Skip to main content

Making America broke again: Trump & the inevitable financial crisis

Trump can either ‘bite the bullet’ now if he really wants to improve the American economy or he can ‘kick the can down the road’ like his predecessors have, noted financial commentator Peter Schiff tells MintPress.

by Whitney Webb

Part 5 - No Easy Way Out: Trump’s role in the impending crash

With the roots of the next crisis established prior to Trump’s assumption of the presidency, combined with the ineffectiveness of post-2008 regulations, the Trump administration faces an uphill battle — especially if the next crisis takes place during the next four years. All of the news coverage and comments from prominent figures in the financial establishment once again seem to be shifting the blame from central bank policy to Trump’s review of banking regulations, suggesting that the financial elite’s scapegoat for the next crisis has already been selected.

Schiff said the financial establishment “will try to pretend that everything else was great under Obama and then act like Trump ruined it.

This isn’t to say that Trump’s potential removal of banking regulations won’t exacerbate or speed up the onset of the coming crisis. James Rickards told MarketWatch it’s likely that a crisis can only be prevented by reinstating the Glass-Steagall Act, which separated investment and commercial banking, breaking up the big banks, banning most derivatives, and enacting tougher law enforcement of bank wrongdoing. But considering the makeup of his Cabinet and team of economic advisors, Trump is unlikely to push for any of these changes.

Writing for the Libertarian Institute in November, Eric Schuler noted, “The next recession is likely to commence during Trump’s tenure. But while he may prove to be an unwitting catalyst of the next crisis, his policies will not be the primary cause.

Instead, Trump is more likely to focus on loosening existing banking regulations than imposing any new ones. Though they do not account for the root cause of the crisis, the president’s actions in this regard could potentially accelerate the bursting of the bubble. However, this is difficult to gauge due to the fact that this new, looming crisis is long overdue.

Trump is ultimately faced with no easy choices. He can either allow the Fed to further inflate the bubble or he can try to bring about a market correction by forcing interest rates to increase in order to establish the foundations for positive economic growth. Both possibilities promise to bring unemployment and economic difficulties for the average American – particularly in the short term. Regardless of how Trump proceeds, he is likely to encounter major conflicts in fulfilling his campaign promise to “Make America Great Again,” as any major economic downturn could potentially lead to widespread, popular unrest throughout the nation.

Trump can either “bite the bullet” now if he really wants to improve the American economy, Schiff said, or he can “kick the can down the road” like his predecessors have.

Even if Trump chooses to delay the inevitable, the next crisis, already long delayed, is increasingly likely to unfold regardless of any action the president may take. And that crisis is likely to define his presidency.

***

Source, links, videos:


[1] [2] [3] [4]

Related:



Comments

Popular posts from this blog

How a group of economists undermined public institutions, paving the way to neoliberalism

An assumption had become a truth. The self-interested model of human behaviour, that had been developed in the Cold War to make the mathematical equations work, had now been adopted by these economists as a fundamental truth about the reality of all human social interaction.
globinfo freexchange
A group of economists in the early 70s arbitrarily adopted the self-interested model of human behaviour that had been developed in the Cold War, to explain the dysfunctionality of public institutions. This perception would become a powerful tool in the hands of the neoliberal ideology, carried by big banks and corporations, to demonize the state and dismantle any state control upon them at the expense of the societies.
In his documentary The Trap, Adam Curtis explains:
In the early 70s, the government bureaucracies in Britain began to collapse. Those around them blamed a growing economic crisis, but it was clear that something much more fundamental had gone wrong. What were supposed to be institut…

Italy, Greece, Deutsche Bank: heavy clouds of non-linear collapse gather again above Europe

globinfo freexchange
For nearly ten years now, the key decision centers inside eurozone are trying to hide the huge problems, pretending that the crisis is behind, in order to maintain a completely failed economic model, which also reveals, day by day, its authoritarian nature and despise against real Democracy. The totally problematic structure of eurozone makes things even worse.
In Italy, we had another political crisis and a constitutional coup because the new majority and potential coalition government is not likeable to the Brussels/Berlin axis.
In Greece, things are not looking better. The country is about to exit the IMF-type neoliberal program imposed by the Troika (ECB, European Commission, IMF), in August. Yet, the economy is still in very bad shape, drowning in stagnation, with unprecedented unemployment, nearly zero growth and a national debt at 180% of GDP, which is actually much higher than Greece's debt in 2010 (120% of GDP) when crisis hit the country!
In fact, the eu…

WikiLeaks reveals Italian officials had serious concerns about Italy's ability to participate in the monetary union already since the late 70s

The WIKILEAKS Public Library of US Diplomacy (PlusD)holds the world's largest searchable collection of United States confidential, or formerly confidential, diplomatic communications. As of April 8, 2013 it holds 2 million records comprising approximately 1 billion words. The collection covers US involvements in, and diplomatic or intelligence reporting on, every country on earth. It is the single most significant body of geopolitical material ever published. The PlusD collection, built and curated by WikiLeaks, is updated from a variety of sources, including leaks, documents released under the Freedom of Information Act (FOIA) and documents released by the US State Department systematic declassification review.
globinfo freexchange
A 1978 cable from the US Bureau of Economic and Business Affairs to the Secretary of State, was monitoring in detail the Italian serious concerns on the perspective of Italy joining the European monetary union. It describes an atmosphere of anxiety insi…

