks and freight trains, bridges and highways, trucks, single family homes, apartment complexes, multi-story commercial and residential buildings, grocery stores, plenty of food and many more varieties, ability to communicate with almost anyone in the world for practically no cost and almost instantly, and on and on.,

        So, exactly what and from whom has anything been STOLEN???

        Liked by 1 person

  3. dobbsfan says:

    I love this read. Really made my day!

    Liked by 7 people

  4. magagirl says:

    It’s great to have you explain this to us SD, would had never understand it otherwise.

    It will be great to see the middle class thrive again. Can’t wait to see the now small industrial old towns being rebuilt and see their economies wake up again.

    Last week my family visited a small town in Ohio where the Procter and Gamble started their bisiness. The old houses were so beautiful, could tell the town was rich when that company’s industry was doing well in that town.

    We even saw a black squirrel!

    Liked by 12 people

  5. The Boss says:

    I like the idea of regional growth. So much so that I’d not be surprised to see that a map of the best regional growth rates in the US in a couple of years would overlay almost perfectly the 2016 election map by county.

    Liked by 14 people

    • Doug says:

      INTERESTING POINT..i think for sure the midwest will see the biggest help but i also think some of the older industrial cities in the south and northeast will see some bounce back as well… or a return of parts of their former economies… not just service industries but others as well… it will be nice to see truly diverse economies again

      Liked by 6 people

  6. 4sure says:

    Looks like I will finally be able to afford a high end luxury SUV. If gas prices stay low, I will do my part to pollute as much as I can with fossil fuels and help make man made global warming farce even a bigger farce.

    Liked by 21 people

  7. WonkoTheSane says:

    My only question is this: If the Wall Street economy comes crashing down, as many people say it must, does main street remain relatively unscathed?

    Liked by 1 person

    • stillers213 says:

      I don’t believe anyone is predicting a “crash”. I think contraction was the term used to describe the change. Big difference.

      Liked by 4 people

    • dalethorn says:

      If our president was under control of multinational interests, then the banksters could wreak havoc here. Our president deals with the multinationals, but with an America-first policy. So maybe I’m just ignorant on the subject, but once MAGAnomics really takes hold, any agitation on the part of Wall Street would have to be Wall Street representing someone else’s interests. It seems to be it would be easier to identify that way.

      Liked by 1 person

  8. 4sure says:

    Can’t believe fed reserve policy would be based on cell phone monthly rates. Amazing.

    Liked by 9 people

    • Doug says:

      seriously? scary right?

      Liked by 3 people

    • StormyeyesC says:

      cell phone rates are down but internet and cable rates are rising super fast

      Liked by 3 people

    • sundance says:

      Stunning and ridiculous when you think the Fed measures Cell Phone rates/prices for inflation, but doesn’t measure food, fuel or energy costs.

      Why? Well, that’s actually easier to answer.

      The U.S. Federal Reserve has supported the global worldview for three decades. Food, Fuel and Energy prices are now controlled by multinational corporations, as a result of political policy… which is a result of the lobbyists.

      Always remember: To understand the larger objectives of the global and financial elite it is important to understand the three-decade global financial construct they seek to protect. Global financial exploitation of national markets:

      ♦Multinational corporations purchase controlling interests in various national elements of developed industrial western nations.
      ♦The Multinational Corporations making the purchases are underwritten by massive global financial institutions, multinational banks.
      ♦The Multinational Banks and the Multinational Corporations then utilize lobbying interests to manipulate the internal political policy of the targeted nation state(s).
      ♦With control over the targeted national industry or interest, the multinationals then leverage export of the national asset (exfiltration) through trade agreements structured to the benefit of lesser developed nation states – where they have previously established a proactive financial footprint.

      The Fed policy, Wall Street Policy, has supported this multinational corporation and multinational banking scheme for three+ decades. Multinationals set the prices on the sectors they control, not the market.

      There are no “free markets” in most sectors. There are “controlled markets”.

      The Fed not monitoring food, fuel and energy prices for their inflation measures is simply evidence of the Fed accepting these are “controlled prices” subject to the bottom line financial manipulations of the corporations who control them.

      A few of us have been lonely voices drowned out for decades as we have tried to point this out. Trump is our opportunity to destroy this system of economic manipulation.

      Liked by 22 people

    • Sylvia Avery says:

      Caught my eye. It was a real WTF moment as I read the article.

