Monday, December 12, 2016

Elites and Media will blame any future economic problems on Donald Trump

Before Brexit the elites and political class warned it would be a disaster. It has been a disaster for the Pound Sterling but economically not that much has changed. And similarly the elite in America, both the media, democrats and republicans warned that a Trump victory would be a disaster for the economy. Well so far the stock market has made a new high, it remains to be seen how the economy does. But in this context what will happen is if the economy goes into recession in the next two years, the media will blame Mr Trump. If the economy of Britain goes down, the media will blame it on Brexit.

The recovery in US has been in an expansion admittedly of poor quality and of poor growth but its nevertheless been in expansionary mode since June 2009. So in other words next year will be eight years into an economic expansion which is by historical standards is twice as long as the typical expansion in America. So a recession is overdue regardless. And I think the recession is going to be triggered by a rise of interest rates. Basically interest rates began to rise in July of this year, and the bond market was weak before Trump was elected and would have been weak if he had lost the elections to Hillary Clinton.