Are U.S. interest rates indicating a declining economy?

U.S. ECONOMY IS OUTPERFORMING REST OF WORLD

INVERTED YIELD IS NOT ALWAYS A SIGN OF RECESSION

Much has been made of the fact that interest rates on long term rates had a lower yield than short term rates. It has been stated that every previous recession was preceded by an inverted yield curve. While this may be true, what has not been stated is that not all inverted yield curves have resulted in recession.

This hullabaloo is a knee jerk reaction without exploring the facts of why this has occurred. When the U.S. reduced corporate tax rates to be competitive with the rest of the world, it changed the economic balance in the western economies. Our rates were not made lower than theirs, just put in line, so U.S. corporations did not have a built in handicap. There also were reforms of oppressive regulations. 

We have since witnessed a resurgence in the U.S. economy, unemployment at all time lows, U.S. savings rate has increased to 8% from a number that was near 0. Growth has been steady in the 2.5 to 3% range. The biggest obstacle for U.S. companies is finding enough qualified employees to grow their businesses. Wages, especially at the lower income levels has been rising at over 3%. Many of these wages were flat for the last decade.

The economies of western Europe on the other hand are struggling to keep from declining into recession. They are continuing with the same old policies of reducing interest rates to stimulate their economies. There is very weak demand in all those countries. Take a look at their present interest rates.

Central Banks	Current Interest Rate	Next Meeting	Last Change
Reserve Bank of Australia	1.000 %	9-3-2019 - 04:30	7-2-2019 - 04:30
Federal Reserve	2.250 %	9-18-2019 - 18:00	7-31-2019 - 18:00
Swiss National Bank	-0.750 %	9-19-2019 - 07:30	1-15-2015 - 09:30
European Central Bank	0.000 %	9-12-2019 - 11:45	3-10-2016 - 12:45
Bank of Japan	-0.100 %	9-19-2019 - 02:00	1-29-2016 - 03:00
Reserve Bank of New Zealand	1.000 %	9-24-2019 - 21:00	8-7-2019 - 02:00
Bank of Canada	1.750 %	9-4-2019 - 14:00	10-24-2018 - 14:00
Bank of England	0.750 %	9-19-2019 - 11:00	8-2-2018 - 11:00

So, if you were an investor, would you be more inclined to purchase U.S. bonds or European bonds with either 0 or possibly negative return. Switzerland, Denmark and Sweden all have negative returns of up to -.75. Denmark has just introduced 10 year mortgages with a negative interest rate. Sounds like crazy desperation.

So what we have is a rush to shift assets to the U.S. both in the bond market and the stock market, because returns in most of the developed world are very poor indeed. The U.S. federal reserve will soon be forced to lower their rates, not because of a week U.S. economy but because of a strong economy and too much of a difference between rates.

 This has also increased the value of the dollar compared to other currencies making imported goods cheaper for U.S. importers, but making it more difficult for U.S. exporters.

 The federal reserve also needs to scrap their link between increased wages and inflation. If they are going to raise rates to keep wages low that is not in the best interest of workers or the country. 

When they do reduce rates we will hear the back benchers in the media and the dems declare that the economy is failing, it is not true.

Western Europe needs to rethink their fiscal policy, why not reduce taxes and regulation rather than interest rates? This will be hard for them to swallow as their goal has always been more government control.

There has been an organized effort by Democratic candidates and some in the business world who are fearful that real free trade will cut into their profits. They are used to buying very cheap in China and selling into our strong consumer market. They have pushed policies that would subsidize displaced workers with things like guaranteed incomes,so that consumers could still have resources to buy their products without experiencing the dignity of work. Democrats live on dependent, vulnerable people, if the whole country would prosper it would be severe threat to their power.

So, we can expect to see an attempt to to talk down the economy, to attempt to convince people they should forgo future spending and hope they can engineer a slow down for political purposes. There is no limit to how low they will go in their quest for power.

Time for U.K. to start trade talks with U.S.

SHOW EU AND WORLD, BREXIT IS HAPPENING

OFFER TO INCLUDE CANADA AND AUSTRALIA

Boris Johnson should hit the ground running and openly endorse opening free trade talks with the United States.This could possibly be opened up to include other friendly allies. This would send a clear message to the EU that the U.K. is moving forward with Brexit whether there is a deal with the EU or not.

The U.K has more of a strong position then the former leaders understood. It is likely when the EU sees that they may be not only loosing a valuable part of their Union, but also now a competing trade block is possible, they will have to make a big decision. Do they want to be left on the outside or negotiate an agreement that is acceptable to all?

As far as Ireland and Scotland. Does anyone believe they would rather be aligned with the EU than a U.K, U.S. agreement? Let them debate and make their decision.

The U.K was once a leader of the world. They need to stand up and show all they they are willing to do what is necessary to preserve their independence and freedom and regain control of their own destiny.

They need to focus on the opportunities possible for their own future. They are in a strong and unique position to be the the financial and economic link to the world. It is now time to go forward without fear.

Only point of unity is hatred of Trump

HAS DEMOCRAT MELTDOWN BEGUN?

