POITOU, FRANCE – What a rollicking good time we’ve had these past few days.
The G7… the North Korean summit… Canada’s “backstabber” chief… trade wars… U.S. midterm elections…
Did any generation before us enjoy so much cheap entertainment?
Place in Hell
The highlight was probably Peter Navarro’s comment, referring to Canadian Prime Minister Justin Trudeau, that “there’s a special place in Hell for any foreign leader that engages in bad-faith diplomacy with President Donald J. Trump…”
This seems to represent yet another remarkable extension of executive authority. The White House has already taken upon itself the power to decide, without any input from Congress, when the U.S. goes to war, and with whom.
It also seized the power to set the terms of trade with other nations… and even to determine the fate of a single foreign company, as it did with Chinese telecom firm ZTE, which was banned from purchasing equipment from American companies.
And now, it’s taken an unprecedented step towards total, unbridled power. Up until now, it was God who determined who went to Heaven or Hell. Now, apparently, it is America’s duly elected president.
Later, Navarro even bungled his apology, saying that his “mission was to send a strong signal of strength.” Then, on the heels of this gibberish, rather than admit that he had been talking nonsense, he said that his “language was inappropriate.”
But it wasn’t the language; it was the thought. And it wasn’t inappropriate; it was simply dumb.
So much delicious noise… all sound and fury… signifying nothing, of course.
But very entertaining.
On the front page of Monday’s Financial Times was the obligatory distracting headline:
Trump’s snubs at G7 summit leave closest allies in turmoil
The FT, which calls itself the “world’s leading global business publication,” is positively horror-struck.
It is the voice of the international Deep State elite, the people who run the banks and major companies, work for finance ministers, or have tenure in the economics departments of leading universities.
The FT readers don’t go to NASCAR races. They don’t watch pro wrestling.
They send their children to business schools. They attend conferences on global climate change and equality in the workplace. They talk the talk of the global elite and fear the barbarians at the gate.
And they know Navarro is a moron.
But they share the same political theory. The way to build a better world, they believe, is to force the other guy to change.
Cometh the Great Barnum himself… Donald J. Trump… and they are rendered speechless, apoplectic. Here is someone – the President of the United States of America, no less – who insists that they do the changing.
“Trump goes rogue…” begins an FT editorial. “In the end, it would have been better if President Donald Trump had carried out his threat and declined to attend the summit…”
The global elite see their cozy world upended. All their favorite acronyms – TPP, NAFTA, WTO, ICJ… even the EU itself – are under attack.
The G7 may become the G6 as the U.S. walks out. And then, without the big boy, the group becomes the G-Zero, as Team Donald quickly pointed out.
Meanwhile, over on page 12, the FT offers an Investment Management Summit on “Rebalancing Return and Risk Amid Global Recovery.”
Our advice to readers eager to attend is to flip ahead to the next page. There, they will find out why the headlines are nothing but distractions…
…and why “global recovery” – whether pitched as dignified fraud by the FT or as blustery BS by Donald J. Trump – is a mirage.
For there, on page 13, is a photo of “Super Mario” Draghi, formerly of Goldman Sachs and lately of the European Central Bank.
It was Draghi who said, famously, that he would do “whatever it takes” to save the financial system the elite had created.
“A rising tide raises all boats,” is the old expression. Following the crisis of 2008-2009, Draghi, Yellen, and practically all of the world’s central bankers got to work and flooded the markets with a sea of cash and credit.
Draghi added some $2.7 trillion over the last 43 months. The Fed added nearly $4 trillion.
But the tide raised some boats more than others. Yachts owned by bankers, stock market speculators, hedge fund managers, and FT readers, generally, have never seen such high waters.
But the container vessels, the oil ships, and the fishing boats – the working barges, skiffs, and slow-moving tugs of the real economy – have barely gotten off the bottom.
U.S. GDP was nearly $15 trillion in 2008. Now, it is almost $20 trillion – an increase of about a third. Stocks, however, went up from a low of around 8,000 in the fall of 2008 to over 25,000 currently.
That’s an increase of more than 3 times… or about nine times more than Main Street growth.
And now, Mario Draghi, following the lead of the Fed’s Jerome Powell, is turning off the spigots.
The EU wants to return to “more normal financial conditions,” says the FT. Both the FT’s Deep State elite and the Trump administration’s new insiders believe the economy is booming.
They think its bubble hide is tough enough to resist the pins of “normalized” monetary policies, trade wars, shooting wars, trillion-dollar deficits, the growing social welfare needs of aging populations… and a carnival of claptrap that goes on 24/7.
So far, they’ve been right.
But when the bubbles pop, they could find that there is a special place in Hell for them, too.