      Liked by 2 people

    • The Boss says:

      I guess the free ‘obamaphone’ has kept rates down.
      Remember this lady?

      Like

    • Dixie says:

      One look at Janet Yellen is all I need to see to believe that.

      Like

  9. Lunatic Fringe, Phd. [undocumented] says:

    The Phd I gave myself is, coincidentally, in economics. The interesting question is whether Sundance predicted or caused what is going on.

    To prove Sundance’s point — and you can’t make this up — Neil Cavuto has a promo running that he covers the news “from Wall St to Washington”. Yep. That’s all that matters. Ignore everyone else.

    Liked by 15 people

  10. 4sure says:

    If the economy is thriving, won’t this also be good for wall street? I know policy based entirely on wall street is not always the best for main street, but what policy would benefit both interests?

    Liked by 2 people

    • railer says:

      Wall Street is corrupt. They are bookmakers. They gamble and make money off gamblers. They don’t care about Main Street, as long as the casino churns enough vigorish for them. They manipulate governments to facilitate their gambling and bookmaking. They produce toxic paper and manipulate trading. Worst of all, they have severed the connection between property and value. Wall Street is a corrupt bazaar.

      If Wall Street was straight, and operated as a pure market, platformed on Main Street’s good works, their interests would be in alignment. It’s not. Wall Street must be dragged back into its proper function somehow.

      Liked by 11 people

    • starfcker says:

      4sure, ask yourself this. Where does return (interest, dividends, etc.) come from? In a real economy, it comes from real businesses borrowing (leveraging) money, betting that with that additional capital, they can increase their profits even after paying the interest. A home buyer might benefit from having the home (or car) now, even if it ultimately costs more because of interest costs. Money had a price. The benefit had to outway the price. Since 2008 (TARP, obongo stimulus, various QEs, and whatever they call the current ECB money printing) there are about a trillion dollars more returns paid annually, than there are returns. Ponzi. Money has no price. Money is free. It’s no longer attached to positive economic activity. That’s why your bank pays you nothing. We have to get back to being a productive economy.

      Liked by 8 people

    • CaptainNonno says:

      Depending on Wall St requires a global perspective. Increase ROI and dividends by moving ops overseas etc. Screw Avg Americans on jobs so you reward investors i.e. Pensions, inv bankers etc. Depending on Main St requires tougher management decisions and committing to your community.

      Like

    • WSB says:

      To weigh in on your question withput sarcasm for a minute, yes it should be good for small cap stocks, new issues, and your local retail broker who is just helping you to invest in a good American company.

      I have that expertise in my family. And believe me, the regular broker has been squashed for the last 8 years because the middle class got out of the market.

      Hopefully, this will turn around for that group. People still need places to invest, and if American companies gain strength, there should be great opportunity.

      Liked by 3 people

  11. railer says:

    I just worry that putting another Goldman Sachs swindler in charge of the Fed will do us harm. Trump may not be able to take that issue head on, I realize, and will likely have to succumb to the bought-off swamprats on this. But the Fed remains a problem, and that problem must be confronted eventually.

    Liked by 1 person

  12. fleporeblog says:

    SD this one paragraph tells you how far gone the Federal Reserve is!

    Even as inflation has tumbled this year, Fed officials have brushed it off, indicating that they believe that one-off factors are keeping prices low. Those include cellphone service prices cratering because of carriers bidding to offer unlimited data plans. Fed Chairwoman Janet Yellen and others have suggested that inflation is likely to head back up after those temporary price drops slow overall prices.

    This moron that chair’s the Fed believes that cellphone service prices are the root cause of them not getting to 2% inflation. They truly are making an embarrassment out of themselves!

    I love the analogy of the 2 economic engines that started in Florida (one on I-95 and the other on I-75). We can say that those engines are heading back down to their starting points in Florida. Where would you say those engines are today?

    Map of I-75

    Map of I-95

    Liked by 7 people

    • wheatietoo says:

      Ever since they took Gas & Food out of the equation for figuring Inflation, I don’t trust their ‘inflation rate’.

      Gas & Food are two of the biggest necessities that people buy.
      Cell phone service is still an optional expenditure.

      When the Fed prints more money to prop up our Debt…the Fed itself is playing a part in Inflation, by devaluing the buying power of our dollar.

      So Janet Yellin’s hands are not clean, and I view her rationalizations as self-serving to distract from the Fed’s guilt in the mess we’re in.

