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NORMANDY, FRANCE – Until last week, Republicans controlled the House… the Senate… and the White House.
But who controlled Republicans?
As it turned out, many – including the Republican-in-Chief – were out of control.
Then came the explosion. Dazed and shell shocked, it took commentators, analysts, and GOP members a few days to get their bearings.
Stunned and dismayed, when they opened their eyes, they could scarcely believe it: Republicans had lost control of the White House!
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Party of Trump
Their main man, Donald J. Trump, has left the reservation.
He’s now acting independently, ready to break bread with either party, depending on which way the wind is blowing.
And in a late, degenerate empire like the U.S., you don’t even have to look out the window. The predominant winds blow in only one direction.
Trees bend… buildings sway… even the cows lean – as gusts of hurricane force sweep money from up and down Main Street… and blow it toward the insiders, their zombie clients, and the crony hustlers.
Ultimately, the Deep State controls both parties. There are too few genuine “conservatives” or honest “liberals” left to make any difference.
Naturally and rightly, both parties are held in contempt by everyone who stops to think about such things. That is why the path is now open for the Great Disruptor to walk away from his Republican allies and form a new party of his own.
He’s put his brand on wine, ties, steaks, hotels, casinos, a university, an airline…
Why not a political party?
Emmanuel Macron did it in France. Juan Perón did it in Argentina. Hugo Chávez did it in Venezuela. Adol… oh, never mind.
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Financial Wreck
But let’s go back and look at some of our core dots and see whether they connect the way we think.
Governments are always looking for ways for the few to exploit the many. They are essentially win-lose protection rackets. You pay – or else.
In the American colonies, smart people – Jefferson, Adams, Madison, and others – put up obstacles designed to keep the feds in their place.
Specifically, the Constitution and the Bill of Rights were intended to protect citizens from their predatory government.
Later, in 1917, another protection was put in place: a debt ceiling to limit the amount of money the insiders could borrow in citizens’ names.
But over time, more chiselers and grifters slithered into the Washington swamp. Republicans and Democrats – they enacted laws, regulations, and policies that cost the public money… but paid off for the insiders.
Gradually, a Deep State took shape. It now makes the important decisions, regardless of what the voters want.
And little by little, the insiders overcame the measures put in place to hold them in check. The last major barrier still standing in their way – the debt ceiling – was set for demolition last week.
Mr. Trump, turning on his own party, made common cause with the Democrat leadership to get rid of it.
What does this mean for us? For the stock market? For the economy? For bonds and the debt market?
Trillion-dollar deficits… more and more people retiring… a runaway empire… and rising debt.
There is no way, politically, to stop this train… because the people who control the system also benefit from it. They don’t want it to stop.
And now, there is nothing standing between the U.S. and a national financial wreck.
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Third Way
But we’ll come back to that tomorrow.
Today, let’s stick with Mr. Trump… and a little malign reverie.
Is it possible that he will start his own political party? A “third way” like Macron, Perón, or Chavez?
Yes, it is.
He may do so partly because he will be rejected by the Republicans, who are getting tired of pulling knives out of their backs… partly because it appeals to his own egomaniacal, goofball character… and partly because it increases his power, allowing him to become the real decider, swinging between Republican and Democrat proposals.
Like Mr. Perón’s creed, “Trumpismo” will be starkly demagogic, functionally socialist, and deeply opportunist.
And like Mr. Perón, Mr. Trump will go directly to the masses, tweeting promises of riches and national greatness. He will rail against the Republicans blocking his loony programs. He will rant against the Democrats for resisting his ghastly projects. He will howl and whine about the “fake news” media.
He will be the counterfeit champion of the “little guy” against the Establishment. And Ivanka – fresh from a breakfast meeting with Fed chief Janet Yellen where they discussed the plight of working women – will be his Evita.
She will represent the poor… the lonely hearts… and orphaned children. She will distribute presents at Christmas… and lobby for more benefits for the downtrodden.
As her father surrounds himself with generals… and basks in the reflected glory of ersatz heroes… Ivanka will appeal to the false, feminine soul of the people, offering the soothing balm of other people’s money.
If he fails – which is most likely – Mr. Trump will disappear in the chaos and ignominy of the coming financial crisis. If he succeeds, Trumpismo – like Juan Perón’s movement in Argentina – will blight the American political landscape for the next 70 years.
Regards,
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Bill
Market Insight: The Second Strongest Bull Market in History
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
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The S&P 500 just crossed an important milestone.
After yesterday’s close, it became the second strongest bull market in history in terms of percentage returns.
Today’s chart tracks the strongest bull markets – defined as a rise in stock prices without a pullback of more than 20% – in history.
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As you can see, the strongest bull market was the 582% rise between 1987 and 2000.
Up until yesterday, the second strongest bull market was between 1949 and 1956 – a 267% rise in total.
But after yesterday’s close, it has now been topped by the bull market of 2009 to 2017 – a 268% rise so far in total.
– Chris Lowe
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Mailbag
According to Bill, President Trump has gone “Full Deep State” after his deal with Democrats over the debt ceiling. And it’s gotten readers thinking…
Bill, as a reader for over 20 years of your work and many publications in your Agora empire, I continue to be amazed at some of your great daily thoughts.
At age 70 – I think you’re in that group, too – I have always respected you as a guy who grew up working, got an education, built a publishing empire, knows how to work with his hands, and speaks like a “real world” guy.
Today’s piece, “Trump Has Gone ‘Full Deep State,’” is great! It’s sad to say many of us “deplorables” were dumb enough to believe Trump might be different. One thing’s for sure, he never said he was a politician, but a great deal maker. I for one don’t see how he will ever “Make America Great Again.” The long knives are out. The history of Rome comes to mind.
– James M.
I don’t understand all of the angst over debt limits and income taxes. It is obvious that the United States can sustain unlimited amounts of debt for an unlimited period of time. We should just simply eliminate the debt limit and the income tax. The Federal Reserve can just buy all of the debt, and voila, problem solved. Next problem?
– Ike K.
The debt ceiling fight is purely political gamesmanship and ought to be abolished. The same Congress that sets the debt ceiling also approves deficit spending. How crazy is that?
If they don’t want to raise the debt ceiling, they should not approve a budget that is unbalanced, otherwise the debt should be raised commensurate with the added deficit – automatically. Congress can’t address real issues; we should abolish it, too. You are right, one man can’t defeat the Deep State alone if most of the 535 members of Congress are not helping.
– Eric K.
“The Donald” may have quite the collection of knives, but so do a lot of other folks in Washington and elsewhere. And the more knives he sticks in others, the fewer people he will have who are willing to protect his back. In Washington, as everywhere, what goes around, comes around. It will indeed be interesting to see the fallout from his latest knife trick.
– Gordon F.
I watched President Trump come out to make the announcement, and it was with something I’ve been noticing more and more about him… slumped shoulders and a defeated demeanor.
You don’t suppose all this “collaborating” with Dems has to do with the incessant investigations into his children and threats… even if they have to make up allegations and railroad them through their bought and paid for crony system.
– Jack D.