National Economic Council Chairman Larry Kudlow Discusses MAGAnomics….

Very funny: “President Trump’s policies have re-jiggered the incentive system in the economy.”  …Well, that’s a slightly different wording than CTH has used since 2016, but what Mr. Kudlow is highlighting is how POTUS has uncoupled the U.S. economic engine from Wall Street investment and re-coupled it to Main Street investment. [Go Deep]

Then comes the funniest pundit question ever…. “where is this disconnect coming from?”

Too funny.  Long-term CTH readers likely joining me in laughing at the predictability of it all.   [“Disconnect” January 2016]  or [“Disconnect” July 2017]

.

The Fundamentals of MAGAnomics HERE

Understanding the “Disconnect” HERE

Three years ago CTH was talking about this:  [The Fundamentals HERE] and [The New Dimension HERE]

2016 […]  Understanding the distance between the real Main Street economic engine and the false Wall Street economic engine will help all of us to understand the scope of an upcoming economic lag; which, rather remarkably I would add, is a very interesting dynamic.

Think about these engines doing a turn about and beginning a rapid reverse.  GDP can, and in my opinion, will, expand quickly.  However, any interest rate hikes (monetary  policy) intended to cool down that expansion -fearful of inflation- will take a long time to traverse the divide.

Additionally, inflation on durable goods will be insignificant – even as international trade agreements are renegotiated.  Why?  Simply because the originating nations of those products are going to go through the same type of economic detachment described above.

Those global manufacturing economies will first respond to any increases in export costs (tariffs etc.), by driving their own productivity higher as an initial offset, in the same manner American workers went through in the past two decades.  The manufacturing enterprise and the financial sector remain focused on the pricing.

♦ Inflation on imported durable goods sold in America, while necessary, will ultimately be minimal during this initial period; and expand more significantly as time progresses and off-shored manufacturing finds less and less ways to be productive.   Over time, durable good prices will increase – but it will come much later.

♦ Inflation on domestic consumable goods ‘may‘ indeed rise at a faster pace. However, it can be expected that U.S. wage rates will respond faster, naturally faster, than any monetary policy because inflation on fast-turn consumable goods become re-coupled to the ability of wage rates to afford them.

The fiscal policy impact lag, caused by the distance between federal monetary action and the domestic Main Street economy, will now work in our favor.  That is, in favor of the middle-class.

Within the aforementioned distance between “X” and “Y”, a result of three decades traveled by two divergent economic engines, is our new economic dimension…

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This entry was posted in Donald Trump, Economy, media bias, President Trump, Trade Deal, Uncategorized, USMCA. Bookmark the permalink.

47 Responses to National Economic Council Chairman Larry Kudlow Discusses MAGAnomics….

  1. ken ken says:

    Well stated as usual Sundance!

    Liked by 5 people

    • Orville R. Bacher says:

      A nation whose economy is built on earnings not asset inflation and “rents” is a nation with a solid base and a healthy future. Our Central Bank needs its wings clipped, and our banks need to be busted up, just like our Internet Monopolies.
      The more free the domestic market, the more resilient the economy.

      Liked by 8 people

      • G. Combs says:

        A nation’s economy aka WEALTH is built on Farming, Logging, Mining, Manufacture and useful ideas. These are the hard assets that the Clintons and others have sold off at a major profit.

        I knew a guy in Boston whose business was literally dismantling and packing up US factories and shipping them overseas!

        Then there was the leveraged buyouts where corporate raiders borrowed banker script (I refuse to call it money) bought stock, took over a DEBT FREE US corporation stripped and sold of assets and left the hollowed out shell burden with the debt to the bankers.

        Liked by 1 person

  2. 6x47 says:

    The stock market (“Wall Street”) is a huge bubble inflated by the easy money central banks poured into the financial markets to stabilize them after the crisis of 2008. The Fed increasing interest rates is simply removing life support now that the patient can survive without it.

    President Trump’s focus on growing GDP is providing an outlet for those who flee as the bubble collapses to add real value to the speculative monetary value currently propping up their portfolios.

    Liked by 6 people

    • yy4u says:

      Just imagine what Obama’s economy would have been had the Fed not artificially kept him afloat.

      Liked by 9 people

      • Rock Knutne says:

        Agreed.

        Just imagine what the ACTUAL unemployment numbers were during those same years if those who dropped out of the workforce were actually counted as unemployed!

        Liked by 11 people

        • Uncle Max says:

          Yeah, but it didnt’ matter, the media went along with it all because .. Obama! The uncritically reported on ” jobs saved! “.. or ” recovery summer “.. ” shovel ready jobs”, ” cash for clunkers! “… they were all sycophants and fellow-travelers… happy to spin and spin and shape the narratives… even though the reality was far more dire and dystopian.

