{"id":1089445,"date":"2018-12-12T22:45:34","date_gmt":"2018-12-12T22:45:34","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=106276"},"modified":"2018-12-12T22:45:34","modified_gmt":"2018-12-12T22:45:34","slug":"will-trump-survive-debt-super-cycle","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1089445","title":{"rendered":"Will Trump Survive Debt \u201cSuper-Cycle\u201d?"},"content":{"rendered":"

This post Will Trump Survive Debt \u201cSuper-Cycle\u201d?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

The buck stops here, said Truman.<\/p>\n

But Trump says it stops with the next fellow in line. Let it be the next president\u2019s toothache.<\/p>\n

Last year administration bean counters unfurled a worrisome chart before the president…<\/p>\n

It revealed an approaching \u201chockey stick\u201d-pattern spike in the national debt \u2014 but only after a possible second Trump term had concluded.<\/p>\n

Came the president\u2019s response, according to our well-placed spies:<\/p>\n

\u201cYeah, but I won\u2019t be here.\u201d<\/p>\n

As said King Louis XV when the squall clouds began forming over pre-revolutionary France:<\/p>\n

“Apr\u00e8s moi, le d\u00e9luge.”<\/em><\/p>\n

And what a d\u00e9luge<\/em> is on tap apres<\/em> Trump \u2014 if not pendant<\/em> Trump!<\/p>\n

The United States is to its neck with red ink as is \u2014 some $21.8 trillion worth of federal debt alone.<\/p>\n

The liquid rises by the day, by the hour, by the minute… drop by crimson drop.<\/p>\n

Another good flooding rain or two and the entire head may go under.<\/p>\n

GDP has increased 35% since 2008. But the national debt has increased 122%.<\/p>\n

As it stands today, the nation\u2019s debt-to-GDP ratio crests above a perilous 106%.<\/p>\n

That is, America produces more debt than it produces goods and services.<\/p>\n

Evidence suggests \u2014 though it is inconclusive \u2014 that the flood zone begins at a 90% debt-to-GDP ratio.<\/p>\n

Meantime, Trump\u2019s economic meteorologists promised this year\u2019s tax cuts would \u201cpay for themselves\u201d through higher growth.<\/p>\n

Overall federal spending has increased 7% this fiscal year. But tax revenues have increased only 1%.<\/p>\n

And this year\u2019s $895 billion budget deficit is 39% greater than last year\u2019s.<\/p>\n

Is this tax cuts \u201cpaying for themselves\u201d?<\/p>\n

Please, put us down for tax cuts. But put us down doubly for spending cuts to match them.<\/p>\n

There is the way to fiscal solvency \u2014 if anyone will take it.<\/p>\n

But of course\u2026 we do not seek elected office. Nor would we be elected upon this austere and uncaring platform.<\/p>\n

Yet the Congressional Budget Office (CBO) estimates the deficit will top $1 trillion in 2019 \u2014 one year ahead of schedule.<\/p>\n

That deficit will very likely exceed $1 trillion in 2020\u2026 and remain above $1 trillion for the next decade.<\/p>\n

Perhaps the flood is closer than the president would prefer…<\/p>\n

Billionaire hedge fund manager Ray Dalio has identified two separate debt cycles \u2014 short-term \u2014 and longer-term \u201csuper-cycles.\u201d<\/p>\n

Short-term cycles last some seven or eight years on average… and track with general cycles of boom and bust.<\/p>\n

But of these super-cycles Dalio says:<\/p>\n

\u201cThere are limits to spending growth financed by a combination of debt and money,\u201d adding:<\/p>\n

When these limits are reached, it marks the end of the upward phase of the long-term debt cycle.\u00a0<\/em><\/p>\n

Dalio finds the \u201csuper-cycles\u201d of debt usually endure 50\u201375 years.<\/p>\n

The last super-cycle began shortly after World War II \u2014 which ended in 1945.<\/p>\n

Thus we are hard against the 75-year upper limit of the present super-cycle.<\/p>\n

Niels Clemen Jensen is founder and CIO of Absolute Return Partners.<\/p>\n

\u201cDebt super-cycles always end with a big bang,\u201d he informs us.<\/p>\n

And the longer the cycle… the louder the bang.<\/p>\n

But to return to President Trump and the deluge he would avoid\u2026<\/p>\n

A former British diplomat with the unimprovable name of Alastair Crooke says Trump may soon need a rowboat:<\/p>\n

\n

It is Trump\u2019s misfortune that his presidency seems to be coinciding with the end to not just \u201cany\u201d super-cycle, but to a turbocharged, global debt super-cycle, fueled by radical interest rate suppression and massive credit creation (which may explain its \u201clongevity\u201d).\u00a0<\/em><\/p>\n<\/blockquote>\n

But Trump is not just unfortunate, says Crooke \u2014 but \u201cdoubly unfortunate.\u201d How?<\/p>\n

Because at the same time \u2014 for related reasons \u2014 the U.S. simply is running out of fiscal \u201cspace.\u201d The Treasury has a big (trillion-plus) borrowing requirement in this and coming years, and foreigners are no longer buying U.S. debt.\u00a0<\/em><\/p>\n

In conclusion:<\/p>\n

\n

For the first time in 70 years, the<\/em> [world\u2019s] reserve currency holder is finding it hard to finance itself \u2014 and in the current atmosphere of Washington polarization \u2014 the U.S. cannot reform itself, either. It is stuck.<\/em><\/p>\n<\/blockquote>\n

Stuck\u2026 indeed.<\/p>\n

Of course, we find no great fault with the sitting United States president.<\/p>\n

The fellow inherited an Everest of debt far beyond one\u2019s man ability to tackle, even if he tried.<\/p>\n

The task would swamp an Andrew Jackson, the last \u2014 and only \u2014 president to fully retire the national debt while heaving up a balanced budget.<\/p>\n

Old Hickory would be under the presidential desk within an hour on the job, sinking a bottle of Tennessee\u2019s hardest whiskey.<\/p>\n

So here we stand in late-stage American democracy.<\/p>\n

And the American president must keep the business going \u2014 there is, after all, an election in 2020.<\/p>\n

And cutting spending is no way to win votes.<\/p>\n

Only one question remains:<\/p>\n

When comes the deluge?<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/em><\/p>\n

The post Will Trump Survive Debt \u201cSuper-Cycle\u201d?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Will Trump Survive Debt “Super-Cycle”?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Trump is no Truman… The debt “super-cycle,” and why it may come to haunt Trump… <\/p>\n

The post Will Trump Survive Debt “Super-Cycle”?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[484,366,463,486,467],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1089445"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1089445"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1089445\/revisions"}],"predecessor-version":[{"id":1089446,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1089445\/revisions\/1089446"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1089445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1089445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1089445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}