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I was born shortly after World War II.
I’ve paid close attention to speeches by presidential candidates ever since Eisenhower.
And I can tell you unequivocally: Despite everything they may say, they’ve always had more in common than not.
Typically, no matter how they struggled to differentiate themselves, many still came off sounding like Tweedledum and Tweedledee.
This year may be the paramount exception — Clinton declaring last week in San Diego that Trump would lead the nation into war; Trump retorting from San José that she’s guilty of criminal activity; each offering a radically different choice for voters.
But more so than ever before in our lifetime, when it comes to our money, our retirement and our entire financial future, the next president’s number one challenge is White House impotence.
Fast forward seven months, put yourself in the president’s shoes, and you’ll see exactly what I mean …
The Day after Inauguration, January 21, 2017
You’re in the Oval Office. The Rose Garden is blanketed with snow.
And regardless of what you may have planned for this memorable day, you’re confronted with a series of fix-or-fail financial and economic disasters that trump all else.
Disaster #1
U.S. Commercial Real Estate
You thought the real estate boom-and-bust story was done and over. So did all your economic advisers.
You should have known.
But it seems everyone’s eyes were on the last war (the housing market). So they underestimated — or completely overlooked — the epic new bubble (in commercial real estate).
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| This chart, presented by Mike Larson at the Las Vegas Money Show in May 2016, stood out as a blatant warning of the coming debacle in commercial real estate. |
Specifically, no one on your team saw or paid much attention to this chart, demonstrating that …
1. The year 2016 brought an epic commercial real estate bubble …
2. That bubble greatly exceeded the comparable bubble of the 2008-2009 real estate debacle. And …
3. The commercial real estate market began to peak in the middle of the presidential campaign.
If you’re president of the United States in 2017, this is a huge shock. It takes priority over your list of favorite spending initiatives, be it for jobs, health care, or walls. And for reasons I’ll explain in a moment, there’s virtually nothing you or the Fed can do to stop it.
(Mike Larson was among the first to warn about this in The Next Big Real Estate Turn Is Here and Is a New Real Estate Crisis Looming?)
Disaster #2
U.S. Automobile Industry
The domestic auto market delivers your second shock, and again, you or your advisers should have known: A full eight months before Inauguration Day, JD Power released telltale numbers that clearly forewarned of this debacle:
They showed that over 31% of auto borrowers owed more on their cars than their cars were worth, a record high.
They showed that a 29% of auto loans stretched out as long as six to seven years, triple the level of 2010 and also a record high.
They showed that even 84-month loans weren’t enough to satisfy the auto makers’ lust for sales to consumers unable or unwilling to pay for the car they want. So they decided to push leases like never before, accounting for a record 33.6% of auto purchases.
And as if all that was not enough to lure in buyers, auto salespeople were offered huge incentives of approximately 9.3% of the cars’ sticker prices, also a new record.
(See also Is Leasing Boom Setting the Stage for an Auto Sector Bust? and Shocking New Stats Show Why Auto Bubble is a Disaster in the Making.)
Exactly eight years earlier, your predecessor faced what appeared to be a similar battle on the Detroit front. But alas, as I’ll explain in just a moment, the weapons he had at his disposal for that fight are now gone.
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Disaster #3
Sinking Global Economy
Now, as POTUS #45, if you and your experts weren’t prepared for this particular shock, you truly had your heads in the sand.
Why? Because 21 days before the 2016 Indiana primary, when Donald Trump became the presumptive Republican nominee, the IMF declared in its own bold headline …
“Global Economy Faltering from Too Slow Growth for Too Long.”
Moreover, in their World Economic Outlook, they listed a host of reasons …
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“The slowdown and rebalancing in China
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“A further decline in commodity prices, especially for oil, with sizable redistributive consequences across sectors and countries
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“A related slowdown in investment and trade
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“Declining capital flows to emerging market and developing economies,” plus
- “A host of noneconomic factors, including geopolitical tensions and political discord.”
Thus, as you look beyond our shores from the vantage point of the January 2017 Oval Office, you see that one by one, the largest economies of the world have taken big hits, due to precisely the factors cited by the IMF months earlier. You see …
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China, the world’s second largest economy, on the verge of a volcanic eruption due to extreme income inequality, spurring popular revolts, labor protests, massive government crackdowns and more revolts. (For more proof, don’t miss The Biggest Global Risk Right Now and The China Fallacy.)
