Trump the Perfect Scapegoat for When the Fed Bubbles Pop
In his most recent Gold Videocast, Peter Schiff pointed out that Pres. Trump inherited an economic mess from Barack Obama. Even if he can manage to get his policies implemented in the midst of the political circus going on in D.C., it isn’t going to be enough to stop the downward economic spiral.
Yes, having Donald Trump president is better than having Hillary Clinton as president. But he is not a get out of jail free card for the economy… The problem is the damage is going to hit on Donald Trump’s watch. Barack Obama got out of Dodge just in time.”
Brandon Smith at Alt-Market.com agrees that the economy is due to take a plunge. He takes things a step further, asserting that Trump is just the scapegoat the central bankers have been waiting for. Now they can nudge up interest rates and blame the chaos caused by popping bubbles on the president specifically and Republican policies in general.
I have been warning since long before the election that Trump’s presidency would be the perfect vehicle for central banks and international financiers to divert blame for the economic crisis that would inevitably explode once the Fed moved firmly into interest rate hikes. Every indication since my initial prediction shows that this is the case… I continue to go one further than the mainstream media and say that the Trump administration is a giant cement shoe designed (deliberately) to drag conservatives and conservative principles down into the abyss as we are blamed by association for the financial calamity that will occur on Trump’s watch.”
This will work because most Americans don’t have even a basic understanding of economics. They dutifully accept what the mainstream media spoon feeds them. In the minds of many Americans, if the stock market is rising and unemployment is low, everything is great!
And hey! Stocks are soaring, right?
And yet there is a huge disconnect between stock market prices and economic reality. It’s clear that Fed policy has pumped up a massive stock market bubble. Analysis last year by Yahoo Finance showed 93% of the entire stock market move since 2008 was caused by Federal Reserve policy. But people don’t understand this. They turn on CNBC, see the stock markets rocketing upward, and assume the economy is great.
Peter Schiff often uses an analogy to explain how low interest rates and Federal Reserve intervention impacts the economy. He compares it to a heroin addict. Take away the heroin, and the junkie goes into withdraw. It takes more and more of the drug – easy money – to keep the addict happy. Smith uses a similar analogy.
Look at it this way — imagine the economy has a terminal disease and the only thing keeping it alive is a highly addictive drug called ‘free money.’ It’s a rather terrible life, barely worth living, but the economy still has a faint pulse as long as the drug is administered. Now, what would happen if the Fed suddenly cuts off the drug supply? Well, the economy will die in a very frantic and horrible way.”
When this happens, people won’t be happy. Trump will make the perfect scapegoat. Don’t buy into it. As Smith points out, the blame falls squarely at the feet of the central bankers.
I want to remind people that the full and tantamount blame for any economic crisis (and the final phase market crash) in the near future is placed on the Federal Reserve and international banks. All future shocks to the financial system were made possible because the establishment and the Fed have gutted our economy, stuffed it with the fluff of fiat stimulus and left it to lumber aimlessly since 2009.”
In a recent interview, former Reagan budget director David Stockman warned that the bubbles in both the stock and bond markets are going to pop. He called the stock market “unstable” and “rigged,” warning its ultimate collapse will cause “chaos.” But people still don’t see it. They are still buying stocks.