Great Recession

Donald Trump Inheriting A ‘Poisoned Chalice’?

I’ve had this suspicion for some time now that whoever won the 2016 U.S. presidential election is very likely inheriting a “poisoned chalice.”

When I launched Boom2Bust.com, “The Most Hated Blog On Wall Street,” on Memorial Day weekend 2007, I started warning readers of a coming U.S. financial collapse.

After moving on to Survival And Prosperity in 2010, I came to believe the economy/larger financial system had already entered a long, drawn-out descent before the eventual crash.

That downward trajectory would be punctuated by crises like what reared its ugly head in the autumn of 2008.

Financial types were quick to label the recession at the end of last decade as the “Great Recession.”

This “nattering nabob of negativity” thinks it’s only a matter of time before a “Greater Recession” strikes, fueled by Washington and the Fed “kicking the can down the road” and having too few bullets left when that “road” inevitably runs out.

President-elect Trump is also aware of the possibility of such economic upheaval.

Bob Woodward and Robert Costa reported on The Washington Post website back on April 2, 2016:

Donald Trump said in an interview that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market, embracing a distinctly gloomy view of the economy that counters mainstream economic forecasts…

Trump has for months contended that the U.S. economy is in trouble because of what he sees as an overvalued stock market, but his view has grown more pessimistic of late and he is now bearish on investing, to the point of warning Americans against doing so.

“I think we’re sitting on an economic bubble. A financial bubble,” Trump said. He made clear that he was not specifying a sector of the economy but the economy at large and asserted that more bullish forecasts were based on skewed employment numbers and an inflated stock market.

“First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” Trump said. “That was a number that was devised, statistically devised to make politicians- and, in particular, presidents — look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”

(Editor’s note: Bold added for emphasis)

Yet Trump, as President-elect of the United States, chooses to accept the potential “poisoned chalice,” from which he might be forced to drink from during his tenure in the Oval Office as the current economic expansion grows long in the tooth.

Consider the following from Jeffrey Sparshott in The Wall Street Journal’s Real Time Economics blog this morning:

Donald Trump is poised to inherit one of the longest-lived economic expansions since the World War II era. Barring any sudden shock or sudden acceleration, the president-elect will also take office during the weakest

The economy has been growing for more than seven years, ranking the expansion the fourth-longest since 1949 (when quarterly data became available). If economic expansion continues through Mr. Trump’s first term, it will be the longest.

While gross domestic product, a broad measure of economic of output, is advancing, it’s been at the slowest rate on record for an expansion

(Editor’s note: Bold added for emphasis)

I’d like to think Donald Trump and the Republicans could turn this ship around and avert economic disaster.

I, for one, would only be too happy to be proven wrong about my prediction of a “Greater Recession” and eventual collapse.

But I fear the damage may already be done.

So much so that the incoming White House might want to level with the American people about what might be in store for them from an economic standpoint.

Otherwise, the public will have less of a fighting chance of weathering the financial storm should it hit.

Not to mention opponents of a Trump administration will try hard to pin the blame on them for a painful event previous administrations played a big part in creating.

One need only look at Illinois where Republican Governor Bruce Rauner (only 22 months in office) is facing the same baseless charges for decades of mismanagement perpetrated by those across the political aisle.

President-elect Trump has his work cut out for him as the economy is concerned. The billionaire businessman seems to be up for the challenge, and America will know soon enough if he can pull off yet another amazing feat.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Costa, Robert and Woodward, Bob. “In a revealing interview, Trump predicts a ‘massive recession’ but intends to eliminate the national debt in 8 years.” The Washington Post. 2 Apr. 2016. (https://www.washingtonpost.com/politics/in-turmoil-or-triumph-donald-trump-stands-alone/2016/04/02/8c0619b6-f8d6-11e5-a3ce-f06b5ba21f33_story.html?hpid=hp_hp-top-table-main_trumppresidency-7pm%3Ahomepage%2Fstory). 11 Nov. 2016.

Sparshott, Jeffrey. “The U.S. Economy President Donald Trump Will Inherit, in 11 Charts.” Real Time Economics. 11 Nov. 2016. (http://blogs.wsj.com/economics/2016/11/11/the-u-s-economy-president-donald-trump-will-inherit-in-11-charts/). 11 Nov. 2016.

