WARNING: if you like Trump, please do not support him based on the current state of the economy.

in #economy7 years ago (edited)

Not for a second.

I sympathize with Trump. But the truth is the US economy is heading to a crisis. Many "Austrian" economists (Austrian School of Economics) have been predicting for a long time. Hard to summarize, but it's something like this: For decades the FED have been lowering interest rates. And since the creation of new money under the actual system depends on taking credit (yes: every dollar bill is also a debt) that lower interest rate fueled consumer spending and bubbles everywhere, and of course... debt - individuals, corporations and the government; everybody is heavily indebted now. That was only possible because the US exacerbated the dollar's status as world's reserve currency. But at some point, sooner than later, this will change, because in order to roll the record debts we have now, interest rates must remain (and are been kept) artificially low. That's only possible by a mechanism that in the end of the day means printing more dollars (adding more debt to a debt problem). Eventually, the dollar value will be compromised. What happened in 1980 and 2008? The FED raised interest rates to restore confidence in the dollar, in the system itself. Now they simply don't have where to cut. And, even more serious, the whole US economy (like many others in the Werstern world) rely on debt to function and on the purchasing power of the dollar. Notice that the "world reserve currency" status ended up harming the american manufacturing sector, and you may easily realize how serious this is. The end result will be a monetary, economic, financial and social collapse much greater than the last one, because the numbers are much greater now.

Blame the FED and all presidents who did nothing to stop that (Clinton, Bush, Obama and now Trump, although in a lesser extent); this problem was created many decades ago. There's nothing Trump could do except to stop the printing. But that would bring the crisis, and the political cost to do it is too big. Anyway, it's coming. I doubt Trump will be able to pass this problem to his successor.

I'm writing this because if that happens under Trump administration (likely), capitalism and conservatives will be blamed, although this is the result of government intervention (through the Fed) in the economy. Absolutly nothing to do with a real free market. But we know how political propaganda works.

Trump economy.jpg

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