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The European Union, with a combined GDP that rivals that of America’s, very vulnerable to surging anti-EU forces.
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Not to mention Brazil, already in its worst recession since the 1930s … Russia, long-ago devastated by oil-price collapses … and every major commodity-producing economy on the planet, suffering similar hits.
“Strange,” you say to no one in particular. Why is it that none of this even rose to the level of background noise during the 2016 presidential campaign? Now how are we gonna scrap, or at least redirect, America’s biggest trade deals? Â
“For the backburner” comes the immediate answer. “With the largest economies in trouble, the ships of global trade are sinking across the Atlantic and Pacific. No one, not even someone with intense scorn for NAFTA or TPP, wants to rock those boats just now.”
Meanwhile, back home, America’s large corporations began cutting back sharply on their capital expenditures one year before Inauguration Day.
Then, a half year before Inauguration Day, on June 3, 2016, the U.S. Labor Department shocked the world with news that job growth was collapsing.
So right now, no one, not even among politicians enamored with the idea of a $15 minimum wage, wants to poke more holes in the job market.
Disaster #4
No More Weapons
All of these disasters — and others — funnel into one, single, not-so-strange economic phenomenon: Recession.
And alas, that’s also something you should have known. On average since World War II, recessions have struck every 73 months. And by January 2017, you’re already into month 91.
What is out of the ordinary is this: Unlike any other president in modern history, you’re virtually powerless to do much about it.
You see, every other president in the last century has always had a powerful ally for combating recessions — the Federal Reserve. And the Federal Reserve has forever had a very simple, very effective weapon — interest-rate cuts.
In fact, in past recessions, the Fed has always dropped its official rates sharply, and all your predecessors in the Oval Office had this great advantage …
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In 1960, under Eisenhower, the Fed cut the effective Fed Funds rate by 2.5 percentage points.
In 1970, under Nixon, the rate cut was 6.2 percentage points.
Ford presided over a whopping 8.3-point cut in the mid-1970s.
And the Fed under Carter beat them all with a 10.3-point cut in the early 1980s.
George H. Bush got a 6.9-point cut from the Fed.
Bill Clinton got a 5.5-point cut during the Tech Wreck of the early 2000s.
Plus, your immediate predecessors, George W. Bush and Barack Obama were in office when the Fed gave them a 5.1-point cut to combat the housing bust.
Ever since 1960, presidents of both parties got magnanimous nonpartisan gifts from the Fed in the form of rate cuts averaging 6.4 percentage points.
But you? No. You’re out of the luck, at the tail end of the chain letter. You get nothing. Zilch.
You give the Fed Chair a call. You ask her what she can do for you.
She talks about below-zero interest rates. “Maybe a half point at most,” she says.
But even then, she warns, it’s highly experimental. It impacts only a very tiny portion of the nation’s largest financial institutions. It never reaches the people. And by the way, we already know it’s not working for the Europeans or the Japanese.
“How about some more money printing,” you ask a bit sheepishly.
“Been there, done that,” she retorts. “Ran into law of diminishing returns. Economy sinking regardless. Looking for the exit doors for months now. Still can’t find ’em. But there’s no way in hell we’re going back there.”
You meet with folks from all political and financial persuasions. Your first week in office comes to an end. Then your first month. No one has any brilliant new ideas.
And you haven’t even begun to worry about government gridlock.
My advice to both the reader and future presidents: Don’t overestimate your power to adapt to — let alone bring about — change. Prepare yourself ahead of time for economic disasters already in the pipeline. And always beware of your limited ability to stop them.
Good luck and God bless!
Martin
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
{ 88 comments }
The Fed will never admit they are powerless. They will go to -2% rates if they must to prove they are not impotent… The next President will abolish the Fed if they do as you are saying.
negative 2% rates? you’re scaring me, Dd. how can taking money out of investors’ accounts add stimulus to an economy? we have some real idiots running this world.
$ 1000. GOLD….and you just figgered that out now!
There is no real valued “money” in investor’s accounts, only Debt IOUs. The Elitists took over on Jekyl Island a long time ago. The idiots are the ones left holding the bag…..of Feral Reserve notes, no different than the Boliviar in Venezuela…..just ink on paper, no intrinsic value at all. An illusion described by Dorothy in the Wizard of OZ.