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Signs Of The Time, Part 100

A milestone has been reached with the “Signs Of The Time” series of posts.

I wasn’t sure what material I’d use for post number 100, when manna from Heaven suddenly appeared in the form of a headline on the home page of my Internet service provider:

Why people won’t say the economy is booming

By most measures, the economy is doing great. So, why are people reluctant to admit it?

Obama: ‘We went through a really scary time’

In the accompanying piece, Sam Ro, managing editor at Yahoo! Finance, wrote Sunday:

By most measures, the economy is doing great. The US labor market is creating around 200,000 jobs a month, which has brought the unemployment rate tumbling to 5%. Meanwhile, home prices are up and stock prices (GSPC) are near all-time highs.

So, why are there so many people so reluctant to acknowledge how good things are today?

One word: trauma.

“Some people are still recovering from the trauma of what happened in 2007-2008,” President Barack Obama said in an interview with Yahoo Finance’s Nicole Sinclair. “You know, we went through a really scary time.”

Trauma has the ability to distort how we perceive our present reality…

(Editor’s note: Bold added for emphasis)

Just when you thought you’ve heard everything, right?

It gets better. Ro continued:

Consider the joy that comes from jumping on a trampoline or the thrill one gets from speeding downhill on a bicycle. For many folks, the unexpected and painful reality of a nasty spill and a couple of fractured bones will forever take away the bliss that once came from those activities. The trampoline and bicycle will continue to offer the same experience, but the trauma can be so intense that it can force many to keep their feet on the ground.

Losing your job, getting evicted from your home, and watching the value of your retirement savings crash can be deeply distressing. And so even when you get a new job, move into a new home, and recoup all of your investment losses, that new persistent feeling of uncertainty that followed the traumatic will discount everything you have…

Any readers ever see that iconic sports film The Natural, starring Robert Redford? Is it just me, or does all this kind of remind you of that part in the movie where the club hires a shrink to talk to the players when everything is going wrong?


“Losing is a disease”
YouTube Video

No, not that bit where the ballplayer gets hit in the (g)nards. But that “losing is a disease” speech.

And just like Roy Hobbs rolled his eyes and walked out of the locker room, I wouldn’t blame any of you for moving on from this post after reading that stuff about “trauma.”

“Trauma has the ability to distort how we perceive our present reality”

I suspect the “present reality” is crystal-clear for a growing number of Americans- trauma not needed.

And in more than a few instances, their economic “reality” definitely does not match what’s being peddled by Washington and its allies in the mainstream media these days.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Ro, Sam. “Obama uttered a single word that explains so much about America today.” Yahoo! News. 17 Apr. 2016. (https://www.yahoo.com/news/obama-us-economy-americans-recovering-from-trauma-175254482.html). 18 Apr. 2016.

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Project Prepper, Part 45: Top 3 Threat Priorities

“As a result of my research and this blog, I’m now aware of the myriad of man-made and naturally-occurring threats to my life and lifestyle (and those of my loved ones), and think it’s probably wise to acquaint myself more with ‘prepping’ via a sustained ‘hands-on’ program of learning and doing, which I’ll call ‘Project Prepper.’

Through a series of posts on this blog which I suspect should last for quite some time (years?), I’ll be able to share my preparedness experiences with you…”

Survival And Prosperity, “Project Prepper, Part 1: It Begins,” October 24, 2012

This week’s “Project Prepper” post is going to be a little different. While I’m currently working on a number of projects related to fulfilling seven “innate survival needs” (hat tip Jack Spirko @ The Survival Podcast):

1. Physical Security
2. Financial Security
3. Water
4. Food
5. Sanitation and Health
6. Energy
7. Shelter

Today I’m going to talk about threat priorities. As a forty-something homeowner residing with my girlfriend in the suburbs of Chicago, Illinois, in 2016, “I’m now aware of the myriad of man-made and naturally-occurring threats to my life and lifestyle (and those of my loved ones).” Regular readers of Survival And Prosperity know I blog about them frequently. But from my vantage point, here are the “top 3” I’m mostly concerned about:

1. Severe Weather
2. Financial Crisis
3. Terrorism

Concerning severe weather, here in the Chicagoland area residents have to contend with spring and summer storms that can consist of high winds, torrential rain, flooding, and tornadoes. Winter can bring along with it ice storms (not too often), significant snowfall/blizzards, and brutally-cold temperatures. Consequently, structural damage, utility outages, hazardous travel conditions, and other threats to life and property accompany such events.