          Liked by 5 people

        • mugzey302 says:

          Or, if the reduction in unemployment numbers had been compared to the increase in welfare enrollments. Hussein’s shell game.

          Liked by 2 people

  3. Robert Barry says:

    Devaluation of Chinese currency matches the added-cost of tariffs, so net effect to us Wal-Mart shoppers is small. China will have fewer dollars left at the end of the transaction, so China will buy fewer US treasury bonds.

    Liked by 4 people

  4. Publius2016 says:

    After the midterms, Wall Street will move higher as the RED WAVE holds serve! Once there is certainty that the tax cuts and America First policy is in place, than watch out! Like A Space Force we’ll take off to Mars!!

    Liked by 3 people

  5. fleporeblog says:

    These pundits have absolutely no clue how to spin it anymore! I listen to Bloomberg Radio whenever I am in the car. It is funny how these so called experts don’t know their ass from their elbow. Everything they predict turns out to be the total opposite.

    From the article linked above:

    He complimented the administration’s “negotiating tactic” on China and predicted a trade deal. He said the relationship between big business and the White House is “active and good.” And the same week Trump said the Fed had “gone crazy,” Dimon said he had “never seen a president who wanted interest rates to go up.”

    From the article linked above:

    The Survey of Consumers came in at 99.0 in October, though the closely-watched gauge of consumer sentiment remains at “quite favorable levels” and above the average reading for 2018. That’s down slightly from 100.1 in September and the consensus forecast was looking for 99.5.

    However, the Survey of Consumers has pegged consumer sentiment at record highs during the economic resurgence under the Trump Administration. Sometimes when you’re on top, there’s only one place to go.

    From the article linked above:

    With the release of last week’s jobs report reflecting a near 50-year low for unemployment, consumer confidence has started to rise once again.

    The Rasmussen Reports Economic Index for October rose to 144.2, up five points from September and the second highest finding in four years of surveying.

    Liked by 4 people

    • No_BlahBlah says:

      I agree with all your points but I would like to add,

      The artificially low interest rates Mandated by the FED had/have one goal;
      Reducing carrying charges for issued treasury debt
      Allowing the results of the obscene acceleration of government spending to be somewhat masked/hidden,
      While at the same time being A MASSIVE THEFT OF CAPITAL FROM MIDDLE AND WORKING CLASS SAVERS.

      Historically interest rates have bee higher, MUCH higher,
      At 6% savings rate it takes 12 years to double your money at a bank without the risk even of a mutual fund

      At 0.5%
      It takes 144 years
      The bureaucrats who recommend and facilitate this THEFT have much to answer for

      Liked by 12 people

      • fleporeblog says:

        Great 👍 point! Thanks for pointing that out.

        Liked by 1 person

      • daughnworks247 says:

        Rule of 72.
        When my son was born and they put him on my chest, I wanted to say something profound to him. In my drug induced state, all I could think of was “The Rule of 72”.
        Yep, it was the most important thing I could think of (I’m an accountant, after all).
        Compound interest trick for doubling money is easily calculated using the number 72.
        For instance, at 10%, money doubles in 7.2 years.
        At 24%, money doubles in years.
        At 12%, money doubles in 6 years.
        And so on.

        Liked by 2 people

  6. mj_inOC says:

    Love your and Larry’s perceptive, intuitive analysis, sundance!

    Folks, gotta remember this is MSNBC.

    Liked by 2 people

    • GB Bari says:

      Exactly my observation.

      Every interview on CNBC of our Trade team is laced with “buts….”, negatives, worries, non-specific references to people who are worried about problems, unsustainability, negative effects of tariffs, blah blah blah blah.

      These CNBC people and the alleged “experts they keep referencing who are negative on the sustainability of the current economic trends and Trump MAGAnomics strategies in general have become so obviously full of the brown stuff that emerges from the west end of an east bound horse.

      Liked by 1 person

      • MB224 says:

        Yep. They’re gutter, 100% traitors. This particular bozo was looking for anything negative, ANYTHING. I just wish Kudlow has said, “Well have you taken a look at what decades of inaction and negligence have gotten us?” But he said more or less the same thing.

        Liked by 1 person

  7. Deplorable_Infidel says:

    “Understanding the distance between the real Main Street economic engine and the false Wall Street economic engine will help all of us to understand the scope of an upcoming economic lag; which, rather remarkably I would add, is a very interesting dynamic.”

    Whenever one of these posts come up that include the summary’s and “Go Deep” links, I forward it to as many people in my address book as I can (that would be interested in the subject). I especially instruct my four children (29-35) to read up, because they do not have the reference points of “how it was” back before the globalist lie took over, pushing for some “New World Order” that will never happen (*).

