Sunday, April 3, 2016

Trump: We Are in Economic and Stock Market Bubbles

On Thursday, Donald Trump sat down at the soon-to-be-finished Trump International Hotel in Washington DC for an interview with Washington Post reporters Bob Woodward and Robert Costa.

The newspaper published the interview on Saturday.

During the interview, Trump warned that the economy and stock market are in bubbles.

From the interview:
 TRUMP: I think we’re sitting on an economic bubble. A financial bubble. I think if you look at the stock market.

WOODWARD:In the stock market you mean?


TRUMP: I’m talking about a bubble where you go into a very massive recession. Hopefully not worse than that, but a very massive recession. Look, we have money that’s so cheap right now. And if I want to borrow money...

WOODWARD: Is it a good time to invest now?

TRUMP: Oh, I think it’s a terrible time right now.

WOODWARD: You really do?

TRUMP: Yeah.

COSTA: Why is that?

TRUMP:Because the dollar is so strong. Our country is in – you know, it’s very interesting. There’s a couple of things good about strong dollars, but there’s some...

WOODWARD:So your tip, stock tip, is to get out of the market? Or avoid it now?

TRUMP:  Oh, my stock tip is that the market – I believe we’re sitting on a big bubble....You have a situation where you have an inflated stock market. It started to deflate, but then it went back up again. Usually that’s a bad sign. That’s a sign of things to come. And yeah, I think we’re sitting on a very, very big bubble.

Trump is correct, the economy and stock market are in bubbles. The bubbles are, of course, created by the Federal Reserve Bank manipulation of the money supply. There are no indications at this time though, as I report in the EPJ Daily Alert, that we are headed into the down phase of the boom-bust business cycle in the immediate future. The eventual crash will be extreme. It's just not imminent.

As for the strong dollar. indications are that it is peaking, This will mean added price inflation pressure in the United States, which will mostly be fueled by the aggressive Fed money printing and the new decline in the desire to hold cash balances.

Trump does not seem to be aware of the price inflation threat, as he does not mention it in the interview at all, despite having plenty of opportunities to do so.



  1. The 30 year Treasury yields 2.62% and the real yield is .83% so Trump is not the only one who is not aware of the price inflation threat. Real market yields are calculated from composites of secondary market quotations obtained by the Federal Reserve Bank of New York.

  2. Now some peoples are investing in stock market. Someone haven't more idea about this market. That's why fibo is working for them. I think everybody need proper idea about stock market.