Authored by MN Gordon via The Economic Prism blog,
The Dow’s march onward and upward toward 30,000 continues without reservation. New record all-time highs are notched practically every day. Despite yesterday’s 31-point pullback, the Dow’s up over 15.5 percent year-to-date. What a remarkable time to be alive.
The President, Donald Trump, is pumped! As Commander in Chief, he believes he possesses divine powers. He can will the stock market higher – and he knows it. For example, early Wednesday morning he blasted out the following Tweet:
“Stock Market has increased by 5.2 Trillion dollars since the election on November 8th, a 25% increase.”
Four minutes later, he sent out another Tweet:
“…if Congress gives us the massive tax cuts (and reform) I am asking for, those numbers will grow by leaps and bounds.”
Who knows? Maybe President Trump is right.
These days even bad reforms – and just about everything else – are good for stocks. And what’s good for stocks is good for everything. For instance, according to President Trump stock market gains reduce the national debt. He even said so this week.
President Trump’s logic for how higher stock prices reduce the national debt was unclear. But it certainly sounds good to say. More importantly, it sounds bullish.
Smart and Savvy Investors
On the other hand, obvious risks and hazards no longer matter.
Not the prospect of nuclear war with North Korea will stop this bull market. Not the gold backed yuan oil exchange agreements being developed between Beijing, Moscow, and Tehran, and the implications for the petrodollar’s reserve currency status. Not weak jobs numbers.
So, too, runaway government debt, consumer debt, and corporate debt haven’t fazed the stock market’s trajectory. Because everyone loves debt. Especially bankers. …read more