Eight years of Trump
Nov. 9th, 2016 07:21 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
timeletsTrump's biggest beef with the "financial elites" was that after a number of his spectacular bankruptcies nobody would lend him any money. For a person who loved to speculate with "other people's money" it was a disaster and he hated the Wall Street for that.
Now, the voters of the Rust Belt entrusted Trump with the entire United States Treasury. The early indications are that he's going to spend the money with abandon and the Congress will not mind it at all because Trump's "infrastructure investments" mandated by the government will be laden with pork. In combination with major tax reductions, the plan is likely to produce large budget deficits and inflation (remember Milton Friedman's work?). Typically, the Fed tries to curtail the inflation by raising interest rates. But here's the catch: in 2018 Trump plans to appoint a new Fed Chairman who would help promote Trump's expansionary economic agenda. Given Trump's track record, we know what to expect: rapid growth for the first 2-4 years (morons will be happy to re-elect Trump in 2020), troubles during the next 2-3 years, then a blowup. Although, in this case it'll be the taxpayers, not Trump Airline investors, who will hold the empty bag.
As an individual investor, I don't have a problem with that because I win both with low taxes and access to quality investment opportunities. On the other hand, an average citizen, including the poorly educated morons in the Rust Belt who voted Trump into the office yesterday, will end up with no pension, no medical care and a huge deficit hanging over their children and grandchildren. Unfortunately, it'll be too late to teach them that you can't make something great again, because you can only make something great anew.
Now, the voters of the Rust Belt entrusted Trump with the entire United States Treasury. The early indications are that he's going to spend the money with abandon and the Congress will not mind it at all because Trump's "infrastructure investments" mandated by the government will be laden with pork. In combination with major tax reductions, the plan is likely to produce large budget deficits and inflation (remember Milton Friedman's work?). Typically, the Fed tries to curtail the inflation by raising interest rates. But here's the catch: in 2018 Trump plans to appoint a new Fed Chairman who would help promote Trump's expansionary economic agenda. Given Trump's track record, we know what to expect: rapid growth for the first 2-4 years (morons will be happy to re-elect Trump in 2020), troubles during the next 2-3 years, then a blowup. Although, in this case it'll be the taxpayers, not Trump Airline investors, who will hold the empty bag.
As an individual investor, I don't have a problem with that because I win both with low taxes and access to quality investment opportunities. On the other hand, an average citizen, including the poorly educated morons in the Rust Belt who voted Trump into the office yesterday, will end up with no pension, no medical care and a huge deficit hanging over their children and grandchildren. Unfortunately, it'll be too late to teach them that you can't make something great again, because you can only make something great anew.
