BELLIGERENT, BOMBASTIC, PARANOID
Belligerence is variously described in online Dictionaries as “unfriendly and aggressive feelings or behavior”, “the state of fighting a war or the act of going to war”. Some “related words” are “aggressiveness, antagonism, pugnacity, truculence, bellicosity, aggression, animosity, hostility, argumentativeness, pugnaciousness”.
Bombastic is described as “marked by or given to speech or writing that is given exaggerated importance by artificial or empty means”.
Paranoia is “a tendency on the part of an individual or group toward excessive or irrational suspiciousness and distrustfulness of others”.
BOOM will make no further comment on those words or their definitions. Moving on to analysis …
TRUMP SAVING AMERICA?
Geo-politics is an important element in international macro-economics and it was at center stage last week. Nearly all the events centered on the President of the United States. He was in an increased oppositional mood to China, Iran, Syria, Turkey, European Union and his own US Congress. His most outrageous position was the continued threat to destroy the economy of Turkey. It is important to remember that Turkey is the second largest military force in NATO (the North Atlantic Treaty Organization) and is an essential ally and Geo-political bridge between East and West, between the Christian and Muslim worlds.
On 8th October, he Tweeted — “As I have stated strongly before, and just to reiterate, if Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the Economy of Turkey (I’ve done before!).” On 17th October, just last week, he said to Turkey — “you would have lost millions and millions of lives” (presumably if they had not agreed to cease recent military actions in Syria). Does this mean that he was prepared to decimate Turkey with nuclear weapons?
BOOM cannot think of more belligerent, bombastic statements ever coming from a world leader in recent history with the possible exception of Adolf Hitler. And, incredibly, these statements were made to an important ally. Some may argue that Fidel Castro offered similar sentiments publicly but that was always from a position of relative weakness and therefore was clearly rhetorical in nature. Nikita Khrushchev had his moments as leader of the USSR, banging his shoe on the UN podium, but his belligerence always seemed tinged with an air of thespianism rather than genuine opposition. But Trump has the largest military and financial forces on the planet at his fingertips and he does not seem to be a capable actor. Thus, his flourishes cannot be seen as purely rhetorical.
BOOM admires Trump in many ways. He is trying to extricate the US from many of its foreign military adventures. He is trying to open up debate about the rationale behind these military actions. He is trying to protect his nation’s borders. He is warning the nation about the biased and unstable mainstream media in the United States which he calls “Fake News”. He is warning the nation about the dark and unelected, uncontrolled forces inside the so-called “intelligence” operations of the CIA and the NSA. He appears genuinely concerned about the deceased US soldiers returning home in flag draped coffins at Dover Air Force base in Delaware. He has been willing to expand the Federal Budget Deficit rapidly over and above $ 1 Trillion per year in order to support the economy. He appears concerned for the manufacturing and agricultural sectors of the economy.
However, he is not sufficiently thoughtful in regard to leadership or strategy, is impulsive, abusive, over-confident and ill-prepared. That would be bad if he was leading a business but now he is the leader of an entire nation. Learning the skills of leadership on the job is not something that a US President should be engaged in. He (or she) should have a long history of thoughtful, inspiring leadership before running for office.
Unfortunately, the US political system has been failing for many decades now in bringing forward such men and women.
BOOM cannot think of a US President that can be admired for thoughtful leadership since John F Kennedy with the possible exception of Jimmy Carter and Ronald Reagan in some respects.
The list since Kennedy’s untimely demise is uninspiring to say the least — Lyndon Johnson, Richard Nixon, Gerald Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, George W. Bush, Barack Obama. All of these men led America on erratic courses especially in military adventures. Some have been besmirched in deep personal failures of a moral kind. All have overseen the steady demise of the US middle class and the growth of poverty with over 40 million Americans now still dependent upon the SNAP Food Stamps program for their survival and with vast amounts of American infrastructure in urgent need of Federal attention.
The failed Presidential candidates list is equally uninspiring — Hilary Clinton, Mitt Romney, John McCain, Sarah Palin, John Edwards, Al Gore, Bob Dole, Dan Quayle, Michael Dukakis, George McGovern, Barry Goldwater, Richard Nixon. Many of these were clearly not up to the task and thus were defeated soundly at the ballot box. Presidential elections have tended towards being “least worse” competitions.
The result has been a major nation wandering from failure to failure but always demanding to be considered as the leader of the advanced Western nations. The patience of its allies has been sorely tested over the years and that patience is clearly wearing thin over the last few years. The major European allies, in particular, have recently indicated that their patience has a limit. So what did Trump do last week? He increased Tariffs by 25% on many goods imported from Europe into the US. And he demands that they increase their buying of US military equipment as a matter of course. This is not how to “win friends and influence people” as Dale Carnegie would have said.
THE NEW ERA OF SECRET LAW
A worrying aspect of all of these ill-considered Executive Branch actions is the threat it implies to the institutions of democracy inside America. If the institutions of democracy cannot protect the people from its leaders, then Democracy itself must be considered to have failed.
Is America heading towards a Totalitarian State? Can the President suspend Congress and rule alone?
Elizabeth Goitein, author of a 2016 report called “The New Era of Secret Law”, made this statement in an article in The Atlantic magazine this year (January/February 2019) — “The moment the president declares a “national emergency”—a decision that is entirely within his discretion—more than 100 special provisions become available to him. While many of these tee up reasonable responses to genuine emergencies, some appear dangerously suited to a leader bent on amassing or retaining power. For instance, the president can, with the flick of his pen, activate laws allowing him to shut down many kinds of electronic communications inside the United States or freeze Americans’ bank accounts. Other powers are available even without a declaration of emergency, including laws that allow the president to deploy troops inside the country to subdue domestic unrest.”
The Alarming Scope of the President’s Emergency Powers —
The New Era of Secret Law —
PUTIN VISITS SAUDI ARABIA AND THE UAE
Meanwhile, last week Vladimir Putin, President of Russia, was welcomed by both Saudi Arabia and the United Arab Emirates on a State visit, the first in 10 years. He signed important business agreements and had extensive discussions with the leaders of those nations. There was even a performance by Russia’s Tchaikovsky Symphony Orchestra. Clearly, Russia’s strong diplomatic efforts and decisive action in Syria appear to be resulting in positive outcomes for the future stability of the Middle East. Russia is also developing close ties to Israel, a fact often overlooked. Israel has almost a million citizens of Russian descent.
CHINA GDP GROWTH AT 6%
The Chinese economy grew by 6% year-on-year in the third quarter. This is exactly in line with BOOM’s expectations.
In economics, things work until they don’t. Until next week ………… Make your own conclusions, do your own research. BOOM does not offer investment advice.
EMAIL: gerry [@] boomfinanceandeconomics.com
Return to the BOOM Main Website – BOOM Finance and Economics at http://boomfinanceandeconomics.com/
HOW MOST MONEY IS CREATED
BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)
THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
How is Most New Money Created ?
LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).
From the Bank of England Quarterly Bulletin Q1 2014 —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.“
Quarterly Bulletins Index
Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.
On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —
“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”
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