Tom Paine 1949
Diamond Member
- Mar 15, 2020
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The Dow went up over 5000 points in the 9 months after Trump lost the election. He predicted a market crash.
Without a doubt the big stock market movers and shakers, the Big Banks and the Fed were glad Trump lost in 2020. Biden was right to give the Fed the political freedom it needed to raise rates (at the risk of leading to a “hard landing” recession) and for it to introduce QT. In this sense at least some discipline was returned to the market. Of course fiscal discipline won’t return anytime soon no matter who is in office, but now the economy may grow itself out of danger and set the stage for lowering the debt in the future, which would be the best outcome.
That was a brave move, well organized by Powell, to confront inflation head on. Plenty of forces in banking and the stock market have pushed for a premature lowering of Fed interest rates. Trump had pressured Powell and pushed for “Zero Interest Rates” — a totally irresponsible policy.
On returning factories to the U.S. Trump had managed what? To delay the closing of one small air-conditioning factory? To supposedly get an agreement to keep Harley Davis here? But as I recall even that later went up in smoke! Since 2021-22, on the other hand, factory construction in the U.S. has had a fabulous run, and huge efforts are being made to introduce high-tech industries, microchip foundries, etc.
Of course the stock market and economy could still crash if the Russians, Chinese, or Iranians go crazy and war spreads, upsetting the world economy.. Much is out of the control of any President.
The biggest threat may end up being political anarchy and civil war coming from Trump and his supporters (the Texas Governor for example). Normally a disfunctional government is ok for big businesss, even preferred generally, but things have reached such a crisis level that our private economy can be harmed deeply if deadlock continues. Even now, MAGA can use their majority in the House to refuse to pay our debts, which is probably the only way a great country like ours with an experienced Central Banking system and fiat currency can actually go bankrupt.
Of course the 2024 election, should Trump win, may change everything.
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