- We don't know what will happen with tariffs, with immigration, with fiscal policy, and with regulation policy.
- Federal Reserve Chair, Jerome Powell (Last week).
What?
Don't fret! This is not a mea culpa. If it were, Powell would admit the Fed was established for the rich - to protect against foolish, risky ventures by using taxpayer money as a back-up (privatize the profits, socialize the losses). However, with so much happening last week and so much passed as "a matter of fact" that something began turning in our stomachs.
We had President Trump signing executive orders, one after another. We had the yearly meeting in Davos and the first meeting of the Federal Reserve for 2025. We got news, but no ramifications from acts. Actions have consequences. The stock market quivered, but ended up for the month to which is usually a good indicator for the year. Nevertheless, there were too many actions. This is the root of our worry.
Of course, we expect a tit-for-tat in tariffs. This is why we advocate not tokenism of 10% to 25%, but real, harsh taxes like 100% or MORE. We force our manufacturers back home. The politics of small actions only hurt ordinary Americans with higher inflation. In either case, an economic slowdown will happen. Our method will have the results intended, but pussy-footing around will cause serious economic repercussions. The yearly GDP came in at 2.8% and the yearly inflation rate came in at 2.9%. We still are in a stealth recession. The people are suffering and Wall St does not represent our economic struggles. Even the ground hog sensed the poor vibes. He decided to go back to sleep for another six weeks and then, maybe things will appear better. The only problem with that is the date. It will be around the Ides of March. If you combine that with the year of the snake, something will hit the fan?
A quick recap of the first year in office...
Previously
New administrations usually get a honeymoon period before a shoe drops. This use to be the thinking. One year into Bush's first term, nothing until 9/11. The first shoe led to war that lasted over twenty years. His last two years saw the second shoe drop. The financial crisis. We all suffered except the rich. They received tax cuts worth millions and our deficit hit $9 trillion. President Obama was greeted by the recession. He listened and followed all the greedy, idiots that caused the problem. He bailed out the rich and left the rest of us to our own devices. No honeymoon. President Trump's first term had a short honeymoon and then, COVID-19. The rich got richer and more of us got poorer. In the decade, our deficit added another $10 trillion. It was $19 trillion and growing...
President Biden wanted a legacy of doing for everyone. His chip and infrastructure acts were home runs. Everything else was not. His spending was reckless. During his term, we should all realize that government lies and that the Federal Reserve do not know what they are doing except burying all of us in debt. The cycle says that $40 trillion is coming even before the decade ends. This is where we are except no one mentions how many enemies of the US and our democratic experiment are out there.
List
The real dangers start at home. The rich have lobbyists in the ear of ALL politicians. If you look at the above patterns in government, only the rich benefitted with tax cuts and the lie of the Federal Reserve saying that they pump money as stimulus into the economoy. They pump it into finance which is the pocket for the wealthy. This needs to change! Change the tax structure and loopholes to put a 50% tax rate on the wealthy. This is needed to save the dollar or we become a third world nation which the anti-democracy people aspire.
European banks generally follow the Fed.They say this is cooperation. We use a different word, collusion. With our no rate cut, we expect the ECB to do the same. They get a cheaper euro that will help with their exports unless new tariffs give cause for concern and a change in policy. China has put them on notice with its subsidized EVs that threaten the economies of the EU. Then, the old problems of Europe, the aristicracy. The elites use Davos. They use their power and influence to push ideas that cause many problems in American society. Many large firms had ties to Nazi Germany and they resent the US for WWII. Immigration is causing budget and economic problems. The war in Ukraine does not help. Overall, things do not look good for the EU.
South America begins in Mexico due to culture, religion and language. Mexico sends 80% of its exports to the US. Tariffs will hurt not only Mexico, but US citizens with inflation. China is also seeking to use the new NAFTA to push their EVs into the US to which will further hurt our economy. We say end the lie of free trade. End NAFTA! Go back to taxing some things with the idea that balances trade with our two border nations.
Brazil is playing us and China. This will explode on them. The leading economic nation in the southern hemisphere will find that their BRICS alliance is a tool being used by China with Russia being duped. They should emulate Paraguay, Uruguay or Chile. Hey, Argentina, are you listening?
China is building "ghost" cities because they are looking at war. Their other choice could be their long game option. We have a feeling that they will try another end run to change the world away from the dollar to the IMF's Special Drawing Rights. This egotism will not end well. What will the first option bring? What will their new empire get? The loss of millions of Chinese, destruction to the planet and loss of resources. Wake up! Learn to live and let live. Peace.
