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The following article by David Haggith was published first on The Great Recession Blog:
Election week is only about a week away. No matter who wins, rage will break out across the US landscape because, for the time being, the flames are kept minimally under a lid by hope on each side that their candidate will win. If Hellary Clinton loses, the establishment will come unhinged. If Trump loses, the Tumpettes are already sounding their war cry against the election results. Nothing is going to settle down no matter who wins; but to give Trump’s supporters some encouragement, should the worst befall them, I offer the following silver lining:
As horrible as I believe a Hillary presidency would be — with its suffocating smog of endless scandals and swirl of smoke clouds from all the wars she would continue to instigate — as she so clearly did while senator and then secretary of state — a Hillary presidency would have one great benefit: it would in fairly short order bring clarity for the entire nation to the fact that the nation’s economic ruin is the fault of the establishment (something about which many are obviously in great denial or they wouldn’t vote for Hillary in the first place).
Hillary is as establishment as you get; so is Obama; so was George Bush (both of them); so are most of the Republicans and Democrats in congress. While that is stating the obvious, the point I am working up to is that a Hillary victory is a chance for a total flush four years from now.
The US economy is beyond saving at this point, anyway, regardless of who wins, and it will take a crash to push the reset button and wake America up. Having that crash hit while the establishment fully holds the reins should leave 100% of the blame at their feet, and it’s not the much longer to wait.
I was thinking of writing about this hope when I read the following from David Stockman about what Hillary will face as president if she wins, with which I entirely agree, though I’d give a much shorter timeframe for the inevitable chain of events to come:
…because things are going to blow up in the next four years, there will be a stock market crash, there will be a recession, the annual deficit will be back in the plus trillion dollar category very soon and it will all come down on her head and on the watch of the establishment….
And maybe that will wake up the public, because it’s going to be bad. And what Trump proved in this campaign is that the establishment, you know, will do anything politically to stop a challenge. But if we have the crisis that I know is coming, then maybe this thing can be busted wide open and we have a chance to clear the decks and start again. (Newsmax)
That, I think, is the best outcome from this election — national clarity when it all comes down as it most certainly is beyond saving at this point. For that reason only, I think a Hillary victory would actually be the best thing to happen to us (economically, but I am not sure it is worth the other non-financial costs we’d pay). The crash of the entire economy around Hillary’s feet would galvanize the resistance to the establishment and all but assure an anti-establishment victory across the entire political landscape in the next election.
Signs of indifference that needs to break
The flatlining stock market, which I wrote about in my last article, barely had enough energy to raise an eyebrow today at the ostensibly good news that GDP growth doubled since last quarter to almost 3% — a number associated with fairly normal US economic growth.
It didn’t go up because, “Yay, the economy is finally running at normal speed” or down because “Yikes, that means the Fed will be more likely to raise interest rates.” Instead of either response, like a dying person, the market couldn’t have cared less what was happening economically in the world today. That says to me the crash is imminent.
This same day, it registered the kind of upheaval that will come from the establishment if Trump wins. The market immediately plunged a hundred points when news broke of another FBI investigation that could cause trouble for Hillary. Not to worry, though, the Fed or government fix kicked in shortly thereafter and brought the market back up to its flatline status quo.
My biggest concern if Hillary wins is that Trump (and with him all anti-establishment voters) will be made into the establishment’s scapegoat. They have already been preparing for this in consort with their media supporters, through whom they plan to say to American voters, “We told you the stock market would crash and take the economy down with it you elected Trump. See what happens when you don’t listen to us and support the superior establishment.”
Of course, a world raging with wars, as I’ve shown Hellary has planned, is a steep price to pay for the opportunity to lay all blame for our economic doom at the establishment’s feet. That’s why it’s hard to say a Hillary victory, besides meaning I have to endure four years of nausea is worth the cost. I have no idea how bad the cost in wars might actually get if she wins.
The US economy is sinking fast, regardless of today’s GDP number
Consider the following recent headlines as a sign of the way the national and global economy continue to slide into the abyss of the Epocalypse — regardless of what the GDP data indicated today: (The headlines help explain the continual decent that is seen in the flatlining graph of the Dow I presented earlier this week even during a time when the government appears to have pulled out all stops to keep the economy afloat through the election year.)
- “Caterpillar Posts Lower Earnings, Cuts 2016 Outlook” Cat has been in relentless decline for the last three years because heavy industry all over the world (including in the US) is in decline, so companies are not buying heavy equipment.