Just because our “leaders” are baffled when offered a box of crayons, doesn’t mean they can’t “learn.” First they struggle with opening the box, and then seem overwhelmed with the decision as to which end of the crayon to use! But, just as one does with a three-year-old……
Agreed Dd. The Fed must be destroyed for there to be any chance of recovery. Every day that goes by makes the problem worse. JFK tried to print real money and they killed him.
Martin,
Thanks for a great post. As a person on the downside of my sixties toward seventy, I too reflect on how the benefits of experience and time help give me a clearer perspective than I had in my more youthful years.
I agree with everything that you’ve stated, but would add that I believe that all of this is part of a larger plan. Whether you use the slope of the curve of our national debt, or the labor participation rate, or the number of people now well over their heads regarding their auto debt, the slopes of each curve is leaning in the wrong direction. So, my gut/experience tells me that all of this simply cannot be random. When I take the time to contemplate where all of this is going/where it will take us to I cannot find a good landing place, or happy outcome for Americans or most investors. I am far from a conspiracy person, but when something walks and quacks like a duck, well you know the rest.
Please continue sharing your insights; they are greatly appreciated.
Dr. Mike Clancy
Dr. Clancy, I am closing in on my 80’s and agree with your ‘conclusion’ that it would seem very unlikely that this situation is random.
Hey Doc, I’m on the downside of my 80’s almost 90 and I remember the 1930’s and the depression. Back then there were no food stamps, rent subsidies, unemployment insurance, free lunches, Medicaid, etc, etc, etc.. Can remember my brother asking our mother IF we can eat all of this now, or should we keep some of this food for “supper”. When the Works Project Administration (WPA) paid $1.00 a day, and watching men fight to get selected to work. But those were different days. No one had an “entitlement” attitude. No one had any idea of what an entitlement was. We all just tightened our belts and helped each other the best we could. Such is not the case today. I expect chaos to prevail, and I’m frightened. Best of everything good to all.
I believe this is the world bankers plan, as they are running the Federal Reserve behind the scene, to destroy the constitution of the USA. Our constitution stands in the way of one world government, as it gives to much power to its citizens, therefore it must be destroyed by the World Bankers in order have a one world government with the world citizens as debt slaves, with no way to escape. After the world collapse the IMF will come running in as saviors with one world currency and one world government. Thus eleminating competeing sovereign countries.
Agree
Could be
Excellent article. You can sense all around the velocity of money is missing.
Recommend we issue more U.S. bonds while interest rates are low, and start a major infrastructure rebuild in this country; make on-going yearly percentage cuts in government budgets (waste) until spending meets lower GDP percentage targets; offer tax cuts to U.S. companies based on % of new jobs created and also on foreign income reinvested in the U.S.; add an tax on all imported items than can be also be mined, grown or made here in the U.S.
Good idea, John, on tax cuts for jobs created, and foreign money reinvested in the U.S., but remember, WE all pay for ANY tax, including import taxes. Inflated taxes mean inflated prices and costs for all of us. Politicians can easily inflate our cost of living far faster than our incomes inflate, and that means a lower standard of living for us all.
Won’t work. Gov. already buying their own U. S. Bonds.
One way to avoid import taxes is to make more of what we consume here in the United States, including both low and high tech.
Raising tariffs was one of the mistakes Hoover made at the start of the Great Depression. DON’T DO IT. We need to reduce regulations considerably and slash business taxes to encourage companies to come back to the US. That is all it will take to increase jobs. The improvement will really be rapid! Then you can start to dismantle this huge, cumbersome stifling Progressive government.
Dear Sirs,
Your opinion and analysis shock me. Your prediction is that US bull market will continue until 2017 but most people thinks that US will crash anytime. The best is US will stay around 18,000 a little longer.
I follow your market forecast closely and you had warned us the US market will crash in 2010 but it did not.
Let us wait for another year to see your forecast will come true.
Best Regards.
John for prez,or at least Trumps adviser on the economy.You got it right and severely restrict the border like Germany and Austria did until recently
Can’t restrict the border because American and Canadian corporations are buying millions of hectares in south and central american countries to develop resources and are displacing people that have lived there for centuries from their small holdings. That’s why immigrants coming to the US are violent against Americans (US) who won’t accept them here. The immigrants know they are being displaced by American capital and resent not having equal treatment to the personnel of US corporations that have been economically exploiting their countires for years. Whats good for the goos eis good for the gander. Open borders are a reality since NAFTA, it was pre-ordained by the elite. They want access to the farmland, to the water, to the resources under the ground and they will kill to gain access to it. Same as in Iraq (oil), Afghanistan (minerals) etc. best advice is to learn a few different languages and make yourself useful if you want to survive. US government won’t do anyhting for you they are wholly owned by the wealthy.
