No Stimulus for Trump

This week was again a risk-off week with stocks and commodities down while gold and T-Bonds gained. And this week my IDW also ticked a bit lower.

While I have to a great extent joined the inflation crowd, there is no denying that the massive amount of debt in the system is profoundly deflationary in nature. And with Nancy Pelosi’s Democrats not wanting to do anything to make the life of Americans better until after Biden wins the election, they are not in the mood to help Donald Trump enact another spending bill to relieve the pain of millions of people unable to pay their rents.

I believe Lyn Alden is right when she tweeted out the chart on your left and concluded that “It would likely take far more deficit spending than has been spent, to cause notable inflation. The amount of debt in the system still overwhelms printed money. In other words, the current red bubble is still small and just starting, vs. the previous multi-year red bubble.

I have to believe the Fed wouldn’t be sad to see Trump and his brand of Republicans being taken down because there is no more willing and able institution to fuel the “deep state” than the Fed. It’s hard to see how a Democrat controlled Federal Government wouldn’t spend trillions upon trillions to welcome the world’s hungry people of color into the country while watching Hillary Clinton’s white deplorables starve to death, not unlike what Stalin did to the people of the Ukraine—as told in one of the best movies I have ever seen, titled Mr. Jones. (I highly recommend it because it mirrors much of the propaganda taking place from the American Left right now.) So what I’m suggesting is that a real serious bout of inflation may not take place until after a Democrat victory in November.

On the other hand, we shall see if the Fed and Congress can wait until President Harris takes over because, as Alasdair has been opining, there are a growing number of banks that are in trouble in Europe. Moreover, Michael Oliver’s chart work this past week suggests that American banks are in trouble, evidenced by the bank ETF, KBE chart shown on your left. The Fed doesn’t care about the American people but it does care about its shareholders, the major bankers. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.