The big news this past week was that the long-anticipated Mueller report concluded that there is no evidence that Trump and his campaign colluded with Russia. This is after more than two years of Rachel Maddow blabbering on and on about Trump’s collusion with Putin. Will Maddow and the rest of the establishment media keep pushing this story, or will they find something else to obsess about?
Now that we are well into 2019, they can start talking more about the 2020 presidential election. They can cover the vast “choice” of Democratic candidates, each of whom wants to outdo the others with greater political correctness and greater socialism. Or perhaps the media will just find other stories to obsess about with Trump.
Trump Derangement Syndrome (TDS) is a real thing. People who hate Trump and obsess over Trump just cannot think straight. He has infected their minds. If they trip over the curb, they will find a way to blame Trump for it.
The whole Russia story was a hoax from day one. It served many purposes. It gave an excuse to Hillary Clinton on why she lost the election. It was an attempt to take down Trump, or at least keep him in check. It was also a way to prevent Trump from talking and getting along with Putin, just as he said in his campaign. Any motions of peace that could hurt the military-industrial complex were quickly met with accusations of Trump being Putin’s puppet.
Meanwhile, the whole investigation was a result of a fake dossier put out by Fusion GPS, which was being paid by the Clinton campaign. You have to wonder if Meuller’s report came out relatively clean for Trump because he didn’t want to risk exposing the real criminals, himself included. This whole thing was rigged.
Maybe Mueller made a secret deal with the Trump campaign. He would essentially vindicate Trump, as long as Trump restrained himself from certain activities. Maybe it was just a deal for Trump to keep his mouth shut about the real story. Maybe it included keeping establishment figures around, such as the execrable John Bolton.
In any case, it seems that the worst of the Russia story is behind us, although you never know. It was a seemingly good week for Trump, which drives the anti-Trumpers that much more crazy. Their desperation just grows.
The Bad News for Trump
While the Mueller report got most of the headlines, something happened in the financial markets that spells big trouble for the Donald. As I recently wrote, the yield curve inverted when comparing the 10-year yield vs. the 3-month yield. The last time this happened was in 2007, just before the major recession and financial crisis.
It is almost impossible to predict the financial markets, yet the inverted yield curve has been almost flawless. It’s not to say it couldn’t be wrong this time, but it is looking highly likely that we will be in a recession prior to November 2020.
This is bad news for Trump. The field of Democrats looks weak to me. Joe Biden can be likeable to some people, but he is probably more of a buffoon than Trump. Meanwhile, Sanders and all of the other socialist wanna-be’s would be a field day for Trump. He would just harp on socialism and the horrible details of the Green New Deal.
But if the economy is in a deep recession, Trump is not likely to win the election. The president does not have that great of an impact on the economy, especially in the short run, but it is the president that takes the blame (or credit).
The biggest problem for Trump is that he has taken credit for the supposedly strong economy. It was only in his campaign that he was warning about bubbles.
Trump will try to blame the Fed, but I don’t think it will work very well. He would be right to blame the Fed if he pointed to the loose monetary policy from 2008 to 2014. The problem is that he is blaming the Fed for raising rates too much. This will help in exposing the asset bubbles, but it would have been inevitable at some point anyway. If the Fed had not had a policy of raising its target rate and reducing its balance sheet over the last year or so, then maybe it could have kept things looking good for a little while longer.
Trump cannot do anything to stop a recession at this point. If it is going to happen within the next 18 months, it won’t really matter what he does. Unless he can convince the Fed to start QE4 right now, it won’t matter. And even if the Fed did start another digital money printing spree right now, it still might not be enough to delay a recession that long.
It amazes me how little attention the inverted yield curve gets, despite being the only reliable indicator for a recession. Most people are just unaware of it. Most of the rest just simply ignore it. We can hear about earnings reports, inflation reports, manufacturing reports, and every other statistic all day long. But for forecasting a recession, the bond market works best.
I have no idea how bad the next recession will be. But any recession at all will be met with the establishment media heavily blaming Trump. They’ll blame his tax cuts. They’ll blame his tariffs. They’ll blame not enough regulation. They’ll throw everything at him, and I don’t know if he will be prepared with a good response. Trump is not going to start teaching the Austrian Business Cycle Theory.