The Swamp Claims Its First Victim - Vivek Kaul's Diary
Free Reports

The Swamp Claims Its First Victim

Mar 28, 2017


Washington [is] a lot more broken than President Trump thought that it was. - White House Budget Director Mick Mulvaney

SÃO PAULO, BRAZIL - On Friday, the much-hyped Trump/GOP Obamacare reform sank into the swamp.

If anything keeps us from national bankruptcy, it won't be entitlement reform.

Not under Donald J Trump.

Next up, tax reform.

  Multibagger Stocks Guide
(2017 Edition)
  In this report, we reveal four proven strategies to picking multibagger stocks.0

Well over a million copies of this report have already been claimed over the years.

Don't miss it for anything.
Go ahead, grab your copy today. It's Free.
As soon as you sign up, You will start receiving The 5 Minute WrapUp,
a Free-for-life newsletter from Equitymaster

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Swamp Battle

Here again, readers are advised not to hold their breath.

The same slimy swamp battles - with politicos, insiders, GOP rival factions, and President Trump himself all snapping at each other's tails - will probably kill any serious reform.

Besides, there's a deeper problem. Tax 'reform' or tax 'cuts' are useless unless spending is also cut.

Otherwise, they just shift the burden from one taxpayer to another...or from taxpayers to consumers...or from targeted tax victims to the general public.

And trying to cut spending is...well...tough.

And if you don't cut the military or entitlements...what's left?

Not much.

We recall the jubilation in some quarters as the new team sailed up the Potomac and dropped anchor in the Tidal Basin.

The parties...the fanfare...the hopes that, finally, the US government might take a new tack.

US GDP was $14 trillion in 2009. Today, it is $18 trillion. That's a 35% increase, equal to $4 trillion.

Meanwhile, the Dow rose increase of $14 trillion.

Per capita, working stiffs saw barely any increase in the value of their main asset: their time. But day and night, the rich got richer and richer...without breaking a sweat.

For every extra dollar earned by the working class over the past eight years, the financial-asset owners - about 10% of the population - earned three times as much.

This skewing of wealth toward the wealthy didn't 'just happen'. It wasn't caused by the Chinese or the Mexicans. Or the liberals. Or the conservatives.

Instead, it was the product of a credit-money system that is now firmly supported by Republicans and Democrats...and the entire Establishment.

It is also the main source of funds for the swamp...and for the Deep State critters who live in it.

Headed for the Rocks

Mr Trump promised a change. But already, his administration heads for the rocks.

To deliver on his promises - draining the swamp, making America great again, and giving the average working guy a decent break - his band of buccaneers had to move fast...and boldly trim the sails.

It had to take on the Deep State - the 'shadow government' that really controls the levers of power - and make real cuts in bureaucracy and in spending.

It also had to reform the fake-money system. But that was always such a far goal, it was never mentioned.

Typically, a new president has the wind at his least for a few months.

But we're barely two months into the Trump team's program, and the winds have already shifted. There are no cuts to entitlements anywhere on the horizon - including the runaway O'care system.

Mr Trump now blames the conservative Republicans in the Freedom Caucus (the Tea Party guys) for blocking the GOP healthcare reform. And he finds it tough to get 'Lil' Marco' and 'Lyin' Ted' to cooperate.

Surprise, surprise.

As for the Democrats, forget it: He accused their outgoing prez of wiretapping him. And their new champion, he suggested, should be locked up.

There won't be many Dems crossing the aisle to help the guy.

Blowin' Up a Gale

Mr Trump - the self-proclaimed dealmaker extraordinaire - is discovering that getting the ship of state to go where he wants is not easy.

It's one thing to make a deal in the world of business. It's another in the world of politics.

And watch out... A real gale could be blowin' up...

Markets - so benign and helpful up to now - may soon turn on him, too.

From what we see now, it looks as though the US bond market hit its high last July...and US stocks peaked on March 1.

If this is so...and we wait to find out along with everyone could mean a much tougher situation all around.

Falling prices on Wall Street will lead to some long faces. And as they fall, you can expect some calls for the Fed to reverse course - to lower interest rates rather than raise them.

But there's an ill wind stirring.

The latest reading from private inflation tracker PriceStats - which bases its readings on millions of online prices - puts today's prices 3.6% higher than those of a year ago.

At that level, it will be hard for the Fed NOT to continue its rate hikes. And it will be hard for stock and bond prices NOT to fall.

And it will be hard for the Fed NOT to find that it, too, is in conflict with the Trump administration.

We can see the tweet coming: 'Stocks and bonds falling. Economy going into a recession. Jobs disappearing. And the Fed won't lower rates. SICK!'

BILL BONNER Founder, Agora Inc

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Recent Articles

Our Newest "Fixer-Upper" July 20, 2018
Bill Bonner talks in detail about US president been accused of treason, biggest debt default in China, the problem of growing inflation and the trade war.
How to Build Affordable Homes in India July 19, 2018
Rajiv Talwar, the CEO of DLF, makes a few interesting points in a recent interview.
Deep State Turns on Trump July 19, 2018
In the last half-century, no president has ever seriously challenged the Deep State. Bill discusses the repercussions of same in today's issue...
A Sense of Melancholy July 18, 2018

Equitymaster requests your view! Post a comment on "The Swamp Claims Its First Victim". Click here!