The Dow Jones Industrial Average respected support at 20000, signaling another advance. Probably to 21000 but it could carry as far as the upper trend channel at 22000. Twiggs Money Flow troughs above zero indicate strong buying pressure.
* Target: 18000 + ( 18000 – 16000 ) = 20000
If the inflation devil does raise its head, it has more to do with the pumping of billions of dollars into the world economy over the last 10 years and a lot less about Trump’s policies now.
I read an article on Steve Bannon this morning; close associate and now adviser to President Trump. I liked what I read because it shows that these two guys have their eyes on the horizon, and for a Western government, are reading the terrain more accurately than previous governments for the last 50 years including Reagan’s.
Reagan and Thatcher could only see globalization as a threat and their policies were to cut and burn. The new regime is looking to revamp and modernize the entire US aging infrastructure. For a healthy and competitive US economy this should have been started decades ago, but previous administration were too dovish and short sighted.
This will make or break and there is many a slip between cup and lip but I am more excited and comfortable with this than I have been for many many years. I’m willing to go for the ride and see where it takes me.
I disagree. Trillions of dollars were pumped into the global economy to combat the threat of deflation caused by unwinding of the massive debt bubble that was allowed to grow over the last three decades. It achieved its purpose but the effect on inflation was negligible, CPI is still at benign levels.
Not that pumping all that money was a good thing. But, like chemotherapy, it may be bad but it’s necessary to cure a bigger ill.
Inflation is still benign but wage rate growth indicates the labor market is starting to tighten. Add a large fiscal stimulus to the mix and you may have overkill. If anything the infrastructure program should start at a measured pace rather than go for “shock and awe”.
P.S. Reagan and Thatcher were pro globalization but not the way it was implemented by crony capitalists at the expense of their fellow citizens. So I hope that Trump does succeed in draining the swamp.
P.S. I think Teddy Roosevelt had it right with “talk softly and carry a big stick”. Whenever the US strays from that path it seems to end in trouble.