      Liked by 22 people

      • georgiafl says:

        ^^THIS^^

        Liked by 6 people

      • ReloaderBLK says:

        It may be that the Fed is “Fake Econ” similar to the way that Media is “Fake News.” As SD has explained, the Fed is disconnected from reality … right now, more than usually.

        Liked by 1 person

      • dayallaxeded says:

        And taking those who have fallen off unemployment out of the employment stats is another bald faced lie. thanks a pants load complicit, lying media and Swamp pols.

        Liked by 1 person

      • Wheatietoo, another problem with inflation rates – the bureau that calculates inflation keeps resetting $100! This is so the current inflation rate won’t read something like $2,000! At 2% inflation (increase in money supply corrected for increases in production), in 50 years $100 would have doubled to $200!

        This is why the Fed’s “target” is bad, wrong, immoral and stupid. IMVHO

        Liked by 1 person

      • shannynae says:

        The equation for figuring inflation is just as skewed as they equation that they use for unemployment figures. I will bet that we were close to 30 or 35 percent. Even now they keep say that it is somewhere around 5 percent. It’s probably closer to 15-20 percent.

        Liked by 1 person

  13. Matt says:

    I am hopeful that good paying manufacturing jobs return to this nation, as I know the rest of you are. I am no economist, and so I don’t know the answer to this question. To resurrect the once thriving factories, or to start new ones from the ground up, how long would it take for them to be up and running? Is it weeks, months, or longer?

    Liked by 4 people

    • dalethorn says:

      I don’t think new manufacturing plants will be anything like the old ones. In my hometown of Akron, those huge factories were a liability after a time, and too expensive to maintain and update. I see new plants being more flexible, more modular, moveable, and able to reconfigure easily to meet rapidly changing demands. The workers of the future need real-world preparation for the jobs ahead, not just a bunch of college degrees and titles. Our new administration is working toward that end.

      Liked by 5 people

      • Sylvia Avery says:

        Again, I know nothing! This is outside my realm. But dalethorn what you say resonates with me. I believe your thoughts are true.

        I think a lot of us envision those old, dead factories humming to life again but I think those days are over. New types will replace them.

        I suspect American ingenuity and innovation are going to pave the way for these new factories and new workplaces.

        Liked by 3 people

      • KBR says:

        In my area, which was hugely textiles, the old factories have been mostly torn down. The textile industry went to China (and elsewhere) some twenty-thirty years ago.

        There might be a rare space worth refurbishing but IDK. Regulations against growing cotton (yes, one has to have special permission to even grow a single plant!) have to be changed to get the raw material in place. Regulations and new environmental processes for dyes, and for chemical operations (nylon, rayon, polyester are not grown on nylon, polyester and rayon bushes, after all.)

        But. IMO it would be very wise to bring back textile manufacturing.

        Clothmaking is a necessity. Cloth & thread=coats blankets bedsheets towels (even gauze for wounds and bandaids) that all come from textile manufacturing. And almost no textile manufacturing, from raw materials to finished products, exists anymore in the USA.

        Check the labels on what you have on right now and see.
        Been swimming, so my swimsuit was made in China, my spouse’s in Mexico. Time to shower off the clorine and dry off with our Pakistani towels. And go to bed later on our Egyptian cotton sheets.

        Cloth making has been a necessity since the “Three Sisters of Fate” were created as “goddesses.” The spinner, the weaver, the cutter of thread. Meaning from time before history this need was recognized!

        Liked by 2 people

        • Sylvia Avery says:

          “Regulations against growing cotton (yes, one has to have special permission to even grow a single plant!) have to be changed to get the raw material in place.”

          Nearly fainted when I read that. What kind of place have we become? Good grief.

          Back when I still listened to Glenn Beck, he got on a hobby horse where he was disgusted to find he couldn’t purchase a pair of American made jeans. So, kudos to him, he started up an American jeans making company.

          It was a huge undertaking because he learned there was no capacity to make the fabric any more in the US. It was an interesting story what he went through to finally produce a line of American made jeans. They cost over a hundred bucks per pair, but they were quality and would wear well I am sure. I don’t know if it is still in business or not.

          So yes, textiles are important and we are nearly completely out of the game in the US as you recounted so well in your post.

          Liked by 1 person

        • kp3ace says:

          That’s why hemp would be (and was)a good replacement for cotton. Requires less water to grow and no pesticides.