- “Twitter Said to Plan Hundreds More Job Cuts as Soon as This Week” Twitter is symptomatic of a decline throughout high-tech. The euphoric ride up for unprofitable companies came to an end more than a year ago, just as happened when the euphoric dot-com boom went bust. Even Apple, which carried the Tech sector on its back for years, reported its first annual decline in sales since 2001 due to a 17% drop in China, and China was the market that was maintaining some demand for the rest of the world.
- “Italian Bank to Cut 2,600 Jobs, Close Branches in Rescue Overhaul” Italy’s oldest bank and Germany’s oldest and largest bank continue to teeter on the edge of bankruptcy. These are some of the oldest banks in the world — banks that survived the Great Depression — but their days are clearly numbered. “The bank published the plan Tuesday as it posted a 1.15 billion-euro ($1.3 billion) loss for the three months through September.”
- “Ford to Idle Four Factories as Slowing Sales Bloat Inventory” The press was crowing in their mind-numbing way about how well American auto manufacturers were doing all of last year and at the start of this year. I said it wasn’t so — that US automakers would find themselves in a bad situation this year because because they’re now counting leases as sales and would soon be getting back millions of used cars and because they repeated all their past financial gimmicks: absurdly slack credit terms on their internal auto loans looked just like what auto manufacturers were doing before the economic crisis of 2007-8 … when I also said automakers would be going down within a year. Those slack loan terms, coupled with an increase in defaulting loans, made me say last year, “What’s your end game for next year once you have pulled sales from that year into the present with these easy-to-walk-away-from terms?” Well, we’re there … again! Its even falling apart in the area of Ford’s greatest strength — its truck and SUV plants. Mustang sales, too, dropped 32% at the start of this auto year (September).
- “Harley-Davidson Plans to Cut Jobs as US Sales Fall 7 Percent” Things are not looking any better for the nation’s oldest continuously operating motorcycle manufacturer either. “The motorcycle manufacturer cited continued slowed U.S. motorcycle industry growth as the main factor for weaker retail sales.”
- “RED ALERT: Get ready for a ‘severe fall’ in the stock market, HSBC says” A technical analyst for one of the world’s largest banks now warns that the current stock market pattern looks eerily similar to the pattern that immediately preceded the crash in 1987.
- “Bank of America has a recession warning that’s downright ‘scary’” BofA joins HSBC to say it sees a chilling trend: “We are seven years into a full-fledged, all out, central bankers doing everything they can to stimulate demand.” Yet demand is beyond evasive. “There are a lot of itchy trigger fingers. There’s lot of violent trades that can really roil a fairly complacent environment.”
- “China facing full-blown banking crisis, world’s top financial watchdog warns” “The Bank for International Settlements warned in its quarterly report that China’s ‘credit to GDP gap’ has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the … the US subprime bubble before the Lehman crisis. Studies of earlier banking crises around the world over the last sixty years suggest that any score above ten requires careful monitoring.”
- “Biggest market crash in HISTORY is coming as HUGE debt bubble bursts, top investor warns” Michael Pento, a bond fund manager who has written for The Huffington Post, Bloomberg, Peak Prosperity, USA Watchdog, and who has often appeared on CNBC says we are now living in “the most dangerous [time] I have ever witnessed in my entire life – and I’ve been investing for over 25 years. The membrane has been stretched so wide and so tight that its about to burst.”
- “Why the Stock Market Could Be Headed for a 1987-like Crash” Chris Matthews writes in Fortune that “we’re in the middle of the longest earnings recession since 2008…. What’s worse, estimates show that they will decline for a sixth straight quarter…. But Jim Bianco, president of Bianco Research argues that even this forecast might be overly optimistic…. Big picture, all the lines are headed down.”
That is far from a list of all that is currently going wrong with the US economy. It’s simply the headlines that caught my eye in the last week or two. The economy is dying to where the establishment can barely even keep the stock market alive at a time when it would be devastating for them to have it crash. Nothing has the power to save us from this fate, not even the braggadocios Trump.
If Hillary wins, all hell will break loose. It’s a rage that needs to happen, and it will be next to impossible to deny where the blame lies (I think, although the grip of economic denial has been indefatigable so far). Not saying I wish a Hillary victory on the nation or the world; just trying to be an optimist by pointing out the silver lining on the clouds.
Clarity and breaking out of economic denial so that we get a real grasp of what we need to do are more important for the nation than anyone’s poorly conceived economic recovery plan at this point. Until the nation gets real about what its problems are, its not going to find any real answers to them. That has to start with the majority of people coming to grips with the fact that the establishment doesn’t have any answers at all. It’s not even looking for an answer.
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