It seems , smart money wants land, buildings , mines, and manufacturing capabilities. That makes sense, for with twenty Trillion dollars of debt, how can anyone assume that any dollar denominated asset has any relative value.
They come here because it is easier than taking on the corruption, repression and monstrous cartels. As long as our own government continues to piss on our own laws it will continue. Congress has a 14% approval rate but just watch how many the moronic voters will send back to D.C. Again aand again. So, who really is at fault here?
Craig
You sound like you have been listening to Bernie much to often, Do you tell me
of a government or anything else that is wholly owned by the poor.
Trump….haha good luck with that joke.
Really, you think Crooked Hillary or Bernie will be better ? Or possibly the reality is, it doesnt make any difference any more.? Ive come to the conclusion it doesnt matter whos in office, they are all puppets or turn into puppets, not populists ..
Ron, history suggests he does not have it right.
There is an option available that has been used by certain types of politicians, and that option is sweeping, overarching changes to society as a whole through extreme power grabs. Adolph Hitler knew that when people are desperate, you can get away with just about anything under the guise of helping the people. Obama and FDR knew the same and did not hesitate to use their power to reconfigure society.
While I don’t believe that the two we have running are as demented as Hitler, I do believe that they are as arrogant and opportunistic as Obama and FDR and I fear will be permitted by a weak-willed and impotent congress to damage our nation to a greater extent than most of us can imagine.
I appreciate your website and encouragement to people to prepare themselves for good times and bad… I’m afraid that it’s the bad that we have coming. Who knows, maybe people will turn to God for help in their desperation.
A few things come to me,usury needs a second look,tax cuts, elimination of the waste within government along with accountability,and I guess were all headed to the SDR scenario,however what do I know…..
This summary, The Next President’s Biggest Problem, is an excellent overview of many of the potential economic disasters on the horizon. It seems we are in the path of a great storm not so different for many of us on the southeast US coast than a category 4 hurricane bearing down on us. But big difference is this storm is not only focused on the southeast but nation wide and possibly globally. Digging an in ground storm shelter may be helpful but in case of a flood risk of water breaking through the seals is a serious problem. So the best course for action maybe unclear, but perhaps an above ground well provisioned fortress is best.
Martin wrote, “And the Fed under Carter beat them all with a 10.3-point cut in the early 1980s” and “Bill Clinton got a 5.5-point cut during the Tech Wreck of the early 2000s.”
Carter was not the president in the early 1980s (Reagan was) and Bill Clinton was not the president in the early 2000s (George W. Bush was).
Early on Reagan got interest rates up to 17 percent on a five year jumbo CD. People were paying over twenty five percent on industrial loans? Go figure, that somehow ignited the best economic boom in my life time .
Great point Andrew. Those high interest rates recapitalized the American saver. Rates need to be normalized today. But that is tough sledding short term.
You’ve got it John, except that the senseless gridlock at the hill takes sensible solutions off the table. It would not matter whether it is Clinton or Trump, the problem will persist. The only possibility is that with Trump’s ignorance and deception the dems may control the the white house, the senate and the house, thereby limiting the gridlock.
The democrats will do a great job, thier candidate has already murdered an Ambassador and given away thousands of top secret information had Gaddafi Murdered, Their president has no birth certificate and his father fought in WW2 at the age of 8. Elect big foot at least he wont steal or lie about being born in a country that did not exist at the time in a British hospital that never treated foreigners. and also never existed at the time. In my opinion the USA has only one path to take. I thing Donald is the only viable choice, he has rescued many bankrup businesses. The mainstream parties and the Fed have fleeced the USA for 1OO years. Their Woodrow Wilson $3 million bribe mandate was up in 2O13. In fact Kennedy declared them illegal with his Executive order 1111O, He declared the privately owned Federal Fractional Reserve bank illegal and gave the USA a debt free Silver Dollar as the official legal US currency. This officially rendered the Fed an illegal entity. It moved all the debt of the Fed back to the owners and creators of the debt, the British Dutch banking thieves who hijacked US wealth for 1OO years, So the Congress altered the original and murdered Kennedy to avoid losing the power of an official legal currency of the USA.
Why are they still stealing the wealth of the USA
How about a tax policy that increases the income and wealth of the middle class instead of giving it all to the top 1-5% and punishing the middle class as the GOP has done for decades ? Problems solved
Dr. Weiss,
Would you comment on whether or not we would do well to withdraw from GATT and NAFTA and why? Also, would you share your thought on whether we should re-instate the Glass-Steagall Act?
Thank You for Your Consideration,
Mike
US will not withdraw because they need access to cheap resources and compliant labor.
Look around you at the millions of jobs lost and ask yourself how much you love the life you have in America, because if this continues that life will go away and sooner than you think…..
I would rather keep the jobs here, but most big corporations are transnational in outlook and they are holding trilions of profits in tax shelters overseas. The US can’t force our own corporations to return profits to the US (both Mitt Romney and Barack Obama admitted they had offshore accounts in the runup to the 2008 election) and Congress accepts millions in campaign donations from corporate suitors both foreign and domestic. So what leverage do voters really have.
The US has to make free trade treaties all over the globe because if we don’t then the Russians or Chinese will step in and usurp US interests in those areas as they already are doing. The US no longer has sufficient bargaining power or economic clout to call all the shots around the world because our corporations and politicians were to greedy for cheap labor to make their i-phones, television sets and cars and so exported much of the technology that is now being used by foreign economies to compete with US. Thats why we have fewer jobs and a shrinking job base. Any money made overseas is of secondary benefit to our economy because #1 we don’t have the jobs and #2 corporate profits are held overseas.
US is going to have to play a much smarter game if we are going to survive in the 21st century. Don’t know where to begin.
An excellent comment. It’s too bad the USA’s political leaders are still living in the 20th century with their thinking. The world is moving on without us. Now is the time we should be shifting our money from “guns to butter”–from the Defense Department with its out-of-control spending to helping our own citizens survive through single-payee medical care, paid parential leave, enhanced Social Security, and all the other benefits that the citizens of the rest of the world take for granted.
Thanks Martin, great article. I knew your Dad, not personally, but tried to keep up with his periodicals. The governments of the world, seem to always have the wrong people running their countries. I thank GOD we have Weiss research, it’s our security blanket. Stay well
Martin, This is more of the same. I admired you father and “Money and Credit Reports”. I attended his one day seminars, where he commented that “William Mc Martin was an honorable man. I’ve studied and participated in markets for over 50 years, noting the exit strategy several times. The fraudulent choices of Keynesian Monetary Theory places us on the precipice. What will push us over, Social Rebellion, or outright war? There is no human solution, except chaos. Too bad!
Similar to the alcoholic we have tried everything except tough love ( stop drinking—- live within our means). As with the alcoholic that refuse to stop drinking and finds millions of excuses to not adhere to proven cures, our “leadership in Washington” refuses to take responsible action and make effective but hard decisions regarding the economy because in part they fear being booted out of office. As this excellent article suggest , time has run out on the combined leadership and the combined momentum of 30 plus years of irresponsibility on behalf of cowardly leadership( boomers in the main) has arrived like it or not. Debt free will prove to be the best position to be!!!
we have not printed money yet !
we have borrowed it from an entity that really does not have it
If we the united states had printed money , we would have paid off the FEDeral reserve Bank and then jailed them for fraud !
The US Government is controlled by the Fed, which is a completely independent agency. I saw Greenspan on youtube and he said they answer to “no one”! They could have reined in government spending easily if they wanted to because they and no one else control the money supply and interest rates. Didn’t you see the slick way they saddled American taxpayers with trillions of dollars of debt. The US is their tax farm. Banks have always controlled governments, they are two different types types of personalities. The fed is interconnected with other central banks around the world through agencies like the the International Monetary Fund and the Bank of International Settlements and they are the shot callers, not the President or Congress. It’s the Golden Rule – “Who has the gold makes the rules”.
Trump ignorant of the Commercial Real Estate sector? Really? I think not.
Trump ignorant of world wide currency manipulations? You must have missed his speeches.
Can Trump actually manage the Financial Collapse engineered by the Fed?