          Like

    • Sylvia Avery says:

      First let me warn you I know nothing at all. But here’s what I would suspect is true.

      I bet a lot of the lost factories would have to be torn down and rebuilt or at least repurposed if possible in some way. Technological changes and so forth would probably require a lot of retooling. And physical plants sitting vacant and abandoned have probably decayed something fierce.

      So, how long would it take to build a new factory? Yikes. I would guess 18 months to 24 months. I’m sure it depends on the location, but permitting is a long exhaustive process that has to be done before the first construction crews get on site. Environmental impact statements and stuff like that.

      But even with all of that, I bet there are a lot of smaller scale manufacturing concerns that could get it done in less time or with less build up of production lines.

      I saw an interesting segment on TV a few months ago about the Shinola Watch company. They opened in Detroit a few years ago. They chose Detroit because it was a depressed area where there is a labor pool needing jobs and lots of vacant land, buildings, stuff like that. They make high quality watches that sell for around five hundred bucks.

      It was interesting to see them at work. They have been really successful. I bet something like that could get underway pretty quickly.

      Hopefully someone who actually knows something will chime in, because as I warned you I know nothing!

      Liked by 5 people

    • Sylvia Avery says:

      I wanted to add another thought or two. Your question “is it weeks, months, or longer?” sounds to me like you are very eagerly hoping for good paying manufacturing jobs to pop up QUICKLY. I wrote my response below because I believe it will take more time than you are no doubt hoping.

      HOWEVER, I don’t want to sound like a wet blanket either because I am very hopeful. There are a lot of good things to consider. Dalethorn talks about new types of factories and manufacturing jobs that will probably be leaner and more nimble organizations, and I would think that would mean they could start up faster, don’t you?

      Also, Charles Payne had been talking at least weekly about the underlying economic indicators being high. “Soft” data like consumer confidence and manufacturers confidence levels being really high suggesting they are ready to roll up their sleeves and get to work. Also “hard” data like big increases in manufacturing things like cardboard boxes which is always seen as a precursor to an economic boom because manufacturers order more boxes because they plan to ship more because they have more orders.

      These are all good things. I am hoping there are entrepreneurs near where you are who are dreaming of expanding or who are deciding the time is right to get in on the ground floor and open up some sort of manufacturing concern. Again, I don’t know but I suspect that is happening all over this country.

      Hang in there and keep your eyes open for signs of growth.

      Liked by 2 people

    • WSB says:

      Give it two to three years depending on China. I just had an inquiry about looking for incubator space recently in the Hudson Valley NY.

      Incubators are groups/landlords/business managers who host tiny start ups that cannot afford full born infrastructure. There have been a few all over the US. LV comes to mind.

      Liked by 2 people

  14. Coast says:

    Inflation is nothing more than the destruction of purchasing power. While some people look at it as “rising prices” for goods and services, its really nothing more than the government making your money worth less and less. Remember when gas was .33 cents? I do. And today its still just a simple gallon of gas, only today its polluted with ethanol.

    Liked by 9 people

  15. Question Sundance.

    When is Trump going to repatriate all those Trillions of dollars in corporate profits, just waiting outside of the USA, like he promised in his campaign?

    How is a trade war with China going to affect this new Trumponomics?

    Basically, what I think you are saying is that as jobs are brought back, and as regulations are rolled to a side, then the American worker will be more able to compete with the tradionally cheaper environment of East Asia. Where will the growth be? Not in expensive and overcrowded cities, but in the areas where there is, what economists would call, spare capacity. Under utilized spaces, under utilized work forces, and cheaper environments.

    Liked by 2 people

    • I meant to say I was asking Sundance a question. I didn’t mean it to sound like we should all question SD in some suspicious way. Not that there would be anything inherently wrong with that. I think you get my correction!!!!

      Liked by 3 people

    • dalethorn says:

      Yes, I hope that any new dollars for infrastructure aren’t wasted.

      Liked by 2 people

    • “Where will the growth be? Not in expensive and overcrowded cities, but in the areas where there is, what economists would call, spare capacity. Under utilized spaces, under utilized work forces, and cheaper environments.”

