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Trump's Economic & Winning Thread

solarion

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Fed: “We don’t have a really good understanding of why it’s been so difficult to get inflation back up”…
Posted on January 4, 2020 by sundance

A good day for a MAGAnomic pause and reminder…

In 2015 we discussed candidate Trump’s economic positions and how they would impact the economy. CTH anticipated that MAGAnomics would be reversing three decades of federal reserve monetary policy. After about a year of analysis and discussion, in 2016 CTH presented a theory: “A new Dimension in Modern Economics“.



CTH shared a possibility of what could happen if Trump Economic Policy was shifted to favor Main St. over Wall St.

One aspect we presented was how Federal Reserve monetary policy would be oddly disconnected from its ability to influence inflation… Today:
SAN DIEGO (Reuters) – The Federal Reserve could find itself fighting too-low inflation for years to come, San Francisco Federal Reserve President Mary Daly said on Friday, and may need a new policy framework to lift inflation back up to the Fed’s 2% goal.​
“We don’t have a really good understanding of why it’s been so difficult to get inflation back up,” Daly said at the annual American Economics Association meeting in San Diego.​

But with global growth slowing and the populations of most advanced economies aging, Daly said, “this new ‘fighting inflation from below’ is going to be with us, I would argue, for a longer period of time than just a few years.” (read more)​
While the Federal Reserve is perplexed, the underlying reason for monetary policy to be incapable of impacting the rate of inflation is not too complex when you think about the focus of federal economic policy reversing in the era of Trump.

For 30-years +/- U.S. economic policy was geared toward Wall Street. Corporations looked to maximize profits, manufacturing was shipped overseas, jobs were lost and Main Street suffered. The Fed monetary policy followed the economic influences of a Wall Street created outcome. U.S. multinationals benefited; U.S. main street companies did not.

A Wall St. economic engine was created. The FED policy followed the new engine. The two entirely different economic engines then detached:
  • The Wall Street economy, an engine of sorts, is a “service driven” economy, with manufacturing of cheap imported goods done overseas.
  • The Main Street economy, again another engine, is a more balanced “manufacturing” economy; with a balance of imports and finished goods produced in the USA.
Bush, Clinton-Clinton, Bush-Bush and Obama-Obama terms focused on the Wall Street economy. However, Donald Trump focuses on the Main Street economy. In 2016, immediately after the election, we wrote about what we might expect to see happen:
2016 […] Understanding the distance between the real Main Street economic engine and the false Wall Street economic engine will help all of us to understand the scope of an upcoming economic lag; which, rather remarkably I would add, is a very interesting dynamic.​
Think about these engines doing a turn about and beginning a rapid reverse. GDP can, and in my opinion, will, expand quickly. However, any interest rate hikes (monetary policy) intended to cool down that expansion -fearful of inflation- will take a long time to traverse the divide.​

Additionally, inflation on durable goods will be insignificant – even as international trade agreements are renegotiated. Why? Simply because the originating nations of those products are going to go through the same type of economic detachment described above.​
Those global manufacturing economies will first respond to any increases in export costs (tariffs etc.), by driving their own productivity higher as an initial offset, in the same manner American workers went through in the past two decades. The manufacturing enterprise and the financial sector remain focused on the pricing.​

♦ Inflation on imported durable goods sold in America, while necessary, will ultimately be minimal during this initial period; and expand more significantly as time progresses and off-shored manufacturing finds less and less ways to be productive. Over time, durable good prices will increase – but it will come much later.​
♦ Inflation on domestic consumable goods ‘may‘ indeed rise at a faster pace. However, it can be expected that U.S. wage rates will respond faster, naturally faster, than any monetary policy influence because inflation on fast-turn consumable goods becomes re-coupled to the ability of wage rates to afford them.​

The fiscal policy impact lag, caused by the distance between federal fiscal action and the domestic Main Street economy, will now work in our favor. That is, in favor of the middle-class. (full outline)
What we are seeing in 2019 is precisely this outcome.



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https://theconservativetreehouse.co...fficult-to-get-inflation-back-up/#more-180074
Interesting article is interesting.

You have to know it's driving fed governors bonkers trying to get back to their "magic" 2% cumulative inflation rate THEFT and failing miserably. I predict they'll get it done eventually, but they'll have to really drop the hammer on monetary policy.
 

Joe King

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They've been trying to push on a string for how many years now?

When it finally does kick in, I'm thinkin' that they'll end up with far more inflation than they thought they wanted.
 