Short of declaring the Fed Reserve Debt Notes no longer legal tender, and reverting to US Treasury Silver-Gold Certificates payable on demand, probably not. Rotten ships sink, no amount of pumping keeps them afloat. The Fed is rotten to the core.
US elections are a shell game. Either way you will get an establishment candidate.
I believe the Fed will resort to negative interest rates as a precursor to confiscation of IRAs and cash in bank savings accounts. The government is not our friend…..they are supposed to protect us first and foremost. Nothing happens that is not planned.
It is not possible to overstate the economic ignorance of the American people. Our leaders reflect that ignorance, and it is the result of increasing wealth concentration. When we were a nation of small businesses, there was a level of economic understanding among small business owners. As fewer owned increasing equity, we saw the creation of the “multi-national” company, the shareholders and executives who don’t give a crap about America, only money. And our preoccupation with retirement (getting paid for doing nothing) and various other free lunch programs have made us the greatest debtor nation in history. Find a safe place to grow your own food. When our ability to borrow ends, the folks who can’t support themselves will be coming to your house for food.
The next President will have a 1.2T dollar Albatross around their neck. This is the worthless spending on defense and “securityâ€. It provides a few very expensive jobs but puts no goods or services on the shelf. The only thing we get from this half of the non-Social Security/Medicare part of the budget is protection from our own inane Foreign Policies. Yes, in this respect Reagan was correct in that Government is the problem. Obama lacked the courage to change our jingoistic policies and used the blood of our finest and our treasure to cover his political butt. Note his advisories would have crucified him had he acted so this is a bipartisan FUBAR. No National politician has dared to oppose the MIC other than Ron Paul who was pilloried by the Republican establishment and Dennis Kucinich who was blackballed by the corporate media.
The next President will start off with an impotent Fed and a chronic $700 billion deficit. We have never entered a recession with no bullets to fire and practically disarmed both fiscally and monetarily. I predict the next President will at best treat our economic cancer with band aids and aspirin or worse will pull all the wrong levers and push all the wrong buttons.
Adversaries not advisories, oops.
Every four years, Americans get swept up in political promises of hope and change, reform, shaking things up, taking the country back, making America great again. Then we are disillusioned for another four years. Now, this time around, many people seem disillusioned even before the general election campaign has begun. The slogans are ringing hollow, even for many partisan voters.
Is hope for America just one—or two—elections away?
The next move is up to the next president who looks at the economy through objective instead of ideological eyes. Cut the corporate tax to a top rate of 20%, offer a special deal on one time repatriated funds and then submit legislation to fix the problem with complete overseas credited tax paid with a further reduction for rates paid to other countries that exceed our rates. Finally, take all the regulations affecting business; set them in a pile, pour gasoline on them, light fire, put out the fire when half have been burned.
I’m always amused at the animosity shown toward “regulations”. Let’s start by removing all regulations for automobile safety. No seat belts, airbags or padded dashes and replace the safety glass with window panes. Next scrap the age limit for buying alcohol and the requirement for a driver’s license. Then remove the stripes, traffic lights and stop signs from the roads. Finally give the car keys to your kids, twenty bucks for beer and tell them to have a good time.
And your AMusement at that animosity leaves me BEmused at your clear decision not to consider that, application of regulations using common sense IS generally accepted. The animosity factor is reserved strictly for overwhelmingly intense regulations that simply and arrogantly demonstrate that bureaucrats are a force to be reckoned with….thereby leaving those who are foolishly regulated to digest what, regarding efficiency and cost, is often substantially indigestible. The small businessman’s lament!
Of course regulations should be effective my over the top presentation was to get your attention. The reason we have regulations is because people CHEAT. It is the same reason we have laws and police. Regulations protect honest, moral businessmen from the dishonest and unsavory. They make for an orderly society, it’s why we paint the stripes on the roads.
You have just described the 1950’s–the best decade of my long life. The last 8 years = the worst.
You’re in luck! If you yearn for the 1950s just move to China and enjoy their air and water. Get a job in a factory with no labor, safety or environmental regulations. Better yet move to Bangladesh or Vietnam!
Well said Mike…. And TRUE!…..
I feel very fortunate to have grown up in the ’50s and early ’60s, when these were the general norms:
(1) Romance was sweet and popular
(2) The true nature of a woman was respected
(3) Families were strong and intact
(4) God was publicly revered
(5) People were patriotic and loved their country
(6) People were civil and polite and respectful
(7) People were good workers and contributors
It was a great time to be alive.