      I think you are spot on there! The US has an immense amount of under utilized industrial buildings (especially here in the Midwest), but also an infrastructure system in grave need of repair. I think that is why you hear President Trump doing things in a particular order:

      1) Energy supplies American businesses with the physical resources they need to manufacture again, 2) removing Obamacare and regulations frees small businesses and consumers from ridiculous burdens, 3) tax reform supplies businesses and consumers with extra capital to partake in the economy, and finally 4) restoring our crumbling infrastructure increases the effectiveness and efficiency of commerce, lowering prices for consumers and lowering costs for businesses.

      It’s a brilliant strategy that has the potential to completely change the face of the American economy and let loose of decades of restricted American ingenuity! What a great time to be alive! 🙂

      Liked by 4 people

      • WSB says:

        It is repurposing. Providence, Rhode Island is a great case in point.

        Having been the capital of costume jewelry manufacturing, it fell on very hard times for years with a huge inventory of derelict factories and down-trodden neighborhoods. The city was so poor, they never had the money to raise these beautiful 19th century factory buildings.

        Good thing, because the city asked for help from developers and one local planner who had a dream to refurbish the downtown, reopen the river that wound its way through Main street, adding pedestrian bridges and rebuilding bulldozed blocks connecting two sides of each bank. The city actively created incentives, aggressively courting businesses from other areas.

        The result is now a thriving city. Providence completely remade itself and is now a premier small city in the US.

        Liked by 3 people

    • snaggletooths says:

      Its up to Congress to pass his tax plan

      Like

  16. India Maria says:

    MAGAnomics. Once again, the Trump Administration benefitting “The Forgotten”, ie. those who are in the most dire need of relief from Globalist Economic Policies.

    Liked by 4 people

  17. reenahovermale says:

    Considering that our Councilman sent a newsletter addressing the vacant and abandoned houses in our community, this past week, THIS: “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” is a God-send. Our mortgage’s value is almost neck and neck with its depreciation. Sure will be nice to see that uptick. Oh and Sundance? Visionaries often are vindicated though I’m sure it’s frustrating in the interim. Thanks for the bolster, needed it.

    Liked by 6 people

  18. Another Question for you Sundance.

    How long do you think the Chinese economy can sustain itself? When will it run out of steam? Could you maybe add some meat to the bone of what a trade war may look like with China, in terms of what we can expect to happen?

    I have a masters in economics, but outside of the numbers and mechanisms, I do think that a trade war with China, and hence, a huge dent in its markets, could actually lead to rebellion within its citizenry, and quite possibly a call to end communism and a demand for voting rights for all.

    Now that is the ultimate thing the Chinese fear most. A total loss of control. Even though Tianamen Square was suppressed, those same forces that created it were not extinguished. All sorts of things could break loose, as consequences of economic policy.

    Liked by 6 people

    • sundance says:

      A trade confrontation with China will remove the cloak of capitalism and show the true colors of totalitarian control behind the Chinese economic mask.

      Confronting China’s Oz economically is simply sending in Toto (Ross) to pull back the curtain. Easy peasy.

      Liked by 12 people

      • Thanks.

        We pray for Trump.

        Liked by 3 people

      • jmarshs says:

        The multinational corporations work with the governments of countries like Mexico and China to keep the wages artificially low – making it almost impossible to export US good to such countries and keeping the workers poor.

        Back in the 80’s, I think many of us believed that encouraging global trade would foster increased economic and political freedoms around the world. The multinationals have completely gamed the system – preventing that very thing from ever happening.

        A little wake-up call from The Donald to China may be just the thing to stir economic and political/free market development in both countries.

        Liked by 2 people

  19. Well I would like to add that Trump is a master of “The System”. Over the last number of years I have been anti-Fed…this based on the idea of fiat currency and the idea that those who print the money control the money. I always tell folks who say the country is in debt they are completely wrong! The country is not in debt because the folks that print the money own the country. The debt is leveled on the citizen who are forced at gun point to live within “The System”! America is owned by the same bankers who print the money so the country is not in debt, the citizens are in debt to the bankers…basically SLAVES.

    I always thought that the way to kill the Fed and return to a CONSTITUTIONAL money system would be civil war, but I no longer believe this…

    What is needed is Trump…he is a master with debt, he is killing the Fed by working it within the confines of its own system…basically beating “The System” with itself!!!

    JFK tried to kill the Fed when he created the Silver Certificates, Lincoln tried it with the Green Backs…both men failed! Trump is out to kill the Fed and the globalist…and…he’s doing using their own fouled system…BRILLIANT!!!!!

    Liked by 8 people

    • I get bugged by that too.

