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Our Gandalf the Grey

Tuesday, November 22, 2016 1:23
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(Before It's News)

In Part One of this article I discussed the arrival of Grey Champions in previous Fourth Turnings; their attributes, deficiencies, and leadership skills; and why Donald Trump is the Grey Champion of this Fourth Turning – whether you like it or not. Now I will try to make sense of what could happen next.

“Our movement is about replacing a failed and corrupt political establishment with a new government controlled by you, the American people. The establishment has trillions of dollars at stake in this election. For those who control the levers of power in Washington and for the global special interests, they partner with these people that don’t have your good in mind. The political establishment that is trying to stop us is the same group responsible for our disastrous trade deals, massive illegal immigration and economic and foreign policies that have bled our country dry.

It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities. The only thing that can stop this corrupt machine is you. The only force strong enough to save our country is us. The only people brave enough to vote out this corrupt establishment is you, the American people.”Donald Trump

Seventy-year-old Donald Trump has assumed the Grey Champion flagstaff. In an increasingly chaotic world, normal working class Americans in flyover country were seeking a leader who could bring order, defeat the corrupt establishment, make tough decisions, and capture the zeitgeist of this moment in history. The ruling elite oligarchs and their fawning minions, occupying their strongholds in New York, California, Illinois, and D.C., are infuriated the peasants have dared to resist. In their secretive secure spaces, the elites are plotting with one purpose in mind – this uprising must be quelled.

They are now fanning the flames of discontent, funding professional protestors, and convincing the useful idiot college student millennials, Trump is dangerous to their future. It seems these mathematically challenged snowflakes have already forgotten about the $10 trillion of the national debt and $1 trillion of student loan debt loaded on their backs by the Obama administration in the last 8 years. This is not to mention the $200 trillion of unfunded welfare liabilities awaiting them as they graduate with degrees in LGBT Studies and great jobs at TGI Fridays in their future.

As the legacy corporate mainstream media outlets hyperventilate over Trump going to dinner without informing them, while scorning and ridiculing his cabinet selections (even when he hasn’t made them yet), this Fourth Turning chaotically churns towards its inevitable bloody climax. The current violence in the streets may be Soros funded domestic terrorism, but it still creates more anger, bitterness, and further unwillingness to compromise or meet in the middle.

This country is manifestly divided between red and blue, with the red geographically occupying 85% of the country and blue centered in the liberal urban bastions of corruption. There are multiple civil wars brewing below the surface, between the establishment and the people; left versus right; rural versus urban; Wall Street and Main Street; and the haves versus the have-nots. It hasn’t turned particularly bloody – YET.

It appears Trump’s cabinet will be filled with establishment insiders. Many of his supporters will be disappointed. The daily minutia flogged by the 24-hour cable news propaganda machines is meaningless in the broad expanse of a twenty year Fourth Turning Crisis. Every president ends up with Washington insiders in their cabinet. At the end of the day, it’s the president who sets the policy, decides what to prioritize, and sets the agenda for the nation. In the case of a Grey Champion assuming command in the midst of a Fourth Turning, events and his response to such events will dictate the course of the country and most likely the world for the next four or eight years.

The market reaction to Trump’s ascendancy has a stench about it. On election night futures dropped 800 points, but markets turned positive the next morning and haven’t looked back since. The stock market hovers at all-time highs. It’s almost as if the big swinging dicks on Wall Street decided to send a message – they are still in charge. It doesn’t matter who’s in the oval office, Wall Street calls the shots. If you cooperate and do as you’re told, the markets will ascend. If you attempt to implement any policy they don’t like, a crash will be manufactured (ex. TARP rejection by Congress). The currency and bond markets are in turmoil across the globe. Something is clearly getting ready to blow.

You can ignore the day to day gyrations, as the three core elements of this Crisis – debt, civic decay, global disorder – will produce a chain reaction implosion during Trump’s reign of power. The national debt is on automatic pilot to breach $1 trillion per year for as far as the eye can see. A $1 trillion infrastructure plan, rebuilding the military, building walls, massive tax cuts, trade wars and no spending cuts are a recipe for fiscal disaster. Trump’s advisors seem to be following Dick Cheney’s advice that deficits don’t matter. Steve Bannon’s documentary – Generation Zero – was based on the Fourth Turning, so you would think he would understand what’s coming next.

Interest on the national debt was $433 billion in FY16. That colossal amount was with a near record low weighted interest rate of 2.2%. In case you haven’t noticed the 10 Year Treasury rate has skyrocketed from 1.32% in July to 2.36% today. A 1% increase in rates across the yield curve will result in a 50% increase in interest on the national debt to $650 billion. Soc Gen’s Albert Edwards believes the current bond route could drive the 10 Year Treasury rate to 3.25%. That would blow a hole in our annual deficits. Isn’t leverage great?

The housing market was already rolling over due to high prices and stagnant household incomes. With mortgage rates jumping by 1% and possibly more, housing bubble 2.0 meets pin 2.0. Auto loan defaults were already surging, as every Tom, Shaniqua, and Julio in America got a new vehicle with a low payment lease or 7 years 0% loan. Over 25% of all student loans are not being repaid. The stock market bubble has been sustained by corporate CEOs borrowing to buy back their stock at all-time highs. Their corporate earnings have been falling for several quarters in a row and now the interest rates on their record levels of debt are going higher.

In addition, the USD is now at a 13 year high, up 10% since May and 30% since mid-2014. This will further weaken the profits of our global conglomerates. Making America great again by bringing back manufacturing jobs will be DOA if the USD keeps rising. It just so happens earnings are falling with interest rates and currency rising when stock market valuations are at record highs. The euphoria of the Trump victory will be short lived as the country officially enters recession and the stock market drops by 30% or more within the next year.

The civic decay already proliferating during and after the election will be exacerbated as bad debt wipes out financial institutions, corporations, and willfully ignorant consumer borrowers. The lesson of 2008 has already been forgotten. Rather than rolling out his grand vision, Trump will be dealing with a financial crisis which will make 2008 look like a walk in Central Park. Will he follow the same failed policies used after 2008 – NIRP, QE, and saving Wall Street at the expense of Main Street?

Or will he level with the American people, allow Wall Street banks to go bankrupt, let the free market purge the system of trillions in bad debt, tackle the unfunded entitlement liabilities, and have Americans endure a Depression in order to reset our economic system? It will take a Grey Champion with a high level of moral fortitude and courage to demand such sacrifice from the citizens of this country.

With the left already trying to provoke a race war, once the Depression takes grip and the social safety net of entitlements begins to fray, the civic decay in the urban ghettos will reach a tipping point. Cities will burn, looters will run roughshod as police refuse to enter lawless neighborhoods, and commerce will grind to a halt.

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The post Our Gandalf the Grey appeared first on LewRockwell.

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