Toshio Matsuda, Samurai Lecturer, Commentator & Intl Economist
(This issue is submitted to a Washington D.C., Seattle, and Zurich think-tank as the English edition of “Straight from Shoulder”.)
"Straight from the shoulder " by Toshio Masuda-Samurai Lecturer
Above is on those facts and my imagination
( Free of charge to the people I met)Worldwide misinformation concerning US economic outlook for 2020
There is little doubt that the current flood of headline news concerning the US economy has been manipulated almost entirely by President Trump.
Trump blames mass media for being the source of fake news, while in truth he is the top-class manipulator of information fed to the public, particularly those concerning politics and economy.
Trump is determined to win the presidential election in November 2020.
Forces that will decide the outcome of race for the White House are the Wall Street and the share prices.
No matter what happens to the US and the world economy, for Trump to win it is essential that the NY stock market keeps soaring, right up to the Election Day, in November.
On 5 February 2018 the President appointed Mr. Jerome Powell as the FRB chairman. Right from the outset Trump has never stopped criticizing his appointee and insisting on zero interest rates, while Powell kept raising the rates throughout the entire 2018. This battle of wills continues even now, when Powell has finally begun to lower the rates.
In the eyes of the general public Trump and Powell are like Dog and Cat; while in reality they are more like husband and wife.
The stock market can be seen as a fishpond:
When the amount of water increases and its level rises, the fish become livelier due to the increased oxygen supply.
Lower interest rates allow fish to swim more freely, in a friendlier environment.
Quantitative easing boosts share prices, while low interest rates create economic boom.
At present the US economy finds itself at a critical point.
Tight labour market pushes up hourly rates leading to increased consumer spending.
Unemployment rate is lowest to full, driving consumer prices up.
The coronavirus has slashed the imports from China-the biggest exporter to the US-creating scarcity of some goods, which again drives up the consumer prices.
Price Inflation in the US is imminent.
Powell should prepare for this and think about raising interest rates.
Yet Powell seems to be heading right in the opposite direction, which can only be explained by the fact that in reality he is the “devoted wife” of Trump.
Fed has the power to control the pond water level, no matter what.
Consequently, we shall see the Dow rising to $40,000 around the Election Day.
So why not take advantage of Trump’s shenanigans and the behavior of Fed, which heedless of the real state of US and world economy juggles the monetary policy to suit Trump’s interests?
It is virtually certain that the year 2021 will mark the collapse of the US stock markets.
My advice is: make money now, and enjoy luxury life in 2021, when hordes of investors (excluding of course the readers of Straight from the Shoulder) will be gasping for breath!
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Toshio Masuda: email@example.com
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Written by Toshio Masuda