Case in point, prior to my girlfriend and I moving into our house in 2013, a large part of the Chicago metro area suffered significant damage from a “derecho” (widespread, long-lived wind storm) event that left many area homeowners without electricity for several days. A real nuisance for most of those affected, but potentially deadly to those with serious health issues- like my elderly father. And in case readers think I’m talking about those far-off “suburbs” of Chicago here (I remember one real estate agent referring to Rochelle- approximately 80 miles west of Chicago- as a “western suburb” during the housing boom last decade), these extended outages were taking place in near “North Shore” enclaves. I remember watching one furious Northbrook homeowner being interviewed on the local televised news, saying how he had been without power for a number of days and couldn’t understand why it hadn’t been restored yet considering the high taxes he paid to live in such a nice area. Anyway, severe weather tops the list for me. Not as “sexy”- as some would say- as preparing for the “Zombie apocalypse,” but oh well.

Financial crisis. Regular readers of Survival And Prosperity and its predecessor know I’ve been on the lookout for coming “tough times” for some years now. From this blog’s “About” page:

Back in 2004 when SP’s creator/editor Christopher Hill was surveying the economic and investment landscape in support of his own investing activities, he concluded from his own research that the United States was heading towards a financial crash. Deciding that this was something other Americans might want to know about, Mr. Hill launched the independent financial blog Boom2Bust.com, “The Most Hated Blog on Wall Street,” on Memorial Day Weekend 2007 with the purpose of warning and educating others about the approaching U.S. economic crash. He has been credited with calling last decade’s housing bubble and subsequent bust, the 2008 global economic crisis, and the “Great Recession” as a result of his work on this project. Chris wrote over 1,500 posts on Boom2Bust.com during its nearly three-year run, with many of these picked up and republished on the web sites of The Wall Street Journal, Fox Business, Fox News, Reuters, USA Today, the Chicago Sun-Times group, the Austin-American Statesman, the Palm Beach Post, and the West Orlando News, among other media outlets. Chris was also interviewed for a May 2009 MSNBC.com article as a result of his work with the blog.

Since Memorial Day Weekend 2007, I’ve stood by and watched as the bursting of the U.S. housing bubble and subprime mortgage crisis was quickly followed by carnage on Wall Street in the autumn of 2008 and a “Great Recession.” I also observed how the Washington politicians and the Fed responded by “papering up” the mess with massive government and central bank intervention. But as everyone knows, you can only “kick the can down the road” so far. And my concern is that the road is rapidly coming to an end. Visit this blog often enough and you might get that sense as well.

Consequently, I’ve come to believe that the U.S. financial crash I still see headed our way won’t be like an airplane that suffers a sudden, catastrophic failure and plummets back to Earth like a rock. Rather, taking into account the abilities of the federal government and central bank to keep the aircraft aloft for quite some time, the crash may be more akin to a slow- yet-unavoidable descent into the ground. At which point, Americans might be left pondering what had happened to them, just like Argentines did after their economy crapped out in the early 2000s after prosperous times.

Making matters worse is the fact that I still reside in Cook County and Illinois, whose financial troubles are well-publicized. While I’ve left Chicago, I still haven’t made Wisconsin my permanent home address.

When the “balloon goes up” locally and nationally, I suspect everyday living is going to get particularly gritty around these parts.

As terrorism is concerned, post-9/11 I found myself working in the public safety field. As part of my duties at a local fire department, I catalogued potential terrorist targets in the area in the hunt for money to upgrade the agency’s response capabilities. It was my belief that the threat was real then, and it remains so today. Even more so in 2016, as U.S. border security is quite suspect at a time when those who would wish to harm the “homeland” continually make their operational capabilities and future desires for wreaking death and destruction known.