      “The govt will pay for it……..that comes out of govt coffers……..all depends upon how much the govt wishes to spend……etc etc”

      The govt has no money. Never has, and never will. I produces nothing and sells nada. It is the peoples money, which they take on pain of incarceration. So the govt won’t pay for it, but your neighbors will.

      I forgot who said this the other day, but someone said that NO-ONE pays taxes. Instead, it is taken from us. A big difference. I did laugh.

      For those who don’t know too much about what William was on about in his very observant comment, I do recommend the old, but very watchable “The Money Changers”. It is a 4 hour epic on YouTube. I would make it compulsory curriculum viewing for all 8th graders. We have been economic debt slaves since 1913.

      Liked by 1 person

  20. dalethorn says:

    I love how everyone here is so involved. My simplistic take on the Fed is that after decades of helping bleed us dry, shipping out industry and jobs etc., they weren’t quite prepared for the new economic model that turns things around. This is really incredible, to think that those big gigantic money managers and paper-shufflers could be so insulated from today’s reality.

    Liked by 7 people

  21. Sylvia Avery says:

    “basically beating “The System” with itself!!!”

    I think this is an excellent observation. Trump is so awesome to observe because of that ju jitsu thing that he does where he uses the system against itself.

    I barely understand what is going on, but I can recognize that method of his over and over in various situations. He has a genius for understanding how a complex system operates, finding the weaknesses, and using it against itself. It is the most amazing thing I have ever seen.

    Liked by 5 people

    • Sylvia Avery says:

      Oh rats, supposed to be a reply to William Ray upthread. Without that context this won’t make a lot of sense. Oh well.

      Liked by 4 people

    • piper567 says:

      Sylvia, winning is a complicated business.
      Don’t you love it that we have sundance to point out its various and glorious elements?

      Liked by 3 people

    • neal s says:

      Unlike any other ‘politician’, Trump has spent years thinking about how to MAGA. Other ‘politicians’ think about how to get elected, or how to raise funds to get elected, or how to get rich after being elected, or how to repay those who gave them funds while not making it look like they are ignoring those who actually voted for them.

      It is pretty amazing what PDJT has been able to do. So much that the MSM just has NOT been covering. But PDJT still needs our support. We can talk to people, we can try to inform others, and we can continue to pray for PDJT and everyone on his team.

      And we can let our representatives at all levels know, that if they will not support PDJT to MAGA, we will at the very next opportunity replace them with someone who will.

      Liked by 1 person

  22. rashamon says:

    Pick your poison: Today the U.S. national debt is edging toward $20 trillion and the U.S. total debt is over $67 trillion. President Trump is a very smart person, but he is not a miracle worker. The Fed and our Congress need to do more that yak, pass the blame, promise everyone a rose garden and pose for the camera. We have to stop giving out freebies and stomp on the corrupt with renewed vigor. We need a major audit of The Fed and all the departments that have grown like Topsy in scope, employment, and the corresponding pay/benefits awarded.

    Few have any conception of ONE TRILLION DOLLARS in terms that relate to one’s life. I did when my pocket calculator couldn’t handle the zeros. Well, imagine you earn $100,000 per year. It would take you 10 MILLION years to earn 1 Trillion dollars. 10 MILLION years. And that’s a long, long time.

    Some people who are far more involved in the daily details of our economy that I am have suggested that $10 – $12 TRILLION has disappeared from the US.’s books since 1998. Gone. Flown away. No one knows exactly where, but blatant stupidity by the citizens, corruption by our elected officials and alarming disinterest from former justice departments seem to the #1 and #2 and #3 villains. So take that 10 million years required to earn ONE trillion and multiply it by another 10 to 12, and don’t forget interest is running while you’re working your fingers to the bone.

    Perhaps, these experts are in over their heads when making decisions about OUR money and, for that matter, our grandchildren’s money for generations to come. What would you do if your employees treated your security so frivolously? Fire them? Cut back on the opportunity for anyone else to raid the vault again? Track with ferocity every penny going in and out of accounts? The problem now seems to be that those such as Paul Ryan just don’t answer their phones and refuse to show up for townhall meetings. They’re as “disappeared” as all those trillions that are missing.

    Think about it the next time some libtard says, “But what about the children!” when pushing one more program through your local, state or Federal government. Exactly, what kind of world are we leaving for the children?

    http://www.usdebtclock.org

    Liked by 6 people

    • MK Wood says:

      Perhaps the US should just default on that debt. Take a couple tough love years and make the US dollar more like the “greenback” the Lincoln had. The only good thing Lincoln did.