How eurozone became a financial dictatorship

It all started with the silent coup against Ireland
globinfo freexchange
In 2010, Ireland experienced Frankfurt's political blackmail. On the 18th of November, where there was a governing council of the ECB in Frankfurt. The governor of the Irish central bank who sat on the governing council, called "Morning Ireland" which is the most important radio program in Ireland, to say that Ireland will need what he called a loan. He didn't warn the government about it and this created a massive panic.
Then, the next day, there was a letter written from the then president of ECB, Jean-Claude Trichet, to Brian Lenihan, the minister of finance at the time, saying that 'if you don't apply the so-called bailout program, by this opening of the markets the following Monday, we're going to cut off access to Emergency Liquidity Assistance (ELA)', which obviously would have collapsed the Irish banking system.
The ECB used the liquidity weapon in order to impose its terms o…

David Harvey: unless there is some real new thinking, another crisis is inevitable

globinfo freexchange
Chris Hedges spoke with David Harvey about the repeated crises of the capitalist system, which generate further instability, especially since the early 70s where we have the rise of financial capitalism and neoliberal ideology.
As Harvey points out:
Interestingly, in almost every crisis there has been a good deal of re-evaluation of exactly how to think about the economy, how to think about the relationship between state power and politics and all this kind of stuff.
Since 2007-08, is hardly any new thinking at all. And actually, we're trying to hang on. And we are trying to hang on because the oligarchy - which has all of the money, all of the power - is actually in a situation where it does not want any change. And until we confront the oligarchy, we're not going to find a way of exiting from this, apart from repeating what happened in 2007-08.
And the interesting thing when you look back, before 2007-08, and you see big financial crises in Argentina, in Braz…

The facts about Venezuela’s May 20th Presidential Election

Despite a high level of election transparency, one that Jimmy Carter called “the best in the world”, the US and its allies have accused Venezuela of election fraud. Caleb Maupin breaks down how Venezuela’s electoral system really works.
by Caleb T. Maupin
Part 3 - Accusations of Fraud
Despite the stringent safeguards in place to protect Venezuela’s election integrity, international media based in Western countries have widely claimed the election was fraudulent. Those claiming that the results are illegitimate have cited prior statements from SmartMatic, a corporation based in London that manufactured Venezuela’s voting machines. An official statement from SmartMatic claimed the 2017 Constitutional Referendum vote showed “tamper evident.” Statements from SmartMatic have been vague about how exactly the results were illegitimate or what malpractice took place.
Tibisay Lucena, president of the National Elections Center (CNE), says the claims from SmartMatic and its Chief Executive Antonio …

Will the Swiss citizens beat the banksters today?

About 5.3 million Swiss citizens, including registered members of the Swiss Abroad community, are eligible to take part in the June 10, 2018 ballot. Votes on a broad range of issues, as well as elections, also take place in many cantons and municipalities across the country.
globinfo freexchange
The Swiss sovereign-money referendum of June 2018, also known as the Sovereign-Money Initiative, aims to give the central bank of Switzerland the sole authority of "creating money."
This is actually what the proponents of the Swiss "Vollgeld Initiative" want. They say only the government, through the publicly-owned Swiss central bank (SNB), should be able to create money and put it into circulation.
The Sovereign Money Initiative aims to give the Swiss Confederation a monopoly on money creation, including demand deposit (full-reserve banking, by including the creation of scriptural money in the legal mandate of the Swiss National Bank. The name of the initiative was inspired by…

Marx predicted our present crisis – and points the way out

The Communist Manifesto foresaw the predatory and polarised global capitalism of the 21st century. But Marx and Engels also showed us that we have the power to create a better world.
by Yanis Varoufakis
Part 1 - The spirit of communism driving the manifesto is proving hard to silence
For a manifesto to succeed, it must speak to our hearts like a poem while infecting the mind with images and ideas that are dazzlingly new. It needs to open our eyes to the true causes of the bewildering, disturbing, exciting changes occurring around us, exposing the possibilities with which our current reality is pregnant. It should make us feel hopelessly inadequate for not having recognised these truths ourselves, and it must lift the curtain on the unsettling realisation that we have been acting as petty accomplices, reproducing a dead-end past. Lastly, it needs to have the power of a Beethoven symphony, urging us to become agents of a future that ends unnecessary mass suffering and to inspire humanity …

More evidence that the 2011 riots in Syria were sparked by a false flag operation

globinfo freexchangeIndependent journalist Eva Bartlett spoke with Lee Camp about her recent trip in Syria. Bartlett visited the hospital in Douma where many victims of the latest alleged chemical attack went to receive medical care. Bartlett spoke with a medical student who was working the day of the alleged attack, and actually confirmed the reporting by the veteran journalist Robert Fisk, according to which there was no evidence of a chemical attack.
Bartlett also went to Daraa, where the first protests took place in 2011, and spoke to people there. They confirmed what many other investigative journalists support. 

This is strong evidence that it was a false flag operation that actually sparked the subsequent riots:
In the initial protest, Daraa was named as the birthplace of the so-called revolution. And Daraa is a city in the very south of Syria, not a very large city, and a rather unlikely city for a so-called revolution to have started. But prior going to Daraa, I interviewed a do…

IMF lunacy: Lagarde admitted to Varoufakis in private that the program imposed on Greece doesn't work!

globinfo freexchange
As Yanis Varoufakis describes in his book Adults in the Room:
Less than a month after my election, on 11 February 2015, in one of those spirit-numbing, windowless, neon-lit meeting rooms that litter the EU’s Brussels buildings, I found myself sitting opposite Christine Lagarde, the IMF’s managing director, France’s ex-finance minister and a former Washington-based high-flying lawyer. She had waltzed into the building earlier that day a glamorous leather jacket, making me look drab and conventionally attired. This being our first encounter, we chatted amicably in the corridor before moving into the meeting room for the serious discussion.
Behind closed doors, with a couple of aides on each side, the conversation turned serious but remained just as friendly. She afforded me the opportunity to present my basic analysis of the causes and nature of the Greek situation as well as my proposals for dealing with it, and nodded in agreement for much of the time. We seemed to s…