(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
May 14, 2020
( Free of charge to the people I met)
Punishment Lingers On
As long as the US dollar remains key international currency, the state of the US economy currently hit by coronavirus stays at the centre of world’s concerns.
The Federal Reserve (Fed) begun its quantitative easing (QE) in October 2008, in an attempt to save the US economy from falling even deeper into recession that itself was brought about by Fed’s excessive QE, carried out in response to the real estate bubble that went on since 2003, following the 9/11 attack.
The US stock market started to rally in March 2009 and this lasted until February 2020, when NY Dow hit $29,500 - the highest ever in its history.
Since 2017 all economists and scholars have been warning about the US bubble economy, advising Fed to slow down. Following their advice Fed raised interest rate four times in 2018, and the Fed’s Chairman, Mr. Powell, announced at the end of 2018 that Fed would go on rising the rate up to 2 - 3 times in 2019. President Trump, whose popularity depends on the US stock market, gone mad with Mr. Powell and pretended to fire him from the Fed.
In my Newsletter published around that time I stated: “Trump and Powell quarrel during day, but sleep together at night”. In 2019 Mr. Powell lowered the US interest rate 3 times towards zero, in total contradiction to his statement issued at the end of 2018.
Economists and scholars gave up, expecting this extreme market bubble to be corrected, and praying to God in heaven for help. The God answered by sending us the coronavirus.
Mr. Bill Gates did suspect an imminent outbreak of the coronavirus, but I think he’d just heard the voice of God - as I did!
All those economists and scholars, amongst whom I dare to count myself, have been insisting that the monetary bubble based on fake economy must be changed into one of realistic, self-sustaining economy.
Yet following the market crushes Mr. Powell kept doing whatever he could, while Mr. Trump kept spending well over the country’s financial capacity, to get the US economy back into the bubble.
Could it be, that God has corrected this fake economy in vain?
One sure thing is that having exhausted all their resourced the Fed has no more means and Trump has no more money for continuing to get the US economy back into the bubble.
What sort of bubble economy can one expect of a country, any country, in which 1/3 of its labour force become unemployed?
80% of the GDP, of the markets and of your own assets are fakes created by continuing printing of toilet-paper money. It will take another 3 - 4 years for this sham to be put right, during which we are facing a period called “Depression”.
All you have to do now is to plant potatoes in your garden and having left some to yourself, sell the rest at the street corner, to live on the proceeds.
Around the end of 2024, with some accumulated savings, you can start going back to stock markets and also buy yourself some jewellery, to make you look better than you really are.
A man will not do what he should, without learning a painful lesson beforehand, and then, when the pain is gone, will start chasing another sweet illusion, instead of planting sweet potatoes.
The stock market will hit another bottom in June, and will start climbing from July until November, just as Trump takes his last desperate monetary and fiscal measures.
From the start of 2021, having lost all possible means of monetary and fiscal control dictated by the US, the world economies are bound to fall into the deepest depression ever experienced, and that will last for another 3-4 years.
So once more: keep planting potatoes in your garden and selling them at the street corner, just to live on through the moment.
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Written by Toshio Masuda