      /*conspiracy theory warning*/ lol
      Thinking his assassination had more to do with reigning in central banks than an upset rebel.Same as JFKs assassination was because of his wanting to reign in the Fed.

      Liked by 3 people

      • WSB says:

        Lincoln was assinated by a deep state conspiracy. Wilkes Booth was part of a ring that stretched from the South to Canada, but I do like the idea of Chinese Checkers.

        Like

      • rashamon says:

        /*conspiracy theory warning*/ lol

        Sure. The “experts” always pull that conspiracy label out of the hat when the people are getting too close to the truth. It’s always about money, never about morals.

        Liked by 1 person

    • WSB says:

      I have always heard it is more like $110T but who is counting?

      All I know is that PDJT went through a bit of a rough stint during his bankruptcies, but when his ‘banks’ realized that his debt was really too big and if they sank him, they would fail, they worked with him to right the ship.

      Beware black hats.

      Liked by 2 people

  23. MK Wood says:

    The folks on the Fed are mainly Chicago/keynesian economists. And not the Milton Friedman class of Chicago economist. Anyone who has read any Mises/Hayek works will know that in fact these people are not even economists but are practitioners of econometrics. They use statistical methods of historical data and attempt to force current and future economic happenings into their models.

    The economy has survived in spite of their attempts to destroy it.

    Liked by 3 people

  24. 6x47 says:

    Or, it could be the $2 trillion that banks have not been allowed to land due to the tightening of rules after the financial crisis. Money cannot drive price inflation if it’s all locked up in the financial sector, driving big returns on Wall Street and choking off the banking industry.

    Liked by 1 person

  25. Barbiedoll says:

    Thank you, sundance, for making the complex understandable. The more Trump can navigate around the parasites in Congress, the faster he can work his MAGAgic. Let the media focus on the “shiny thing” over there (Russia) while he accomplishes the big things over here. Brilliant!

    But I do have one BIG question. Sooner or later, he does have to deal with congress. It is obvious to me, from my Treehouse education, that they have no intention of passing Main Street health care reform or real tax code reform.

    I refuse to vote for a Republican rino in the 2018 midterms (I’m in PA). And a vote for a Dem/Socialist is the road to ruin of Trump’s policies and our country. I have wracked my brain and the only solution I can come up with is to primary every Republican rino (which is most of them.)

    But that seems unrealistic, as the RNC has given no indication they are remotely interested in supporting that – RNC is stuffed with Rinos, itself. How do we, mainstreet America, make our voices heard in the midterms?

    Liked by 2 people

    • KBR says:

      Don’t wait. Start holding your congressional RINO feet to the fire now. 🦏🔥

      Meanwhile find your Trumpian challenger for your district at the same time. If you cannot find one run yourself.

      Emails can be easily ignored.
      Snail mail letters might be best, cc’d to various Republican party locals and especially to any Trump interest group gives it more oomph, maybe gives it a bit of 🔥.
      If you can get enough others to sign your letter it becomes a petition.

      Liked by 1 person

      • Texian says:

        Political prostitutes are not going to change their stripes no matter how much you complain. You don’t have more money than the pimps who are paying them. Actually they are worse than hookers.. they are adulterers.. cheating on the American people they are supposed to represent..

        Replace them – and do it with normal citizens. Something like “Kid Rock” is doing.. Calling their bluff and stepping up to the plate with a bat in his hand.. and the will to use it..

        https://www.kidrockforsenate.com/

        Like

  26. Donna in Oregon says:

    I listened to Jamie Dimon blast the Congress and bureaucracy for dragging their feet on President Trump’s agenda on taxes, healthcare and infrastructure.

    He was cursing. Wonder why he got so mad when this stuff has been going on for years? I think the Fed not raising interest rates is driving some of this anger.

    Like

  27. MIKE says:

    Are you saying that the Feds’ misread will hinder their ability to manipulate our currency?

    Liked by 1 person

  28. MOA says:

    “the Federal Reserve was exactly failing to understand this “third dimension”; the space between Wall Street and Main Street fiscal policy ”

    You expect what else?
    The Fed is a cartel of private banking institutions, it cannot help but do what is in its own corporate self interest.
    If you want to bet, back self interest every time, it’s always trying to win.

    The US has the only Reserve Bank run by anyone other than govt. in the world. Perhaps we should let Boeing run the USAF.
    Hint.

    Like

  29. Dixie says:

    I have read to the end of this thread and I am still chuckling about this comment by Sundance:

    Confronting China’s Oz economically is simply sending in Toto (Ross) to pull back the curtain.

    Liked by 2 people

  30. Johnny Bravo says:

    Remember, this fed bs is just voodoo talk, intended to keep you and me disinterested in what is happening at the global level, so we turn to the sports pages;’that’s the way the elites like it.

    They can play linguistic gymnastics all they want, but when you look at your typical annual expenditure items and compare them to the previous year, e.g. home insurance, car insurance, gas, food, etc etc that is main st economics.

    If your costs have risen, it’s inflation, if it’s lower, then it’s deflation. No ‘A’ grade for guessing how you’re doing!

    As SD said (I paraphrase), the fed is not measuring inflation that affects you and me. Neither are their policies intended to benefit you or me. It’s complete tripe spoken to turn off the average Joe.

    Let’s face it, if politicians can make something as simple as politics complicated you know the fed can too! That’s the sad facts.

    The upside with Trump is that there is no verbal gymnastics, no bs, just good old “spit in your eye” facts and common sense.

    The U.S. is coming back baby, you better believe it. Let Trump worry about the macro and we can worry about the micro – simply buy American, hire American will do wonders for us and the U.S.

    Liked by 1 person

  31. ReloaderBLK says:

    The Founders of America hated the idea of a Private Federal Bank. (I’m sure everyone here realizes that the Federal Reserve is NOT a part of the gov’t.)
    The Founders hated International Bankers, describing them as more dangerous then foreign armies. There is evidence that the Federal Reserve is connected to Foreign Bankers.
    Government employees with any sort of control over the economy is a communist idea.
    Government employees should not be involved in anything that is actually important, because they always prove to be incompetent. (Military leaders are exempt from the “always” qualifier.)

    Liked by 1 person

  32. Bazza McKenzie says:

    Wall Street is not an economic engine. It is produces nothing of value. It does, however, suck value and wealth out of the rest of the community, with the aid of the Fed, and its theft of wealth from the broad community of Americans is actually counted as part of GDP.

    Most of the “growth of GDP” over the last couple of decades has actually not been growth in value creation in America and the well being of its citizens. It has been growth in the amount of money extracted from those citizens by Wall Street, that theft being falsely labeled as GDP growth, one more of the numerous lies of government.

    Like

  33. carrierh says:

    My question has always been is why do we have a huge bank outside that is not a federal bank but a private one running the show? Why not a part of our government? Now, we actually have some real economists appointed while the misnamed Federal Reserve is earning big bucks to lead us down the wrong road time after time.

    Like

    • Why do some Treepers want the federal government to run an important American institution like … medical care, medical insurance, labor, transportation, finances? Is the federal government doing good things for Americans at these agencies, or are they doing good things for the corporations the agencies represent?

      Just asking… And what the Heck is wrong with a private bank? One that is completely connected to the government – Treasury, etc., is not Private, any more than paying income taxes is Voluntary, even though many say they are.

      Like

      • To clarify – the Fed is closely connected to Treasury, almost like a government central bank. Fed governors represent each of the 12 Federal Reserve District banks, and each governor comes from each district.
        https://www.federalreserve.gov/

        Like

      • MOA says:

        “Just asking… And what the Heck is wrong with a private bank? One that is completely connected to the government.”

        You think a private banking cartel running the Reserve Bank of America is neither beyond belief nor disturbing?
        Do you understand what “conflict of interest” means?
        Silly question….of course you don’t.
        Ok. I can’t help you.

        Like

  34. ray76 says:

    “MAGAnomics” – that’s catchy!

    Like

  35. Hopefully Trump “fires” Yellen. Appoint someone to clean house at the Fed.

    Hit the nail on the head 👍 “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”

    Like

  36. CathyMAGA says:

    I hope you’re right, SD. I am being laid off tomorrow, and there are no jobs where I am. (Florida) Nothing that can make my minimum monthly nut, anyway, and I don’t live beyond my means…

    Like

  37. FiveShooter says:

    The FED…such liars! Any non-innumerate can calculate that the annual inflation rate calculated over the last FIFTY YEARS has been SIX PERCENT.

    Like

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