    Isaiah 14:12 How art thou fallen from heaven, O Lucifer, son of the morning! how art thou cut down to the ground, which didst weaken the nations!

    (*) There are plenty of individual nations with their own rulers mentioned in the end times occurring as described in the the books of Daniel and Revelation

    Liked by 5 people

  8. MattyIce says:

    So wages will naturally increase faster and more than inflation, which will offset any pain felt from inflation, good for the working middle class. I wonder, how the newly retired generation, like my parents, will fair during this time as their income is now based of off 401k stockmarket investments instead of wages. If the stockmarket is stagnant and inflation increases how will this affect them? I get the idea, I’m on board 100% with Trumps economic policies, I just am curious.

    Liked by 1 person

    • mimbler says:

      Depends on what interest rates do. As we retirees age, we have to pull more out of stocks because although stocks go up over time, they can also dip for 10 or more years, and when you are living off savings you have to pull money out each year.

      For example in 2008 stocks went down 50 percent. If you needed income, you had to sell stocks at 50 percent of what they were previously worth, and it was quite a while before the recovered and began increasing from that value.

      Pulling money out of stocks when they are low is a killer, so you need more in savings.

      If savings pay 2 percent and we have 5 percent inflation, we obviously lose 3 percent a year without spending any money.

      So it depends, but in general inflation is a tax on retired people. Few pensions are indexed to inflation, and interest rates are seldom above or much above inflation so little true income is generated.

      Social Security -is- linked to inflation so that is a safety net for a portion of your income.

      Just my take on it; I’m sure there are other opinions as well.

      Liked by 2 people

      • GB Bari says:

        Good points, Mimbler.

        Anyone who is a savvy investor or who has savvy investment manager will know that their portfolio needs to be diversified to spread or minimize risk as desired and to be able to take advantage of upsides in various investment markets.

        Domestic stocks look good while bonds may be proving their ability to perform as well. Those who were not well-diversified may shift some dollars to balance their portfolios.

        One thing is for certain, conditions change over time. Very little is static.

        However there is currently nothing of which I am aware that is boiling up “under the surface” even close to what had happened leading up to 2008 with the subprime mortgage market abuses (among other abuses and bad government decisions) that were escalating and destined to fail.

        Liked by 2 people

        • mimbler says:

          Agreed GB.

          As to your last paragraph I agree with it as well, but as a cautious investor I always consider the black swan as well.

          It’s a balancing act. Too conservative, and you lose appreciation. Too aggressive and you risk more loss.

          The best path is viewed only with hindsight! 🙂

          Liked by 1 person

  9. daughnworks247 says:

    Treepers are way ahead of the curve. We luv ya’ Sundance. Don’t forget to wear your sunscreen.

    Liked by 3 people

    • piper567 says:

      One element in all of these discussions ab the economy that I love is:
      no matter which of the wolverines, or the koala, are talking to the “press”, they All support the President’s take, his policies, his deals, etc.
      No amount of trying to get them to speak of contradictions or what have you can pick up any steam or provide negative soundbites.
      Teamwork.

      Liked by 3 people

  10. stablesort says:

    The independent Fed is an operator without a leash; some argue that that independence is necessary if the Fed is to achieve its purpose. However, the Fed raised the interest rates three weeks before the mid-term elections resulting in a market crash that could only help the Democrats.

    Had the Fed delayed the rate hike for three weeks, would not have affected the mid-term elections and there would have been little to no impact on the Fed’s intended result. We’re all allowed to draw our own conclusions.

    Liked by 2 people

    • swampratterrier says:

      Not this time.

      We are on to their Evil Manipulations.

      Like

    • MB224 says:

      True but the rate hike also makes the dollar stronger thus making imports cheaper. This is important for the holiday season in the middle of a trade war with China. But the bottom is the Fed needs to be nationalized or dismantled altogether and put under the authority of the Treasury. I’m reading about Jackson’s war with the bank back in the 1830s and how the bank manufactured the “recession” very intentionally and consciously to create so much suffering that people would turn on Jackson. The bank i.e. Biddle, also loaned/bribed politicians into turning against Jackson and casting their votes for the bank. It’s truly a shame that Henry Clay didn’t realize the bank was a far greater threat than he imagined Jackson to be.

      Like

  11. No_BlahBlah says:

    The Keynesians that infest the FED, IMF all of the NGOs are a bit put out,

    Their models, that don’t reflect reality, are being ignored,

    The GE’s of the world that have lobbied (bribed) bureaucrats for 50+ years are worried they might have to compete with VSGPDJT putting regulations designed to raise the capital bar before market entry INTO THE SHREDDER

    BTW,
    That interviewer, I’d say he deserves a couple of wedgies and t1tt1e twisters
    What a shill

    Liked by 4 people

    • Mosby Creek says:

      “we’re pushing away the old models–and bringing in the new models” –we’ll take your economic models any day my President over the harridan and the ‘you didn’t build that’ variety.

