I talk to a lot of people over the course of a day. And there are a lot of people right now that are really upset about the way things are going. Are we going to have a friggin’ socialist nominated for president or a convicted pathological liar? Are we going to have an ego-maniac on the other side? Is there going to be a third party run for Trump? Does Blumenthal matter at all? What about Scalia’s death and impending vacancy on the Supreme Court? All valid questions. All meaningless questions because there is something more important that is about to hit this country, and it’s not going to be pretty.
And it’s the exact reason why you shouldn’t be worried about who’s going to be president next year!
We are headed for one gigantic economic meltdown. We’re talking 1930’s proportion here, and it’s coming hard and fast. It’s going to be world-wide, and it’s going to crush the Democrats’ chances of winning not only the White House, but the Senate or the House. OK, so how do I know this? I’m not imbued with some divine spirit that whispers in my ear. I read the tea leaves that are out there and we are in a shitload of trouble.
The world is heading toward negative interest rates. Do you know what that means? It means quite literally that instead of the central banks paying the member banks an interest rate to hold on to their money, the member banks are charged a fee to keep their money safe. That means in turn, the member banks (like the one on the corner where you have your money) now have to a) either lend out more of their money at a very low interest rate to avoid paying fees on it or b) pass the charge on to you in the form of more fees. In the case of a), you’re going to see more defaults (think banking crisis), and in the case of b) you pull your money out of the bank and it loses the opportunity to loan money. You just keep the cash at home under the mattress.
So, why is this a bad thing? Because the people that lend the money are going to somehow have to justify to their boards how they can make money at 0% interest and still keep the doors open. They can’t in the long run. And the economy suffers. It’s a deflationary cycle that spirals down (just the reverse of what we saw with Jimmy Carter in the 1970’s when interest rates were around 20%). You’d think if inflationary was bad, deflationary would be good. Actually, that’s not the case, somewhere in the middle is ideal.
And what does all of this have to do with the Democrats losing the White House? Simply put, Joe Six Pack votes his wallet. If he isn’t making money, if he isn’t able to spend money because he’s hoarding it, the economy collapses and we go to recession or worse. And we normally don’t keep a party in the White House when we’re in recession…2012 was an outlier on that one! The stock market will be way down, the value of IRA’s and 401k’s will be way down and you will be asking yourself where do you invest in order to retire. It’s that simple. We have to by virtue of a credit wash, go back to a cash-based society. And whoever sits in the White House gets the blame.
Add to that one final thought. We usually are on 7-8 year cycles for recessions. That means we’re due. Technically, though the economy hasn’t grown a whit since the last recession started because of Obama’s obtuse ideas about the economy, we’ve wasted the chance for growth this period…and here we are at another recession point. What do we do now? First, we need someone in there that understands economics, because the current guy is woefully lacking in skill at that (and a lot of other things).
That my friends…is why I say, “Bring it on!” Nothing to worry about as far as the election is concerned. The country is not going to vote for either a liar or a socialist in the midst of a recession!
Carry on world…you’re dismissed!