Free Reports

Who Still Supports Trump?

Oct 13, 2016

27

BALTIMORE - What a great time for an observer with a sense of mischief!

This year's presidential campaign is the most absurd and remarkable we have ever witnessed.

After more than two centuries, Americans are finally getting the democracy they deserve - one that is grotesque...slimy...and immensely entertaining, albeit in the mud-wrasslin' genre.

In Sunday's debate, one candidate actually promised, if he wins, to put the other one in jail.

The other one, with a straight face, said she would risk provoking Russia into a war by backing the al-Qaeda-linked rebels in Syria.

Who could possibly be so earnest and civic-minded as not to laugh?

Gassy and Bloated

But the financial world is our beat here at the Diary. And it, too, keeps us chuckling.

Yesterday, stocks and bonds sold off. The British pound plummeted versus the dollar. And LIBOR - the rate some of the world's largest banks offer each other for short-term loans...and a key gauge of the health of the banking system - spiked.

Most commentators tell us that investors are reacting to the smoke signals from the Fed.

Apparently, after eight years of 'emergency' low interest rates, America's central bankers are wondering what the emergency is.

Now, they hint, they will tighten credit conditions as though they meant it.

The absurdity of fixing interest rates in what is supposed to be a free-market economy must be working on their innards. They go to bed at night gassy and bloated and wake up with their heads aching...

Central banks set out to mislead investors, households, and businesses with their phony money and fake interest rate signals.

Now they are lost, too.

With no honest money or true prices to guide them, they don't know east from west or up from down. They don't know where they are... and they are afraid they might end up where they don't want to be.

The fear is interfering with their digestion.

So, they talk about returning to 'normal'. But there is no way to do that. Not without suffering the cramps and pains they so richly deserve.

Advertisement
  [VIDEO]: 58 Minutes with Vivek Kaul...  
   
  The "India Crisis" that I have been warning you about in my previous emails just got worse.

In fact, to help me explain to you the potential danger this crisis puts you and your family in...

We invited lauded journalist Vivek Kaul to speak with me at our Equitymaster offices in Nariman Point.

Click HERE to see that video and learn:

  • What India's demographic dividend really looks like
  • What industries India really needs to focus on to get on top
  • What the government is really concerned with
  • Why you should begin to protect your financial assets and family immediately
*Plus valuable information on the current real estate market

Click HERE to watch the full 58-minute video.
 

Wealth Wipeout

As the manager of the world's biggest hedge fund, Ray Dalio predicted last week even a 1% increase in the Fed's target lending rates would mean trillions of dollars of losses in stocks and bonds.

How could the Yellen Fed sit still for that after pretending to protect investors from risk for the last eight years?

And as we've been pointing out, there is no reason to expect the losses would stop at a few trillion dollars.

The greater the absurdity, the greater the panic that follows it. In a matter of weeks, as much as $75 trillion could be wiped from the world's asset prices.

There is currently about $14 trillion worth of debt trading at the most absurd (negative!) rates in 5,000 years.

US stocks are near record highs...even as corporate balance sheets have deteriorated and GDP growth has stalled.

And 'inflation' and 'unemployment', as measured by the Bureau of Labor Statistics (BLS), are largely fantasies.

And the little people know it...

Our friend Rob Marstrand from OfWealth just looked at one key price - one that is near and dear to the working class: the price of a pickup truck.

According to the BLS, prices on automobiles have barely budged over the last 20 years. But that is clearly absurd. A new Ford F-150 pickup costs upward of $26,000 today. The same basic truck was about $15,000 in 1996.

The BLS says the two are actually the same price because today's pickup is 'better'.

Yes, that's right. It is better. More electronic gear. Airbags. And so forth. So, BLS argues that, dollar for dollar, you get the same amount of truck today as you did in 1996.

But, of course, the man who needs a pickup truck cannot go to the dealer and say, 'I just want $15,000 worth of pickup. You know, like I got in 1996.'

He still has to pay the full $26,000...and it still does basically the same job it did during the Clinton administration. It takes him and his tools from point A to point B. But it costs him 70% more.

Phony Adjustments

The other big thing a working man needs is a place to live.

According to the BLS, since 1996, housing prices have gone up about 50%. But when we do a little fact-checking, we find that, 20 years ago, the typical home sold for $137,000.

Today, the median sales price is $305,500. Wait, that's not 50% more. It's 123% more. We didn't check with the BLS, but we suppose the discrepancy is due to the same 'adjustment' made by wonks who think that today's house is 'better'.

Maybe so. But the typical working stiff still has to live in the typical house and drive the typical truck to his typical job. He can't say, 'I'll just take the house, but hive off a couple of those bedrooms. I can't afford them.'

But wait... Does the typical working man earn 70% more today than he did 20 years ago?

According to the Census Bureau, in 1996, the average nominal (unadjusted for inflation) personal income of people with 'some college' but no degree was about $29,000.

Today, if we read it right, it is $40,000. That's an increase of about 38%, not 70%.

The feds - with their phony adjustments - show the typical person standing still. But he is not. After two decades of prices rising more than three times as fast as incomes, the typical person is far worse off than he was 20 years ago.

His major expenses - and we have not even mentioned tuition and medical care, which even the fed's fake numbers show are 200% and 100% higher, respectively, than they were in 1996 - cost him $109,000 more than they did 20 years ago....and he has only $5,000 more income.

Why else would voters spend a minute listening to a scalawag such as Donald Trump? Fake money, fake statistics, fake interest rates - they've created an economy where the Trump voter has less real income.

They know they have been bamboozled. They count on Donald to do something about it.

Regards,
BILL BONNER Founder, Agora Inc
Bill


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

Get 'India's Big Government' at Just Rs 199 Now October 18, 2017
Vivek's latest book is now available at a rare discount. Grab a copy now.
Our Plan to Save the Ranch October 18, 2017
How to increase fertility in the kingdom of cows.
Nobody Honks in Bali - Lessons for Indian Tourism October 17, 2017
Things India can learn to promote tourism from this small island.
We Rode Out... Unarmed October 17, 2017
Money is the tape measure for the carpenter economy.

Equitymaster requests your view! Post a comment on "Who Still Supports Trump?". Click here!

1 Responses to "Who Still Supports Trump?"

KD

Oct 13, 2016

Bill, in USA, cost of health care, education and houses keep on increasing every year disproportionately with the rate of inflation. These are the most basic facilities. In India you can see DM (PhD) doctor without an appointment at very reasonable price. Even, very high grade tutoring for your children is at very reasonable price. I was in high stress because my first employer did not provided with me for health insurance for first three months in USA. He told me that I do not have work experience therefore I am worthless!!!!!

Like 
  
Equitymaster requests your view! Post a comment on "Who Still Supports Trump?". Click here!