Magic Man or the Master of Disaster?

Thursday, 23rd January 2020

Magic Man or the Master of Disaster?

I must confess that I quite enjoy President Trump – albeit probably for all the wrong reasons….

Perhaps it is the spectacle of a man drunk on a heady mix of self-regard and bombast….

Or perhaps it is because the word preposterous might have been coined specifically to describe him….

President Trump has definite elements of the ridiculous about him. He is almost certainly a lunatic. And he is quite likely dangerous….

But he is also absurd. And that makes him compelling and amusing viewing….

  • At it again….

America’s Commander In Chief was at it again earlier this week….

Speaking at the 50th World Economic Forum in Davos, Switzerland – almost  in the same moment the American Senate was preparing to embark on his impeachment trial – Trump stood shamelessly before an audience of the great and the good and told them this….

‘America’s thriving, America’s flourishing, and yes America is winning again like never before….’ 

The implication was crystal clear. This position of apparent global dominance has been driven by a  ‘blue collar boom’ brought about by President Trump’s economic policies….

Apparently, the US economy was in a ‘dismal’ state when he took over from Barack Obama in 2017 – a reading of recent history that overlooks the fact that the longest-ever economic expansion in US history (still running) began under his predecessor in office, Barack Obama….

But let’s not allow tedious details to get in the way of an unremitting quest for personal glory. The king of fake news continued….

‘We have the greatest economy we’ve ever had in the history of our country….’

I don’t know what figures Trump consults. I suspect he doesn’t trouble himself with such trivialities. And – let’s face the brutal facts – a round of golf is much more fun than reading briefing documents….

But, for the record, under the Trump presidency GDP has weighed in at between 2% and 3% per quarter.

That’s a far cry from Bill Clinton’s economy – which hit 4%+ growth 4-years on the bounce….

  • The 30,000 Dow….

But what do facts matter in comparison to headline perceptions?

Most people see or hear the word ‘greatest’ and take the President’s assertion at face value. They take his claim for the actual deed – and that’s what really matters in a rolling 24-hour media world….

And might it be possible that Donald J Trump gets confused from time to time? Might it be the case that he conflates what’s happening in the US economy with what is happening in the US stock market?

US stock markets have never ridden higher….

Yesterday the Dow 30 closed at 29,186.27 – a little off last Friday’s all-time high but poised to go higher still….

The S&P 500 closed on 3,321.75 – also a little below the recent high-point but quite likely just pausing for breath before taking the next leap forward to a higher pinnacle still….

The latest issue of Barron’s magazine has a front cover that promises to tell readers ‘Why the Dow won’t stop at 30,000…. ‘

Contrarians might take that front cover as a direct signal that the stock-market boom is about to go into retreat. After all, history teaches us that the moment of greatest optimism is frequently the moment when things turn negative and go sour….

But right now, the US stock market is screaming ever upwards – like some rocket launched from Cape Canaveral. And Mr. Trump’s steadfast desire is to be directly associated with that roaring success. This US stock market is Donald Trump’s stock-market….

The United States of America…. the presidency…. the policies…. the economy…. the market…. they are all one and the same thing – the ‘greatest’. And Donald J Trump is the cornerstone on which the whole edifice is constructed….

  • The future….

Forecasts are generally not worth the paper they are printed on. We know that. And 95.6% of the time (industry figures) people who make forecasts end up looking foolish….

But what the hell….

Here at Money Truths we are made of strong stuff and we are not afraid to look as foolish as the next man. So, we broadcast our predictions of an uncertain future anyway and let the chips fall where they may….

My prediction is this: at some point – in the not-too-distant future – Mr. Trump will attempt to disassociate himself from the performance of the US stock market. I am certain of it….

Right now, Mr. Trump is the Magic Man. He can do no wrong. The economy? Sorted. The markets? Look at where I have taken them….

But when the markets go into retreat and the van veers off the road, Mr. Trump will be looking to get out of the driving seat and into the passenger seat before the traffic cops show up….

And the markets will go into retreat. The van will veer off the road. The wreckage will be surveyed. And questions will be asked. How did this happen? Who is responsible?

Trump won’t want to be seen as the Master of Disaster. And the establishment machine will go to work to see that it doesn’t become so.

The prints will be wiped; alibies will be constructed; evidence will be doctored; witness statements will be tampered with; some witnesses might even disappear in the middle of the night….

The usual suspects will be dragged out from the wings and flung front and center into the spotlight to take the hit….

The Chinese…. the Russians…. the Iranians…. the Mexicans…. the Democrats…. rogue elements of Trump’s own administration…. the ‘fake news’ media….

  • The real culprit….

We know how these things work. It hardly matters….

And truth be told, President Trump won’t be directly responsible when the market retreats – any more than he is directly responsible now for its current record-breaking performance….

When the end comes for the current bull US stock market – and the end will come – it will come as a result of the very thing that has driven the market to its current level….

And the effect will be felt all around the world….

It will be worse than 2008….

It might even be worse than the Great Depression….

There is a catastrophe waiting down the road. It is one that cannot be accurately timed. But nor can it be avoided….

But don’t worry. Tune in next time. I’ll tell you how the catastrophe was constructed. I’ll tell you will happen when it finally unfolds. And I’ll tell you what you can do right now to protect yourself from some of the worst effects.…

That’s the truth of it as we see it….

All the best,

Dave Gibson

Money Truths