      Like

  12. wolfmoon1776 says:

    Then comes the funniest pundit question ever…. “where is this disconnect coming from?”

    There is a monster loose on Main Street and Wall Street. Only Wolverines and Koalas can see it. It’s changing everything!

    Liked by 5 people

  13. daughnworks247 says:

    In all the Khashoggi uproar over the missing journalist, do you kind of get the feeling you might smell a rat? You were right.
    From Michelle Malkin’s group, Nick Short.
    “In the past 24hrs we now have a glimpse of exactly who is feeding the establishment media reporting on the #Khashoggi matter — including at least one source who was tied to a joint Libyan intelligence & al-Qaeda plot to assassinate the Saudi crown prince.”
    https://pjmedia.com/trending/beware-of-media-sourcing-for-jamal-khashoggi-scoops/

    Liked by 2 people

    • daughnworks247 says:

      Here is a whole thread of research, docs, receipts, etc.

      Liked by 3 people

      • daughnworks247 says:

        So, Almoudi went to prison for the attempted assassination of Saudi Crown Prince, FEDERAL prison, and Saffuri was his deputy for almost 20years?
        And Saffuri started an Islamic Institute which was funded by Almoudi, the guy who tried to kill the Prince? And Saffuri is also getting money from the Qataris?
        AND Saffuri arranged the first IFTAR dinner in the White House because he was buddies with Hillary? AND met George W Bush, with Karl Rove, as a candidate in 2000?
        BUT
        We’re supposed to believe Saffuri is just a WaPost reporter?????
        Bwwhwhhwhhahhaaa.
        And the WaPost and Isikoff (reporter for Yahoo who was one of the laundered sources for Chris Steele/Dirty Dossier, to provide cover for the FISA warrant on Team Trump, are the two entities trying to sell the American public this story? Three weeks before the mid-terms?

        Liked by 3 people

  14. ltravisjr says:

    Question: In the most basic sense, our broad markets reflect the “worth” of both Wall Street and Main Street companies taken together. To this point the economics have favored Wall Street, so stocks of their companies have valued higher. As the economy moves to a Main Street model, companies based on that will do better while the Wall Street ones will do worse. Now, when this all switches over, will the added worth of the Main Street companies offset the lost worth of the Wall Street ones? To cut to the chase, will the broad market indices see a rise or a decline after we have moved from Wall Street to Main Street?

    Liked by 1 person

    • MB224 says:

      I think it will. The inflated companies still provide a service of some sort, except for the Facebooks and twitters but even they will benefit from higher wages, more spending and thus more advertising revenue. For them, though the issue is clearly censorship and coming regulation and hopefully fines. If you put home first, the way our magnates did in the 19th century and most of the 20th, everyone wins. But when you decide to abandon your own country and people to chase cheaper costs, well, you may win in the short or medium term but eventually someone’s going to figure you out. It’s disgusting how these CoC characters think they’re bigger than the country that created them, all for a friggin buck.

      Liked by 1 person

  15. ZooNTexas says:

    When did they start putting disclaimers on the end of these shows?

    Like

  16. pgroup says:

    “I don’t understand.”
    — Whadda-ya-mean Dean, The Chiorboys

    Like

  17. railer says:

    Another sure sign that MAGAnomics is in play. A 155mph hurricane blasts through the Gulf, and have you looked at the price of crude? Barely nudged, and even dropped Wed and Thursday. Just a few years ago when the Masters of the Universe Hedge Funders were in charge, every wind gust in the Gulf sent crude rocketing up. When you unrig the game and open the market, that’s what can occur, you’re spared from the market manipulators.

    Liked by 2 people

  18. Maquis says:

    How? How does Kudlow not rip these moron’s throats out or nail their lying tongues to the floor? Amazing.

    GBPDJT
    🇺🇸

    Like

  19. jeans2nd says:

    All of this is a beautiful thing, is it not? Including the confusion of the Nobel Economic Prize winners. That alone makes all this worth every teensy piece of time, talent, and treasure dedicated to it.

    Liked by 1 person

  20. Disgusted says:

    It was sadly obvious this guy “Scott”? had his talking points SO ready to go, and expected Larry would never beat him at his game! Too bad tv guy was the sad one in the end! Could not back his expected tale of whoe he was claiming he was hearing from about their businesses performances! It started to sound pretty damn sad! He wanted a Larry to disagree with a President Trump! Didn’t work, did it, Kid?

    Liked by 1 person

  21. Pete says:

    China expert Michael Pillsbury was interviewed by Charles Payne of Fox Business and had this to say: https://www.foxbusiness.com/politics/us-china-trade-war-might-end-soon-asia-expert-says

    Like

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