Trump: the US has a “false economy” and an “artificial stock market.” Sounds like we got another Austrian-lite on the loose, huh RW?But this Austrian-lite, Hollow Daze, is changing the debate. Nothing Trump said based on this quote is Austrian-lite (Though Trump's economic thinking, in general, is lacking.) It is what I have been stating.
I have always stated that the boom was a Federal Reserve manipulated boom as part of the boom-bust business cycle and that the capital goods sector, e,g, real estate and the stock market, is where the boom occurs.
I was pointing this out because Austrian-lites argued last year that the Fed:
A. Would not be able to raise rates.
They then switched to Claim B after the Fed hiked rates in December: That the hike would have to be reversed and that the boom would not continue.
Back last September there were comments here at EPJ like this:
Why is it metaphysically impossible for the Fed to never raise rates again?And, Hollow Daze wrote this at the time::
Doubling down already? I'm starting to wonder what the purpose of this blog is. We'll see negative rates and cash illegal before any rate hikes. It'll be done for the "chillruns" and against the "terrists", of course. The Fed cares not about its "credibility" in the eyes of the .000001% of people who understand its machinations. It only cares about allowing the "system" to live another day. BTW, rate hikes won't crash "the economy" necessarily, but would crash the Fed-fueled speculative real estate, stock and bond markets.Well, we did not see negative rates, we got a hike and it did not crash real estate or the stock market.
So it is pretty damn slippery for Hollow Daze to imply with his Trump quote that I was somehow wrong because what occurred is the exactly what I said would occur and the opposite of what he said would occur.
I repeat, I have always called it a manipulated boom, "false" if you prefer, and that the Fed would raise rates. This is the opposite position of Hollow Daze and other Austrian-lites, who first held the position that the Fed was not going to raise rates and, indeed might go negative, and that a rate hike would cause a crash of the stock market and real estate.
So to answer another question Hollw Daze asked back in September, the purpose of this blog might be to warn about the bad theory and analysis of Austrian-lites and to warn about the slippery way they will change the debate.
As for the future, I expect more Fed rate hikes AND, given what is going on now with the money supply, in the EPJ Daily Alert I am positioning for a likely major new up leg in the stock market.