PS–I had a job with no labor, safety or environmental regulations—life was good!
I totally agree with Donald Link
America coulld be brought back to life by simply making all imported products cost the same or more from former American companies that deserted this country. In other words, a level playing field would work wonders!!!
Dr. Weiss,
I read all the Weiss letters and more. The more points of view one has, both pro and con, the better equipped you are to make decisions.
From my limited perspective, all I can see is a world wide reset on the horizon. Those in power will do any and everything they can to prevent it to protect their position. The rest of us will be left to take the leftovers.
There is no safe for the average person. All currencies can be converted to the benefit of those in power, all property can be confiscated for their benefit and they can use the state to impose their will on the people.
This has all happened before as the ruling class get dumber and dumber whiled thinking that, “It will work this time because we are smarter than they were”.
Except Bob that this time around each and every prole out there is connected….millions, and millions and uncontrollable millions of us, all scheming and all resolved to disregard Big Brother’s bellicose threats which, ultimately, because of the magnitude of the civil disobedience, leaves the King completely in the ‘altogether’…with only empty hands to cover his exposure.
Hi Martin,
Excellent article.Remember the old expression–“neither a lender or a a borrower be” .Well it still holds true in this day and age.Your Larry E. is in full agreement with your thinking.Oboy oboy oboy,batten down the hatches.
Denis
When the Democrats and the Republicans both fail us, maybe it is time to look elsewhere. I can’t see the sense in electing the same sort of political people who have failed us so miserably in the past. Gary Johnson (Libertarian) interests me more and more, after reading his Wikipedia bio. He is rather a self-made, can-do person, who built a successful large business from scratch. As governor of New Mexico, he ran a common sense kind of administration that vetoed tax increases and state spending bills while providing needed services, and served his two full term limits. Not the sort of person beloved of the established media. A little common sense in Washington would certainly be a change for the better.
And like Reagan before him, Trump will surround himself with all the old criminals like Bennett. Giuliani, and Newt. These guys have not had an original thought in their life times and will burden a Trump presidency to the point of failure.
There ARE plenty of bright souls out there that can help solve these problems, But I doubt any will ever see appointment to ANY position where they could help.
First, eliminate all personal income taxes; Second, tax all companies & corporations according to their income and expenses; such as salaries to every level of employee including owners, and R & D& Adv. Third, terminate the Federal Reserve Bank Act of 1913. Fourth, the establish of the Department of Economic Activity and Money Flow, advisers to the President & House of Representatives.
So no income tax to anyone except business owners. Now there is a winning solution! Not.
Additionally, doing as President Eisenhower did, tell the people to spend a little more to help the economy recovery.
Great article but I have one historical point I would like to correct.
I recall that Carter lost the election in 1980 and that interest rates peaked in 1981-82 time frame. The 10.3 percent point drop in interest rates, you incorrectly credited him with having influenced and benefited from, would have to have accrued to his predecessor Ronald Regan under whom they actually occurred under.
In fact any fair reading of history would at least partially credit Carter’s loss of the presidency to his nomination of Paul Volker as FED chairman as well as Carters willingness to take the heat for the largest increases in interest rates in history during his administration as the country was dealing with runaway inflation caused in no small part by the baby boom generation hitting the front door of maximum home buying and related increases in debt-leveraged incomes being put into circulation.
Robert, you sound like Mike posing as Eagle495……… :(
Nope Bonnie,
There is just another here that knows his economic U.S. history…. If you don’t believe it try looking in Google or Wikipedia or any other college level economic history text of the 1900’s……
Another truth Bonnie: If you had invested $10,000 in ONLY Democratic Administrations from 1929 to 2012 it would have grown to $300,000. Doing the same in ONLY Republican Administrations it would have only grown to $11,000… There were about the same number of years of both administrations in that study period….. Did you know that the two Stock Market Crashes and Depressions in the last 100 years BOTH happened during Republican Administrations with Republican Majority Congresses after years of Republican domination?…
Look it up: An Article based on that study is called “Poor Dumb Rich People”
And eagle495 or should i say mike s he got this information from the huffinton post ( his own words) just admit it your information is completely biased without any truths its just made up fabricated lies but what can anyone expect from the huffington post if eagle495 knew anything he would have realized there was 2 depressions in the 1930s the latter happened in 1937 and that was the bad one it lasted until the end of 1945 and that was FDRs fault
Eagle is responsible for his own views as am I. Most of my information was obtained by living through the times I reference. I am an equal opportunity chastiser but there is simply much more material to berate on the right. I was kicked off the liberal Daily Kos for pointing out the failings of their gun control arguments. You are correct about the downturn in 1937/38, FDR accepted his advisers recommendations to allow many New Deal programs to lapse and that was a mistake.
