Regarding the stock market and all the record movements, and where it will end up. Investors, feel free to take what I am saying here and go make millions of more dollars because you can literally take it to the bank. But the interesting aspect of it is in the revelation of values that are now maturing under the Trump administration which has been badly needed for so many years and 2019 will be a good year because of it. The part of it that will take some getting used to is that the usual panic button issues aren’t going to work this time and like the spell that kept Sleeping Beauty locked into a coma for so many years broken only by the kiss of a prince of a true love, the markets have been kissed by Trump and that value is escalating by the moment. The sabotage that the global chess game tried to impose have not only backfired, but fed the current optimism. Things are looking quite good indeed.
First of all, no real people care about the government shut down. Most of the jobs are nonessential and could easily be replaced by technology, so nobody is missing them, nor will they at any point in the future. The market fluctuations that have occurred since the election of 2018 are largely inspired by the volatility of the government with Democrats running the House of Representatives once again. Many fear that the good days from the last two years are coming to an end so they have moved their money in the markets. It hasn’t helped that we’ve learned about the various tech stocks in the Dow becoming liberal activists in the political process, which has turned off many investors. But that is a temporary condition that will improve as we move out of the Holiday season. Less government is better economics and people generally see that. The longer the shut down goes on the more obvious it will become and that will paralyze the Democrats going into 2019.
There has been a lot of talk about all the investigations that the Democrats are going to use against the Trump administration. Notice how since the looming shutdown approached and has now arrived that there hasn’t been much talk about the nothing there case of the Mueller investigation? Democrats had planned to spend the next two years impeaching Trump over breadcrumbs falling off the table but now coming into January they have to negotiate with him over the wall he’s building and where the money will come from. Trump has captured the narrative once again and has the potential to control it throughout all of next year. Democrats on their heels usually fall all over themselves and that will be the situation this time as well. The shutdown is good harmless leverage that the Democrats have no answer for. They are used to Republicans caving under the pressure but not this time. Being the party of government employees the Democrats will lose supporters quickly as the usual tactics fail and they are forced to watch the wall be built anyway which will be quite a demoralizing attribute to the current circumstances.
Trump’s refusal to punish the slain reporter from The Washington Post is starting to pay off as well. Fuel prices are low, the Saudis are considering themselves lucky to only be hit by the United States with low oil prices, which under any other circumstance would have been difficult to convince them of otherwise. The result for the American economy has been excellent fourth quarter sales and economic growth over 3%. Holiday sales are up and jobs are abundant driving up incomes. There is a lot to be happy about in the Trump economy which will continue to explode into 2019 on sheer momentum. The reality of the tariff battles is that China has had to make concessions as they are overly dependent on exports to the United States, so they have lost their leverage and will never get it back. Trump’s plan to deal with the huge deficit that the United States now has can be attacked through these shifting exports. There is a lot of money to be gained in renegotiating these trade deals and the results are finally going to hit the markets in the upcoming year. Mexico will pay for the wall in profit losses to the United States, and they will like it.
The Federal Reserve has been behaving poorly with their attempts to stave off inflation with interest rate hikes, that’s what they say anyway. In all reality the Fed has been trying to pad the pockets of bankers hungry for revenue with increased interest rates so they can make their money in what everyone has been considering a Bull Market. In the Fed’s way of thinking the Bear is right around the corner so they need to make their money while they can, which has put on the brakes to the potential growth that has been possible, much to Trump’s consternation. Its kind of like trying to drive a 1000 HP car with the brakes on. But the Fed has been confronted by the President which of course scared investors because nobody in the past has ever done such a thing and the markets were affected in the short run especially on Christmas Eve. But its all about negotiation and the market rallied back a thousand points the day after Christmas as a result. If everyone leaves things alone and the Fed keeps interest rates down, the Dow will head back to 26,000 and beyond, because the real market value is there. It’s more than a symptom of optimism from investors riding the trends. The value is real and growing in an expanding economy.
Then of course there are new markets entering the value stream, such as space tourism and regenerative medicine, industries I have discussed on this site for a long time. Finally, they are coming to fruition under the deregulatory environment of the Trump administration. There hasn’t been enough bandwidth for the media which hates President Trump to talk about all the great things that have been happening on these fronts since their goal has been to remove him from office. But with the government shutdown soaking up the news cycle which favors Trump the good news coming from the new market fronts will have room on the front pages and those industries will blossom for good in the coming years. How do you pay off a 21 trillion-dollar debt, you introduce new value markets that actually expand economic activity while putting money in the pockets of the people who will continue expanding it. And once they have a taste of that, they won’t want to give it back. Trump will win re-election easily in 2020 and the Democrats will struggle to even find a candidate to run against him. The government shutdown will further destroy the Democrats as their bluff is called and people discover that they really don’t need all those government workers. And the markets will rebound to their true value position once the artificial fears subside, because those fears were never rooted in reality anyway. Most fears never are. And that sets us all up for a good year, so long as we have the courage to live it.
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