THE FOUR HORSEMEN OF THE APOCALYPSE

The President is a self-described very stable genius and I concur!

The only qualification to that statement is the location of the stable.  I contend it’s in a barn like Mr. Ed the talking horse, just like the old sitcom where a horse talks to his owner Wilbur.  In this context as a barn animal, Trump could be considered a very stable genius when compared to all the other barn animals.

I previously described the President as Mr. Ed the talking horse, because he was housed in a stable.  Wilbur Ross Secretary of Commerce, aka-the horse whisperer, is another character in this freak show. Wilbur was previously known as the “King of Bankruptcies” prior to slithering into this administration.

Now we have two of the horseman.  The third member of this toxic muck racking mess is Steve Mnuchin Secretary of the Treasury, best known for his 17-year stent at Goldman Sacs.  You know, the investment firm that brought us “too big to fail” and the recession of 2008 fame?…yes that one.  Does anyone see a pattern here?  The bankruptcy king, and the recession guru as advisors, and at the top we have the very stable genius and king of debt.  Get the picture? 

The last link in this group of thieves is Jerome Powell, Fed Chairman and Trump sycophant, that lowered interest rates in a booming economy last year yielding to the pressures of the stable genius.  This is poor use of the Fed tools by Trump (Mr. Ed) , who says he went to Wharton, a prestigious economics school…and I claim as BS.  Lowering the interest rate to levels below 1% would have been the very last tool in their arsenal in any other administration.  Not in this one. 

The liquidity provided by the Fed, leveraging the $2 trillion in funds, provided in the initial bailout generates liquidity, as any other bank would do, and uses the base dollars as the reserve.  Banks are normally required to hold a reserve to cover bad debts and poor performing securities and are not allowed to purchase junk bonds and high risk investments.  The $2 trillion is turned into $6 trillion in loans and grants and thus providing liquidity in a time of collapse of the economy.  That’s ok for the banks, they can fail and customers are bailed out by FDIC.  If banks do fail, it’s not based on the stupidity of knowingly purchasing bad debt. The Fed on the other hand has gone where no other administration has gone before and it has purchased inherently risky junk bonds and high-risk securities, so there had to be magical thinking behind the move. 

The move, along with the PPP, had personal incomes up for May, however it was all at the bottom end of the payroll structure due to wages rising.  Wages rose due to the lower paid individuals who are no longer counted, as they were the first to lose their jobs. In addition PPP provided $ and unemployment bonuses at $600/week which could have raised some incomes. 

The high rollers receiving the bailout monies are banking on the vaccine magically making the economy rebound with a vengeance and they put their monies in the stock market. This, along with the way corporations used the funds to buy back stock, may make the economy raise temporarily as Trump needs the optics for his re-election.  With all the liquidity out there in the marketplace the sugar high will fuel the rocket ship economy to new heights.

 The bailout monies in the PPP and the liquidity, did help consumer spending for May up by 17%, however that is only one way to look at the number.  Is it anywhere near the levels in January? And is up from a dip of 14% in April and still is nowhere near the high in January.  It’s all optics for this administration. 

A few things happened this week that makes me think they are not interested in public health only the optics.  Financial advisor Larry Kudlow spilled the beans when he said the virus will go away, with or without a vaccine.  

Mike Pence said the virus was not going to make a comeback and touted the economy, in a Wall street Journal editorial just prior to the June 20^th Tulsa rally, to calm the fears of their base.  This, when in surrounding states, the virus has increased to new levels of infections reported.

Without a vaccine and with a second wave potential the Apocalypse is upon us.  Will the King of Debt be more than willing to sacrifice run away inflation for his re-election?  The Bankruptcy King will be of no help, as the Federal Government cannot go bankrupt, however, it can, and has, printed money to the tune of 6 trillion dollars with no backing except public debt. 

I’m sure the bankruptcy king is advising Mr. Ed on how to squeeze the governors, which as a result of the virus, have seen their revenue streams disappear and are loathe to raise taxes.

Jerome Powell is the weakest link in Trump’s magical mystery tour. He has accommodated Mr. Ed and has at times resisted his pressures.  In John Bolton’s book he describes the president obsessed with his re-election.  He has fired any oversight in the Inspectors General and his administration has stonewalled any oversight by congress.

My take on this mess is this; Trump is doing all these financial machinations for the optics to have the wounded economy be magically appear to be revived with or without a vaccine and endangering public health by using a sugar high and printed monies that, if continued, will result in hyper- inflation and ultimately the apocalypse.

Mr. Ed still thinks the markets are the economy.  The S & P and the Dow Jones industrial Average or the (Dow) only have 530 corporations.  If the horsemen were to concentrate their efforts on propping up and favoring these 530 corporations and ignored the millions of other small businesses, has his optical illusion worked?

If inflation happens, Mr. Ed the king of debt will be joyful in that his repayment if his debt, because it will be subsidized by hyper-inflation with worthless $1,000,000 notes being printed and used as toilet paper as in the 1920’s to repay reparations from WW l in Germany.  Ask any European how that worked out?

Something tells me that Mr. Ed is not concerned with inflation as it has an inherent benefit to his holdings.  Either printing money or having excessive liquidity brings on excess demand. Inventories are depleted, goods become scarce,  and thus you have inflationary spiral.  Combine this with supply chains being altered and broken as a result of the world wide pandemic, thus prices could take a significant hit.

These are my candidates for the four horsemen Mr. Ed -aka the King of Debt, Wilbur -aka the Horse Whisperer aka Bankruptcy King, the Mnuchin Munchkin King of “too big to fail”, and Jerome Powell, plain ol’ someone that should know better.  All of the sycophants to Mr. Ed have Stockholm syndrome and Mr. Ed is keeping them alive.