Oh, c’mon! There is a simple solution.
The next president will start WW3 to divert the issue.
There is China to play with, there is N Korea to blame, there is Russia to fight with and also there is IS to game.
Som be prepared.
If the next President gives a crap about the 98% he or she will cancel NAFTA and GATT and our country will return to the greatness it knew before those Republican initiatives sent millions of Middle Class jobs overseas…… And with the cancellation of GATT, the treat of China will go away as they will have not the money to keep building their military…
It really is that simple…..
There will be another Boom in the Russian Economy because that’s where the next Soccer World Cup is Being held. There was a boom in Greece after they held the Olympics. If you want another Boom in Greece, get them to host the Olympics in 2020 or the European Soccer Championships in 2020.
Just read something interesting about Congress. It seems years ago Congress used to pass over a 1,000 pieces of legislation in one term but not so much now. They are struggling to pass 220 pieces this term so why is that you ask? Simple the rest of the time is spent being a bag man for the Republican party.
cut mortgage rate to 1/2 or 1% for all existing mortgage.
cut all bank executive income and bonus by 75%
cut all workers salary by 50%
limit the power of all union while the economy is in crisis.
cut all property tax by 50%
forfeit all the billionnaire bank balance by 50% and let the government take that money to support the loewer and middle class.
all hose that have benefitted fron the past 25 years economic expansion should return the money to support the failing economy and avoid a greater crises such as revolt, putting every one on the street, forfeiting all all their assete.
in one word cut, cut cut all that brought us there and start all over, no exception for no one and the filthy wealthy that benefited from the politician econom,ic favour pay the greater share of the burden.
And now for something completely different. Tops don’t occur when everyone is pessimistic, like now. Right now the return on $1,000 is the same as $1,000,000, which is virtually nothing. That is ridiculous. Invest in U.S. Treasuries and double your money in 38 years? Zero interest rates are a match looking for a fuse. Sane people want a return on their capital. The places to do this are The Stock Market, Commodities, and Real Estate. All this Harry Dent demographic nonsense about baby boomers taking their $47 trillion home and sitting on it is wrong. No return in bonds and rampant pessimism are a formula for an explosion in asset prices. It has already started with oil and gold but no one seems to want to notice. All the big investors preach doom and gloom because they are short. They will lose their shirts and those with guts stand to make a fortune. Jim
it would be very beneficial for society if prison time
was not a PICNIC!!! prisoners have a better life than
many law abiding citizens. there is no FEAR of going to jail.
that needs to change.
Perpetual negativism simply follows the rule: “What you think is what you get” The Universe delivers the picture you give it, and it doesn’t judge whether it’s good or bad–it just gives what you focus on. Give us some positive picture possibilities Mr. Weiss—that’s what miracles are made of —what the US grew from.
I will agree the FED by itself has no more weapons but the big central banks along with the IMF & World Bank do have some tactics to stimulate the economy via inflating away debt. The march for a Corporatocracy ( new world order) goes on with a slower cadence for now but this could pick up by next fall.
I remember as a child when times where hard and thieves were thick, you had the upper hand only if you had a loaded gun and a reserve of bullets. Raise the flag and show your armor. That will keep the stupids away and will save you some ammo for the real wolves.
https://research.stlouisfed.org/fred2/graph/?g=2i1D
I have one simple request to all Money and Markets advisors and contributors: can you please attempt to avoid rabid political commentary and get your facts straight? The president who signed TARP was George W. Bush (the same president who created this country’s massive debt increase when he engaged us in 2 overseas wars, contrary to statements i saw a few weeks ago); and the above chart shows the federal funds rate from the date Lehman declared bankruptcy to the date Obama took office –you will notice the drop from 5+% to .16% occurred months before Obama took office (contrary to the statement above). If we leave political rabidness out of the commentary, we all might have a clearer picture of the facts as they actually occurred–thank you all.