Don’t Blame Trump When the World Ends
“All currencies, not only the American dollar but all currencies, always go down, mainly because of democracy. The voters will vote for a person who is going to spend too much. And so you have to expect all currencies to do down. And just recently, America has started to spend too much and the currency has already gone down a lot. But other nations now realize that and they don’t want to lose out to America. So they make their money go down, too… ” ~ Sir John Templeton
A stock market crash is in the cards. When it comes, President Trump is not the one who should be blamed. Today’s fiat money system is out of control. Until something is done about it, we’ll continue to have epic asset bubbles and busts.
President Trump’s efforts to ease corporate tax policy or financial regulations are small potatoes compared to the destructive market whipsaws that come with rampant credit creation. Offshore corporate coffers would’ve never been stuffed so full if we had sound money with honest limits.
President Trump has been dealt the worst hand of any incoming US president. He’s taking over at a time when the national debt has experienced exponential growth for over 45 years. The national debt was under $400 billion when Nixon closed the gold window in 1971. Today it’s nearly $20 trillion.
The debt curve is entering a hyperbolic state. No amount of money will be able to propel it straight up forever. When you tack on unfunded liabilities, the debt runs up to $104.6 trillion. Each taxpayer is on the hook for over $874,800.
Meanwhile, stock valuations are at nosebleed heights. The Shiller’s Cyclically Adjusted Price Earnings (CAPE) ratio, for instance, is currently 28.5. That’s 70% higher than the CAPE’s long-term historical average.
There have only been two occasions over the last 100 years that saw the CAPE at a higher valuation than today: During the late 1920s, before the stock market crash; and the late 1990s, prior to the popping of the Internet bubble.
The Buffett Indicator also shows that stocks are significantly overvalued. The ratio stands at about 126%. A fairly valued market is a ratio somewhere between 75 and 90%. Anything above 115% is considered significantly overvalued.
A century of scientific mismanagement of the currency has pushed the economic, financial and social order well past any rational limit. Total government debt and stock valuations are at all-time extremes. Something big is coming, guaranteed.
But don’t blame Trump when the world ends. There’s nothing anyone can do to stop it.
‘GoldSafe provides regular commentary and analysis of gold, currencies and the global economy. All articles published here are to inform, not influence. Only you can decide the best place for your money, and any decision you make or don’t may put your money at risk. GoldSafe’s fundamental strategy requires the ownership of physical gold and does not recommend gold derivatives, ETFs or any paper substitute.’