Too Late for Trump?

BALTIMORE – We checked. We checked again. Nothing. Despite our recent open letter to him, the person not sending us an email was Donald J. Trump. But let’s check with the markets before we return to politics.


1-spx-earningsS&P 500 earnings growth rate as of Q1 – from bad to worse, but evidently no-one cares as long as the central bank confetti supply continues gushing- click to enlarge.


While the world’s attention is fixed on Mr. Trump, Mr. Market is playing it cool. U.S. stocks have barely budged for months. Yet the ground beneath the stock market’s feet is giving way. Corporate earnings are down 15% over the last two years.

And China – which economists told us was the “engine of growth” for the global economy – continues to dig itself into a debt hole as its order book goes blank. Meanwhile, U.S. home buyers are mortgaging themselves up again –  just like they did in 2007. And the average ratio of rent to income is also back at pre-crash levels.


2-china_debt_gdp-large_transChina’s growing debtberg – click to enlarge.


It’s hardly surprising. U.S. economic growth – if there is any at all – is leprous and weak, its spindly legs buckling under the weight of debt, cronies, and misleading price signals. Most likely, the economy will slip into recession in 2017.

This will pose a big problem – and a big, bogus opportunity – for the new president. Because the Fed is still fighting the last recession seven years after it ended. Its key rate is still near zero, with little room for more EZ money.

Only the pulp is left in the monetary orange; the next administration must react to the next crisis by squeezing fiscal policy. Most likely, President Clinton will get the crisis she wants. Then, she’ll be able to spend!  Spend! Spend!  Until the whole economy is coated in the sweet, sticky juice.

Wars at home. Wars abroad. Infrastructure “investments.” Subsidies.  Payoffs. We’ll hear a lot about “protecting families and children” and “keeping campaign promises.” And we’ll soon have deficits over $1 trillion a year. You go, girl!

What will hold her back? The conservatives are all gone. Congress is full of careerists and hacks. The press loves her; journalists give 27 times more money to her than to Trump. Nobel Prize winners back her. And the feds can borrow for practically nothing with the Fed providing the money!  What’s not to like?

Who will stop her? Now, “it’s too late” for Mr. Trump. That’s what the political commentators say. “Barring a near-miracle,” they hedge, “‘The Donald’ is finished.”


Carnival Palaver

All through the campaign, we half expected Mr. Trump to “get his act together”  and speak seriously to the millions of Americans who have been victims of the Establishment Elite, aka the Deep State or the Parasitocracy.

Several times he teased us with feints in the right direction. Mr. Trump sounded as though he might like to get the zombies off our backs and the cronies out of our pockets. He promised to cut taxes.

He suggested that maybe he would pull out of America’s pointless wars in the Middle East. He even floated the idea of term limits for members of Congress.

But there was never any coherent strategy or follow-through. And the showman was soon back to his usual content-free carnival palaver. Still, many of our smart friends got behind him, hoping he would shake up the system. Even we, like Rhett Butler near the end of the war, put away our cynicism and offered to help.


donald-trumpDonald Trump – entertaining, has potential, but so far fails to be sufficiently coherent.

Photo credit: Joe Raedle / Getty Images


With a little coaching, Mr. Trump could still shake things up – simply by speaking directly and honestly to the American people,  about money, war, and the Parasitocracy.

He could show a few simple graphs illustrating how the economy changed after the ’70s with runaway debt and declining income gains. And how the rich got richer while 90% of adults grew poorer.

And how our “wars” – against poverty, drugs, and terror – are losing propositions meant to transfer more money and power to the elite, at our expense.

He could even explain how government – like heroin and debt – is subject to the Law of Declining Marginal Utility, and how a little may be a good thing, but too much is deadly. Would this frank talk put him over the top?

We don’t know – but we’d like to find out. But so far, nothing from Team Trump. The Republic is doomed.


Charts by: Factset, IIF


Chart and image captions by PT


The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.



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4 Responses to “Is “The Donald” Finished?”

  • Hans:

    And whom will be President Trump SOS, why the one and only
    Julian Assange!

  • Miggy:

    Let me get this straight. They guy who garnered the MOST VOTES IN REPUBLICAN PRIMARY HISTORY needs coaching? Surely you jest.

    No candidate ever gives specifics in a campaign, political suicide as the hacks would bleed him to death.

    This guy has energized the base like never before and you want to give him advice? He has taken shots from all of the media, bought and paid for Republicans and Democrats alike, and just about every corrupt political hack on the planet and yet his rallies are HUGE.

    Articles like this never mention the rally numbers as this cleary blows a hole in all theories about Trump’s poll numbers.

    You just showed your hand by espousing the narrative lie that he does not have a chance. Last article I read on this blog.

    Trump 2016 (See you in January, Donald)

    • sufganiyah:

      It’s funny to watch Trumpbots getting triggered by any mention of a different perspective.

      “Last article I read on this blog.”
      And if Hillary wins, you will move to Canada, right?

  • May I disagree? having lived in USA for 40 years I think “the people” – like that line from ‘Colonel’ Jack Nicholsen in that movie as a Marine – just “couldn’t handle the the (naked) truth”. Yes, similar to what you are suggesting, I think a little more factual presentation of facts would do him well, but not a full barrage… would only scare folks.

    Personally, I confidently think Trump is going to win the election!! Not because I might like him, not because Hillary brings forth only loathing for her hyprocracy, but because I see the numbers when Trump makes an appearance versus the staged Hillary media shows; because I remember the silent majority for Tricky Dick; and because I see the signs of wavering in the biased media as their “polls” campaign.

    I will dare a step further: this self-centered crude a**hole will “grow into the job”!! Obama has achieved little, but he was a political hack from the beginning, and remains one. Trump, when surrounded by the pomp & circumstance will recognise “what he did”, what really lies before him. It will overwhelm even his gigantic ego.

    — Yes, you heard it here first: Trump will (if he doesn’t get shot**) go down as one of the great ones!!

    ** a real possibility should he win.

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