CIRCULAR FIRING SQUAD TO BEGIN THIS WEEK

Poor Joe Biden is now becoming the target of the rest of the democratic candidates. They almost all slammed him for reminiscing about a time in the U.S. Senate when people could disagree on issues, but continue to work together. This is now considered unacceptable by his opposing candidates. We will see if he stands his ground or decides to apologize, either response will be considered unacceptable.

It seems the Democrats are still expecting to run under the Obama strategy, which is to encourage maximum racial division to maximize the African-American vote. They must be feeling insecure about this vote as they are now endorsing a reparations plan. Trump has been touting a historic low unemployment rate. I guess reparations sounds like a better deal than a job or opportunity. Are we now going to see a bidding war by democratic candidates to see who will promise the best deal? The chances of any reparations becoming a reality are slim and the more sophisticated black voters may very well see this as a fake issue to garner their votes.

It looks like the media and Democratic establishment are already dressing up Elizabeth Warren as their back up candidate if Biden cant get it done.

The Democratic debates will prove interesting, it seems the DNC has already grouped their candidates with a warm up group on the first day and their headliners on the second day. It may get testy by the time of second debate after they weed out more candidates.

Bernie Sanders is still the best campaigner in the bunch, he may very likely get a boost after the debates. He scares the hell out of the Washington establishment. if he would actually win the nomination, watch as they try to place their candidate as vice-president.

Their most intelligent and well spoken candidate is Mayor Pete, but it is doubtful the country is ready for a first husband in the white house.

It is doubtful Biden is ready for the marathon of a presidential race, any more stumbles and he will be jettisoned by the media and the establishment. He is without a doubt the choice of the Washington establishment and the never-Trump republicans, who still exist, but have been driven underground by the Republican base.

Trump's announcement rally went off like a fireworks display, it was taken notice by his opposition both in and out of the party. This will be the wildest campaign in history. The Democratic candidate better be tough and innovative.

You can also bet that this week of Trump has also been noticed around the world. Anyone who has been listening to the ex-Obama administration people, promising to give them a better deal when they replace Trump, may be more inclined to make deals with Trump now. You can bet that Trump will be conveying to his opponents and trading partners that he may be a lot tougher in a second term.

Democratic impeachment jitters

ARE DEMOCRATS NOW AFRAID TO TAKE THE BIG PLUNGE?

OR IS THIS JUST MORE INSURANCE IN CASE THEY LOSE AGAIN?

Democrats and the media have been talking impeachment since Nov. 8, 2016. Now they are at the crossroads of their life and they just can't pull the trigger. If they are so sure that Trump has committed high crimes, why the apprehension?

Trump has been under the microscope since that infamous escalator ride now 4 years ago. He has been scrutinized and talked about endlessly.

The Washington Post hired 20 extra reporters just to attempt to dig up dirt on Trump. 

The Democrats and Hillary enlisted the aid of intelligence agents in England, Australia and Italy, finally settling on a dossier written with the aid of Russian sources.

The New York Times and the Post published every rumor and snippet supposedly leaked by unnamed sources in the Federal Government.

The special prosecutor had 40 FBI agents follow every lead for 2 years and emotionally tortured Trump  associates, yet the proverbial smoking gun is as elusive as ever. The best Mueller could do was plant more innuendo that Trump may have obstructed his investigation, even though he took 2 years, $40 million, interviewed everyone he wanted to, except Trump, raided the homes of his lawyer and counselor, wrote up 400+ pages of reports that most people will not even read, yet was unwilling to pull the trigger on a direct accusation. Probably because he has realized he has spent 2 years of his life on a wild goose chase and may yet to be discredited for his efforts.

Come on Democrats, get some balls and go over the cliff in your desire to destroy Trump and his supporters.

While the new Democrats, hardcore Marxist ideologue's would do it in a heartbeat, they are willing to jump at the first opportunity, their more seasoned progressive leaders got the heebie jebbies, just thinking of the possible consequences. They know that the Republicans are watching closely and the vast majority will have nothing to do with this. They know that they could very well be consumed by their own hate.

That is just the obvious, then there is the coming Inspector General report, and the new Prosecutor's investigation. They know that the Inspector General cannot indict, cannot subpoena former government employees. It is likely that the New prosecutor knows whats coming and has full power to subpoena and indict, that very well may be the reason for his appointment. The seasoned progressives fear getting trapped in a fatal adventure.

One thing for sure, Trump's very existence has all but destroyed the credibility of the media, exposed partisan politics in the FBI and Justice department, showcased the extreme platform of the Democratic party and the show is not over yet.

There is very likely a coming climax to this whole show and possibly an encore performance.

Tolls might be better than tariffs

TOLLS AT BORDER FOR ANYONE ENTERING COUNTRY

HELP IN DEFRAYING COST OF BORDER SECURITY

It now costs me $10.00 to use the Turnpike to drive 70 miles. It cost many time this amount for citizens to enter New York City. Why not put a $10.00 toll on all cars entering the United States and a $50.00 toll on all commercial traffic. As costs rise, raise the tolls, the turnpike commission is not bashful, why not the federal government.

