Trump Bringing the United States Into Bankruptcy (The Plan All Along)

Why Wall Street’s Seasoned Pros Are Jumping Ship –Bonner/Bonner And Partners
“The Fed has announced a program of QT – quantitative tightening – in which it sells (or simply allows to expire) the bonds in its portfolio at a rate of $600 billion a year. Meanwhile, the federal government itself has cut taxes, forcing it to cover its shortfall by borrowing nearly $1 trillion in 2018. The combination will add nearly $2 trillion a year to the supply of bonds available for purchase. Who will buy them? At what price? Most likely, no one will buy… unless rates rise to make it worth their while. Most likely, rates will rise. Most likely, asset prices will fall. And some of Wall Street’s most seasoned pros are bailing out. Bloomberg says famous analyst Dennis Gartman is selling: In Wednesday’s edition of his eponymous newsletter, the economist said he is ‘calling for a major, multiyear top on the equity markets following the recent volatility and following the reversals to the downside that took place yesterday in the Dow Industrials; the Nasdaq; the S&P and the Russell 2000.’ He said the forecast represented a ‘watershed’ moment. And founder of the DoubleLine Capital investment firm, Jeffrey Gundlach says so, too: ‘We are late in the economic cycle… and it is unusual that the deficit is expanding… [adding stimulus this late in the cycle] has never happened before.’ Gundlach sees the deficit getting worse, with ‘a lot of bonds supplied to the market.’ He predicts a negative rate of return for the S&P 500 this year. My conviction is high, higher than that the 10-year yield will break to the upside. And most likely, the feds will respond with even more EZ money policies. The Fed will cut rates to zero… and beyond. And the federal government will both cut taxes… and expand spending.”

How Debt Could Blow Up the Trump Economy –Fortune
“In Trump’s first three full quarters in the White House, GDP clocked growth just shy of his vaunted goal of 3%, a performance that by recent standards looks stellar. The stock market has added a quarter to its value since the election, a $5 trillion vote of confidence. The jaunty outlook is recharging animal spirits in corner offices: In its January survey of small companies, the National Federation of Independent Business found that 32% of the enterprises rated the present climate ‘a good time to expand’; that was a record high and a threefold increase from late 2016. Fueling the giddiness is the President’s signature legislative achievement: the Tax Cuts and Jobs Act, which slashed rates for corporations from 35% to 21%. The new law is a runaway hit with business leaders….Trump’s heady economic potion, however, is masking misguided policies that could leave those same businesses with a severe hangover from today’s celebration. The U.S. government’s huge and growing budget deficits have become gargantuan enough to threaten the great American growth machine. And Trump’s policies to date – a combination of deep tax cuts and sharp spending increases – are shortening the fuse on that fiscal time bomb, by dramatically widening the already unsustainable gap between revenues and outlays. By 2028, America’s government debt burden could explode from this year’s $15.5 trillion to a staggering $33 trillion – more than 20% bigger than it would have been had Trump’s agenda not passed….A cyclical downturn, a sharp decline in stock prices, or an unexpectedly steep increase in real interest rates dictated by skeptical overseas investors might be the catalyst that prompts legislators to get serious about reducing entitlements and debt.”

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