The Trump effect is in full swing, at least with regard to markets, as the Dow Jones Industrial Average closed at 21, 532 on Thursday, recording its 23rd all time high for the current year. Since President Trump was inaugurated on January 20th, there have been 120 days where the markets closed at record highs, meaning that 1 in 4 days under Trump boasted a record high.
And on Thursday, the US Stock Market set yet another historic high. Yes indeed, the financial markets are booming, and one may say they’re high on borrowed money and borrowed time. The question is who benefits from the joyride, except for “money changers”, i.e. speculators, hedge fund managers and so on and so forth? Well, one may argue that regular Americans are doing great with their 401k’s since Trump got into office. And truth be told, the Donald is really smashing it, at least compared to Barry Obama’s presidency.
It’s worth noticing that during Barry’s first term in the White House, the DOW reached a new closing high exactly zero times, like never. However, we must be very cautious. The thing is, currently the market is doing great and confidence is way up. There are real reasons for the market to respond to Trump positively (the promised tax cuts, jobs getting back in the US, Obama era regulations removed and so forth and so on).
On the other hand, watching Yellen and the FED raising interest rates (they did it 4 times in 6 months under Trump and once in 8 years of Barry), one may be concerned about a bubble and an intentional “pop.” Wouldn’t be the first time the globalists played that game. That’s how we got FDR and the raw deal.
We must remember how the stock market went up 140% during the Obama Presidency. However, that was mostly due to Quantitative Easing and ZIRP, not to mention the fact that Obama took office after the market crashed over 40%. Valuations were low. QE and zero interest rate policies are an artificial (FED owned) scheme of meddling into the market mechanisms via Keynesian pump priming, and the world be damned.
That is like feeding your kids cotton candy and corn dogs because they like it and wondering why they are sick. In our view, the stock market is in a huge bubble and kicking the can down the road will circle back to bite us all in the proverbial ass sooner or later.