The Gift That Will Give Us Even More Donald

By David Stockman  |  March 28, 2019

Beware; for I am fearless, and therefore powerful.

– Mary Shelley, Frankenstein; or, The Modern Prometheus (1818)

After all that, it turns out John Brennan is the dog that got scared by his own fart.

The former CIA director said on MSNBC Monday he “suspected there was more than there actually was” to collusion between Trump’s organization and Putin’s Russia in the 2016 presidential campaign. (And Morning Joe is still telling him he’s a good boy…)

Meanwhile, a powered-up Tweeter-in-Chief is growing into the Imperial Presidency.

He’d already bullied Jerome Powell and the Federal Reserve off “normalization” and back on “easy money.” And he’d long ago left Warfare State questions to the cabal of B-team neocons atop his national security apparatus.

Emboldened by exposure of Russiagate as nothing more than a nothingburger, he’s really throwing the weight of the State around. He’s agitating for more investigations of his political opponents. He’s demanding that a duly elected Member of Congress be forced from office. He’s sending lists of enemies to the news media.

Meanwhile, he’s still taking credit for a phony economic boom. In fact, he’s proposed another preposterous federal budget that relies on ahistorical, innumerate, and ridiculous growth forecasts.

Indeed, it seems the only thing capable of bringing him down is the end of the current recovery.

We’re on the verge of month No. 117 of the second-longest uninterrupted economic expansion on record. It’s also the weakest in history. It’s going to end… and the incoming data suggest that’ll happen sooner rather than later.

It’s “The Donald versus The Recession”…

Let’s look at some economic indicators – well, one indicator with a lot to say…

The industrial production index for manufacturing, for instance, is rolling over. And that’s just the beginning of the story.

Here’s the thing: That measure now stands only 2.4% higher than it was in November 2014 during the last global commodity/trade/production uptick. Even worse, it remains 2.5% below its pre-crisis peak of December 2007.

When the entire manufacturing sector of the U.S. economy is still measurably smaller than it was 11 years ago, that ain’t no boom…

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That index’s internals are even shakier – and they get to an essential truth of this entire era…

February production of consumer goods was actually down by nearly 2% from where it was in April 2018. And it’s still 6% below its October 2007 pre-crisis peak.

The only solid gain in the entire industrial production complex is for oil and gas extraction, driven by the “Shale Boom.” But that, too, is a bunch of bullshit. It’s simply another unintended consequence of monetary central planning.

The Federal Reserve’s massive financial repression has sent fund managers scrambling for yield. They found it, to the tune of several hundred billion dollars in the profitless shale patch.

When the impending worldwide recession causes petroleum demand destruction and global oil prices collapse, the domestic shale industry will be left high and dry.

Negative cash flows will get worse. And there will be nowhere to get the huge amounts of capital necessary to offset the already drastic production decline rates in that particularly high-cost part of the energy patch.

That’s the essential truth: The “Shale Boom” – like the “Trump Boom” and all the others – is floated by “Bubble Finance.”

It’s because of the Acela Corridor’s elites that we even have a “President Donald J. Trump” occupying the Oval Office in the first place.

The increasingly obvious Deep State’s friends in the self-evidently complicit Mainstream Media did him a huge favor by blowing up beyond all reason what happened with Russia in 2016.

They’ve handed him yet another “sugar high.” And this one might be enough to get him to November 2020 and another four years in the White House.

We’ll see if the power of the Donald’s Imperial Presidency allows him to be the one to finally outlaw recessions…

Reality Check

Desperate times call for… “common sense” measures.

And these are desperate times… Markets are corrupted by monetary central planning. They’re confused. And the road back is going to be treacherous.

We’re looking at a major re-pricing for all financial assets. And thousand-point intraday or day-to-day swings are part of that equation. Those can be frightening… for “buy and hold” investors.

I have a different approach, one that combines strategy and tactics into a plan flexible enough for you to survive and thrive amid the coming chaos. It’s called “The Stockman Model.”

All we’re after is a little stability, perhaps a chance to pocket a windfall when opportunity presents…

To common sense,

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David Stockman

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David Stockman

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR