by Martin Armstrong, Armstrong Economics:
This is the year of political hell. The question is not about supporting one side or the other. This is a time that calls for us not to be small petty creatures but a case that requires rational human beings, which seems to be more impossible with each passing day. Never did there arise a period that has witnessed any generation devolve into such agitations in political views surrounded by every considerable danger to our way of life and the survival of our government structure. The imprisoned winds of the Romans symbolized by keeping the doors to their Temple of Janus closed during peace and opened during war have indeed been let loose, but this is predominantly for civil war.
CONFIDENCE rules everything. It is critical upon what society believes. With all the turmoil in politics, even with the Congress in the hands of the Republicans, they still lack the votes for major reform. Then there is the rise of the left hell bent upon bringing down Trump at all costs to preserve the elite and status quo. The majority are generally fools. They actually believe the words of politicians to their doom.
Nevertheless, it is the unsettling disturbance within politics that reflects the crumbling level of CONFIDENCE. With that, all bets are off. Capital becomes confused. Looking at the Euro, the turmoil politically in Europe one would look to sell the Euro and buy dollars. Then we turn and look at the United States and all we see is incredible infighting and a battle waged by the left to prevent any populist reforms whatsoever. We hear politicians and the press demeaning the rise of “populism” as if the people are just fools who are clueless and do not really know what they are demanding. Thus, the political elites take solace, as does the mainstream media, that this too shall pass and they will be back in control. Meanwhile, the Euro flounders and rises to push out the shorts to confound traders as it must do before it can collapse.
Everything hinges upon this uprising in politics. The bitterness that is rising between left and right is the direct cause of the imprisoned wind of political change being unleashed.
The economic question to emerge from all this mess is rather simple. If we do not trust banks, government debt, and commodities remain under pressure from the rise in the dollar with increased production in oil and gold production reaching record highs in Australia during 2016, then where can we turn? While individual may be able to turn to gold, the big money and institutions cannot. Real estate declines in real terms for the majority of regions while it pushes higher in places such as Finland or some cities as foreign capital still tries to get off the grid. All of this contributes to the utter confusion and it really takes a global perspective to comprehend the trend for capital is rushing around the globe like someone blindfolded looking for the pinata.
Then when we look at entertainment, which typically soars in good times, we see that viewership is declining in sports to Hollywood. This too is a confusing trend to most but it reflects the underlying instability in public confidence. With both sports and Hollywood in decline, the omens do not appear to be bright and sunny looking forward.
Taxes have risen consistently in Europe, but to a greater extent compared to the United States. Yet still, in the USA, the burden of Obamacare, which was really a ploy to help big corporate hospitals by pushing the cost to the people, namely the youth, who the government also handed to the bankers removing all bankruptcy protect for student loans that deprive them of getting ahead to begin with in this economic race to the top.