“Border Patrol Admits US Citizenship Doesn’t Matter”
YouTube Video

Like I’ve repeatedly said before on this blog, I believe it’s only a matter of time before the United States suffers terror attacks possibly resembling what occurred in Beslan (Russia) in 2004, Mumbai (India) in 2008, and more recently in Paris and Brussels. And a terrorist strike rivaling or even surpassing the carnage of September 11, 2011, is not out of the question as far as I’m concerned. New jihadists continue to replace their fallen predecessors in this “War on Terror,” and the religious duty of killing “infidels” remains the same. On May 6, 2011, I wrote:

In 2005, Dr. Paul L. Williams, a journalist and author, published the book The Al-Qaeda Connection, in which he discussed plans for a future nuclear terrorist strike, dubbed “American Hiroshima.” He wrote:

Bin Laden asserts that he must kill four million Americans- two million of whom must be children- in order to achieve parity for a litany of “wrongs” committed against the Muslim people by the United States of America. The “wrongs” include the establishment and occupation of military bases between the holy cities of Mecca and Medina in Saudi Arabia, the support of Israel and the suppression of the Palestinian people, the Persian Gulf War and the subsequent economic sanctions, and the invasions of Somalia, Afghanistan, and Iraq…

(Editor’s note: Bold added for emphasis)

These days, the Islamic State has stolen the headlines from Al-Qaeda and other Muslim extremists. But such religious fanaticism as a whole remains a top concern for me.

Severe weather, financial crisis, and terrorism are natural and man-made threats that register the most on my radar. But this doesn’t mean I discount other potential dangers to life and property either (pandemic, severe space weather, and war would probably be the next three on the list). As such, an “all-hazards” approach is emphasized in my “Project Prepper” activities.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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The People Who Predicted The Global Financial Crisis

“Vice President Dick Cheney says that his boss, President George W. Bush, has no need to apologize to the American people for not doing more to head off the financial calamity, saying no one saw the crisis coming.

During an interview Thursday with The Associated Press in his West Wing office, Cheney defended the administration’s performance on an economy that is growing weaker daily and which recently collapsed in spectacular fashion. Cheney said that ‘nobody anywhere was smart enough to figure it out.’

-Associated Press, January 8, 2009

(Editor’s note: Bold added for emphasis)

It’s Monday, and since I’m not adding anything new from the “crash prophets”- Marc Faber, Jeremy Grantham, Jim Rogers, and Peter Schiff- I thought I’d take Survival And Prosperity readers for a stroll down memory lane.

I recently stumbled across a page on the Investor Home website entitled “Who Predicted The Global Financial Crisis?” Gary Karz wrote:

In the years since the Global Financial Crisis exploded on the scene, there have been a number of articles and initiatives documenting the individuals that publicly predicted the crisis and arguably deserve credit for having sounded the alarm. This page summarizes those efforts and links to those sources (and I expect to update it over time as more information and research becomes available). While plenty of foreign leaders and professional doomsayers have long predicted the collapse of the US economy, to the extent possible it should be useful to differentiate them from those that legitimately warned about a financial crisis or critical elements of it based on some logical analysis that appears to have merit after the fact. I believe a large percentage of investors and home buyers were exposed to at least some credible warnings about a housing bubble, but clearly many people chose to ignore those warnings or dismiss the predictions of a coming housing crash and/or crisis as unlikely to come true. Separately, I was interested in hearing what these individuals prescribe…

(Editor’s note: Bold added for emphasis)

Personally, I’m interested “in hearing what these individuals prescribe” in 2016, as these people managed to correctly-call last decade’s housing bust, the global economic crisis that reared its ugly head in the fall of 2008, and the “Great Recession.”

Not so much their peers who completely missed the signs of the financial storm yet whose forecasts are still touted and relied upon, with some among this group even trusted with getting America out of this ongoing mess.

A solid effort by Karz, which you can view on his website here.

Now I’m just waiting for him to publish the list entitled “Who Incorrectly Called The Global Financial Crisis,” so I know exactly who not to listen to concerning such matters.

“I hope you know that this will go down on your permanent record…”

Actually, this “nattering nabob of negativity” already has a pretty good idea of who those people are. And anything they say I take with a grain of salt…

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Peter Schiff: ‘I Think This Recession Is Going To Be A Greater Recession’

Euro Pacific Capital CEO Peter Schiff, who correctly-called the housing bust and economic crisis last decade, just uploaded a new entry to The Schiff Report vlog on YouTube. On February 5, Schiff told viewers:

I think the recession that we are already in- and yes, the government will eventually admit this after the fact, just like they did with the Great Recession- but I think this recession is going to be a Greater Recession. I think it’s going to be deeper and longer lasting than the last one. And I don’t think the government is going to be able to save us with a stimulus. And I think that ship has long sailed. I think when the dollar starts to tank, and when it does, I think consumer prices in the U.S. are going to go up a lot more next time than they did last time…

