80% of central banks buying more stocks. Trumponomics Trade Contradiction.

January 26, 2017

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“within a few years the world’s monetary authorities who are tasked with “financial stability”, will have acquired a majority of the world’s equity tranche, effectively nationalizing it.
 
A narrowing of the trade deficit is clearly negatively correlated with rising growth.
 
With world exports already running below 1% growth over the last 6 years or so, the world simply will not be able to take a narrowing US trade deficit.
 
If Trump wants sustainable growth he will need a widening trade deficit. The exact opposite of stated policy.
 
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The chart above show that the Bank Of Japan now owns 66% of all outstanding Japanese ETFs.
“at the current rate of expansion, within a few years the world’s monetary authorities who are tasked with “financial stability”, will have acquired a majority of the world’s equity tranche, effectively nationalizing it.
Here is the WSJ survey.
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In this world it is becoming somewhat old fashioned to talk about value and economics. However, one day that will matter again.
In the mean time it is important to realize that there is an obvious and glaring contradiction in Trump’s 2 primary economic objectives.
The chart below shows that a narrowing of the trade deficit is clearly negatively correlated with rising growth.
More simply perhaps, in the chart below the global expansion coincided with a massive increase in the widening trade deficit. When the deficit reversed global growth reversed!


With world exports already running below 1% growth over the last 6 years or so, the world simply will not be able to take a narrowing US trade deficit.
 
If Trump wants sustainable growth he will need a widening trade deficit.

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