We could do the same on all who enter by air or ship.  This would help to pay for the increased cost of policing  and enforcing border security. 

Why not send a bill to foreign countries whose citizens enter the country illegally. Let's charge them for the costs associated with dealing with them, including transporting deportees.

Politicians all constantly looking for ways to tax citizens, but none have even suggested doing the same for those who cross the border. After all they use the highways, they are afforded police protection and even legal representation.

These fees would be paid for by those non-citizens crossing the border, not by Americans.

We could charge those foreign countries that have their citizens breaking our laws. Send them a bill, and add penalties and interest if not paid on time. We Americans have to deal with these practices every day. We could also come up with creative ways to collect for those who refuse to pay.

We could deduct amounts from any money we should give or owe them. We could refuse them access to our markets entirely until they pay or police their borders. We need new methods to deal with these problems.

We could put a fee on all monies sent out of the country. These countries receive at least $50  billion a year in money sent home by foreign workers.

The emphasis should always be to put the cost on those who are benefiting from the service, not the American citizens.

Democrats have to make a choice

MUELLER EXITS, THROWS STINK BOMB AS HE CLOSES DOOR

STILL PROTECTING THE DEEP STATE

Robert Mueller announced he is resigning from the Department of Justice and returning to private life. He then stated in a contradicting summary that he could not find sufficient evidence  to charge Trump or his campaign of conspiring or cooperating with the Russians in the 1016 election. He then went on and stated that he could not clear Trump of obstructing the investigation. He claims that it was because it was not DOJ policy to indict a sitting President. He intentionally left everyone wondering what he has been doing for two years to give such a poor result for his efforts.

It seems this may have been just an expensive opposition research operation paid for by the American taxpayers.

It seems he has used the same tactics as Jim Comey, who listed all the laws broken by Hillary Clinton, but claimed he could not indict because her intent was unclear. Now,  Mueller claims he believes Trump is guilty but could not indict because he could not prove his case or policy did not allow it.

It is becoming clear that Mueller is not the virtuous public servant he has been built up to represent.

How is it that not one word about the Dossier that was produced with information from Russian sources, paid for by the DNC and Clinton campaign in an attempt to influence the election. There was millions of dollars spent on this Dossier, much more than the $40,000 of Facebook ads purchased by the Russians. 

If this was truly an investigation into Russian interference, why was this not mentioned. It just proves this whole investigation was an attempt to force Trump from office and they are not ready to quit.

Mueller and those who cooperated in this shame cannot give it up, because the whole thing is an attempt to keep their unlawful activities under wraps. Not only the whole Trump attempted coup, but financial misdeeds involving those in high positions in the FBI and Department of Justice.

The extortion of billions of dollars from American Banks and the funneling of the money to progressive activist groups, and the sale of 20% of the Uranium resources of the United States to Russia, approved by none other than Mr. Mueller himself. who was FBI director at the time.

Now he is exiting and handing the baton to the Democratic party. We will see if they have the guts to go down this road when many of them know it is a fake vicious attempt to force the President out of office. 

It will be interesting to see how it will look, if as soon as they start this process, many of the unanswered questions begin to be answered. We will most likely get dueling narratives as to who are the real criminals in all this mess.

This could all very well begin the greatest crisis the country has yet to endure.

Effects of China tariffs are minimal

CHINA HAS MUCH MORE AT RISK THAN THE U.S.

TARIFFS WILL BE OPPORTUNITY FOR OTHER SUPPLIERS

Much is being made of the tariffs being placed on Chinese goods imported into the U.S. market. The U.S. imports $539 billion in goods from China, China imports $120 billion from the U.S.  Most of the exports to China are aircraft, machinery, optical and medical equipment.

We export $9.3 billion in agricultural products to China mostly soybeans, cotton, pork products and grain.

While we can put tariffs on much more products than China, most of the things we import are not necessitates. Most of it is discretionary items.

When China puts tariffs on pork and soybeans it is on products that are necessities and will be felt directly by their people.

Tariffs placed on most Chinese products are not direct. While they may raise costs to consumers, there also will be an opportunity for other countries, Viet Nam, Taiwan, Japan, and South Korea to take market share from China. It will also be an opportunity for clothing manufacturers in Central America, Mexico and Africa to become alternate suppliers to the U.S. market.

American manufacturers and retailers will see some costs rise, but China may be forced to absorb some of this cost to maintain their competitiveness in many of these markets. They will unlikely be willing to continue to resist reform for an extended period as the rest of the developing world will be more than willing to attempt to under price Chinese tariffed products.

China has been notorious for stealing and copying American products, Forcing manufactures in China to turn over copy rights and patents for access to their markets, and placing high tariffs on many American products.

All the while, rather than expanding their middle class, and developing a domestic consumer market, they are building a large military and expanding influence around the world. They have openly planned to be a world power in the next five years. 

It is interesting that even some of the leading Democrats support Trump's pressure on China to reform, while opposing tariff's. No one seems to have a viable alternative to this approach. What is needed is a united effort on the part of all Americans to stand firm and insist that China play by the accepted rules of free and fair trade.