Wall Street and Donald Trump

     Expressed as a percentage of GDP, the U.S. debt burden has always risen dramatically during wartime, reaching 110% after WW II and around 25% at the end of our 3 previous wars.  Then these numbers would trace a long and healthy cyclical decline.  Recently however, what we see as sovereign financing used to buy votes by one of the political parties has exacerbated the math to the point where it looks like our debt burden is, at best, never going to get paid off, so central bankers went ahead and nationalized the U.S. Treasury bond markets with ZIRP and NIRP, acronyms for old-fashioned money printing, used in large part this time to support resultingly mispriced financial markets.  Central bankers can only step out onto a playing field established by fiscal policy, so the spotlight for the mess really needs to be turned on Congress and the Administration, but hasn't.

     Interest payments represent the cost of borrowing money.  With ZIRP and NIRP, that cost is set artificially low, and the economic theory these people follow says they can keep overspending as much as they want this way, so they will unless somebody comes along and stops them.

     Enter Donald Trump.

     To us, the problem here is twofold.  The nationalization has marked securities prices up to overextended levels as investor money that used to go into sovereign debt, can't - the return is way too low - so increasingly desperate market participants have been bidding up everything else that provides them with decent, but less safe, income.  Concurrently, for many years now a currency war has systemically altered the amount of foreign earnings American corporations report to shareholders while pretty much the entire world has been gimmicking U.S. Dollar exchange rates to undercut our prices on goods sold from here.  Both sides to the problem may have set the stage for some kind of global recession/depression if the trends get reversed.  

     Looks like President Trump will be reversing both of them too, given what the candidate has said so far.  To us, that's why Wall Street adamantly opposes The Donald.  They've got a good thing going under socialized financial markets.

     Getting back to capitalism would ruin everything.