I think now you’re going to see big increases in consumer prices. Remember the stagflation of the 1970s. Except this is going to have a lot more stagnation and a lot more inflation. And unlike what Ronald Reagan did at the end of that decade to put out that fire, nothing like that is going to happen this time because we can’t do it. We don’t have the tools. We can’t raise interest rates to fight inflation no matter how high inflation rises because that’s how broke we are. The only things keeping our institutions afloat, including the federal government, is artificially-low interest rates. And the more debt we have, the more important those low interest rates are to maintain the illusion of solvency. So, inflation is going to keep on going up and that is going to cause a flight from the dollar…


“Weak Jobs Report Not Weak Enough For Stocks”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Peter Schiff Predicts ‘Negative Interest Rates Before The Election Because We’re Going To Be In A Serious Recession’

Euro Pacific Capital CEO Peter Schiff, who correctly-called the housing bust and economic crisis last decade, is sounding the alarm again these days. Big time. Business Insider’s Bob Bryan reported Friday:

The CEO and chief global strategist for Euro Pacific Capital, and noted perma-bear, said that serious economic destruction is just a few months away.

“I think the Fed is going to have negative interest rates before the election because we’re going to be in a serious recession,” Schiff told Business Insider on Friday.

In fact, Schiff said that we may already be in recession and this one is going to be a doozy.

“We’re in worse shape now than we were in 2007,” he said…

“We’re headed for a real economic collapse,” Schiff said, “the order of magnitude of which will be much greater than 2008’s crash.”

No way am I going to steal Bryan’s thunder on this. Head on over to the Business Insider website here for the full story.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Monday, February 1st, 2016 Crash Prophets, Interest Rates, Recession No Comments

Peter Schiff: U.S. Stocks In Bear Market, Economy In Recession, ‘Going To Be Longer And Deeper Than The Great Recession of 2008-2009’

The last “crash prophet” I’ll be talking about today is Euro Pacific Capital CEO Peter Schiff. Earlier Monday I watched Graham Ledger interview Schiff, who correctly-called the housing bust and economic crisis last decade, on the January 21 installment of The Daily Ledger show (One America News Network). From their exchange:

LEDGER: Do we have the indicators right now of a bear market?
SCHIFF: Well, sure, not only are we in a bear market in stocks. I think we’re in a recession, economically. When you played the clip from President Obama’s State of the Union- when he talked about people peddling fiction I thought he was talking about me. But I’m the one who’s selling reality. He’s peddling a bill of goods trying to pretend this recovery is real. But whatever it was- it’s over. And I think the recession that we’re in now is going to be longer and deeper than the Great Recession of 2008- 2009. And of course, all bear markets begin as corrections. But they don’t officially call it a bear market until it’s down 20 percent. The Russell 2000 is down 25 percent, the Dow Transports are down 30 percent, many individual sectors and stocks are down a lot more than 20 percent. And so it sure feels like a bear market even though officially Wall Street hasn’t declared it a bear market. But if the Fed doesn’t come up with a QE 4. Which I think it’s going to do. I think it’s a mistake. They shouldn’t do it. They shouldn’t have done 1, 2, and 3. But the only way to stop an official bear market will be for the Fed to reverse course, reduce rates, and launch another round of QE. That’s it.


“Market Tanking After Fed Pricked Their Own Bubble”
YouTube Video

Schiff went on to talk about how the U.S. auto “bubble” has burst, the U.S. housing market is also a “problem,” and that he predicts “a lot of people are going to lose their jobs in this recession.” Regarding the Federal Reserve and Janet Yellen? They’re going to try and keep this thing afloat until November. From the interview:

Obama’s whole claim to fame is that he inherited a disaster, and now everything is great. The truth is, he inherited a disaster, and now it’s a bigger disaster. But he doesn’t want the voters to know that in November. And I think Janet Yellen is a team player. I think she looks at herself as a member of the Obama administration. She is a very partisan, liberal Democrat. And she doesn’t want this thing to collapse until the election is over. Now, I don’t know if she’s going to succeed. I think she’s going to try though.

Like fellow “crash prophet” Jim Rogers, Schiff believes China is being used as a scapegoat for America’s latest financial woes.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

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