It finally looks like the Republican party and Donald Trump may get its first victory if the tax reform bill that just passed the Senate gets through the House without too much compromise…
But that would be missing the bigger picture.
First, I was warning back in 2016 that whoever won the presidential election would end up wishing they had not. This bubble has been extended to much greater heights and can only stretch so far without destroying itself through its own extremes and imbalances.
My four fundamental long-term indicators – the Generational Spending Wave, the Geopolitical Cycle, the Technology/Innovation Cycle, and the Boom/Bust Cycle – all point down together, just like they did in the early to mid-1970s and the early 1930s – and we know what happened in those periods: the two worst stock crashes in the last century.
Here’s a chart to illustrate this…
So, no matter who got elected last year, they’re likely to see the next great depression hit on their watch. And there’s no way to get re-elected when the economy worsens during your term! Just ask George H. W. Bush. He got thrown out, despite being a pretty popular president, due to a minor recession in 1990-91.
What are President Trump’s changes of re-election if he’s in charge when a once-in-a-lifetime crisis slaps us in the face, dumps a catastrophic crash in our laps, and sends unemployment soaring?
Given that central banks have kept the economy limping along for years with something for nothing policies – soon to include tax cuts from Trump just when companies need them less than any time in history – these four fundamentals are leading us down a very dark path.
They don’t guarantee a major downturn, I’ll admit, but they clearly say that one gets much more likely during the next two to five years.
Adding to the growing risk is the President himself.
He issues an almost constant stream of divisive statements and policies. He’s picked fights with every one: other nations, the democrats, and the republican leadership. He recently alienated a huge swath of the Middle East, except Israel, with his pronouncement that Jerusalem is the capital of Israel… Why now pick that fight?
And over the last two years he’s slowly and steadily divided the Republican Party.
The first sign of the beginning of the end of the Grand Old Party was how Trump hijacked it against the establishment interests and the polls. He outsmarted them by realizing they were out of touch with the most-angry people in this country, more rural white people – and that those people are the “swing vote.”
And most recently he came out full bore in support of Roy Moore, despite the numerous allegations of serious sexual misconduct! He needed the man because he needs to keep that 52-to-48 advantage in the Senate.
That’s understandable from a strategic view, but the party just showed it would sell its soul to the devil for that… and now that looks even worse now that such strong last-minute support failed and Jones beat Moore by a hair.
When Trump became President, I predicted that he wasn’t likely to last his first year. Time will tell, but the divisiveness keeps growing and his ratings keep dropping, still scraping the bottom in the low 30s.
And there’s now a billionaire putting out TV ads and displaying them in Times Square calling for impeachment.
Even his ally and past advisor, Steve Bannon, doesn’t see Trump making it to the next election to even run again.
All of this while this stock bubble continues to stretch thanks to short-sighted something for nothing policies.
I’ll be surprised if the stock markets and the economy don’t start to implode by early 2018, right alongside the implosion of the Republican party. The negative trend in my four fundamental long-term indicators make this even more likely.
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