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PRAYER IN PUBLIC SCHOOLS
President Trump Champions Freedom of Worship
 

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Not a winning but funny.
 

SongSungAU

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Watch the full CNBC interview with U.S. President Donald Trump from Davos (19 min 40 sec):


Published on Jan 22, 2020 by CNBC Television​
President Donald Trump returned to the World Economic Forum in Davos, Switzerland, touting sustained growth in the American economy as well as his his recent trade agreements with Mexico and Canada, and China.​
President Donald Trump told CNBC on Wednesday that U.S. economic growth would have been closer to 4% if it weren’t for the lingering effect of Federal Reserve rate hikes.​
“That was a big blip that should not have taken place. It should not have happened. But it’s one of those things. But we had Boeing. We had the big strike with General Motors. We had things happen that are very unusual to happen,” Trump told CNBC’s Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland.​
The president also suggested that the stock market would be even higher than its already record-setting highs if the Fed hadn’t raised rates so quickly before cutting them three times during 2019.​
“Now, with all of that, had we not done the big raise on interest, I think we would have been close to 4%,” Trump said of the U.S. gross domestic product. “And I – I could see 5,000 to 10,000 points more on the Dow. But that was a killer when they raised the rate. It was just a big mistake.”​
The president has repeatedly taken the Fed and its chair, Jerome Powell, to task for raising rates too quickly, in his view. Trump nominated Powell to the role in November 2017, and the Fed raised rates four times in 2018.​
The president’s remarks Wednesday echoed those his top economic advisor Larry Kudlow made to CNBC on Tuesday, when he predicted 3% growth in U.S. GDP in 2020.​
“This is a long cycle, and what you’ve got here in the Trump years is essentially a mini upcycle,” Kudlow said Tuesday. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4%, then the Fed tightened.”​
Manufacturing and trade data released this month suggested the American economy ended 2019 on a strong note. The economy is expected to grow more than 2% in the fourth quarter. That would represent a slowdown from the 2.9% increase in 2018, and 2% growth would still suggest the decade-old expansion is set to continue into this pivotal election year.​
The Trump interview came hours after the first full day of impeachment proceedings wrapped up in the Senate and a day after Trump gave a speech to the World Economic Forum in which he boasted about U.S. economic gains under his watch.​
Several observers said the address sounded like a campaign speech in his 2020 reelection bid.​
From a policy standpoint, Trump stood firm on his use of tariffs in trade negotiations, particularly as his administration looks to follow its so-called phase one trade deal with China with a second-phase pact. This stance has made business leaders in Davos skeptical that the two nations would reach an agreement before Trump’s first term is up in a year.​
 

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SA200122.jpg
 

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ET200123.jpg
 

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Dr. Jeffress on the Lou Dobbs program:

Dr. Robert Jeffress: Trump Becomes First President To Speak At March For Life Rally | Jan 24, 2020 (4 min 43 sec):​
Published on Jan 24, 2020 by First Baptist Dallas​
 

Zed

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They've been trying to push on a string for how many years now?

When it finally does kick in, I'm thinkin' that they'll end up with far more inflation than they thought they wanted.
They have already done the deed, eventually we will feel what has happened to date and no doubt they will add more before we are done. Sooner or later this hits main street, just about the time interest rates turn up in earnest in my estimation. This will be a part of a debt bear market and like all bears they move faster than you anticipate.

JMO
 

SongSungAU

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newmisty

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Joe King

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From your second link:

"It's safe to say he (Stockman) is not impressed by President Donald Trump."
If so, then he'll be even less impressed with any of those looking to succeed Trump. All of them are advocating doing even worse. So if you get your way krag and Trump gets removed or loses the election, what we get next will make Trump look like RP in comparison.
Be careful what you wish for.
 

SongSungAU

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TM200129.jpg


MG200129.jpg
 

SongSungAU

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newmisty

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Despite his flaws Trump is a genuine human being.

 

the_shootist

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Didn't notice anyone talking about Superbowl commercials today...which is unusual. Wonder why?
Because noone watches them any more. I myself started watching the SB at 9:30pm and fast forward through all the commercials. I saw the entire game in just under an hour....every play and not a single commercial.
 

SongSungAU

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Great line regarding Pelosi: You can tear up his speech, but you can’t tear up his accomplishments.

Graham on AOC's SOTU boycott, Pelosi ripping Trump's speech (4 min 42 sec):


Published on Feb 5, 2020 by Fox News​
 

SongSungAU

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