POITOU, FRANCE – “‘The Donald’ has been White House-broken,” was what we were trying to say, translating the phrase into something that may make sense to a French listener.
But it was too clever and complicated.
“Well, let’s just say the president has been brought into line,” we simplified.
This is the social season in the French countryside.
Weddings, cocktails, receptions – people use the month of August to reconnect with friends before returning to work, school, and retirement in the fall.
Yesterday, we drove about a half hour over country lanes to a gracious 18th-century farmhouse. There, about 100 people had gathered on the lawn.
“You are American?” we were asked several times. “What do you think of Trump?”
We dodged as best we could. Inevitably, we were forced to explain that, yes, he is a disgrace… but, no, we would not prefer Ms. Clinton… and, no, we do not like [French president] Mr. Macron, either:
“None of them has the strength or independence you would need to buck the trend.”
“What trend is that…?”
“Oh, it’s a long story… and it is such a beautiful evening…”
The guests were a wide assortment of local farmers and Paris-based hedge fund managers. The former complain about the weather. The latter complain about the markets. Both complain about the government.
But here at the Diary… we don’t complain. We just want to know when to pack an umbrella.
Payoffs and Pimping
Yesterday, we looked at how Washington insiders have brought President Trump to heel.
He said so himself: “Decisions are much different when you sit behind the desk in the Oval Office.”
Many people believe the White House elevates its occupants so they become better people and make better decisions.
Candidate Trump may be a scoundrel or a scalawag, lusting for fame and fortune, when he announces his candidacy, they say. But when he enters the White House, the slime, incompetence, and corruption are washed down the drain. The man is born again… as POTUS.
If this were true, the Pennsylvania Avenue sewer would clog up after each election. Instead, it runs clear… because the wheeling and dealing… the payoffs and pimping… are still going on!
Alas, the White House elevator goes in both directions.
This week, President Trump hit the “down” button. Against his own “instincts”… reneging on his promises to the people who voted for him… he agreed to go along with the generals in their plan to kill more people… and spend more money… so as to make their crony friends richer and advance their own careers.
That is how things work in the “swamp.”
Today and tomorrow, we connect the dots back to the financial world.
End of an Era
The swamp is where the win-lose deals breed. Since the 1970s, it has grown to cover half the U.S. economy.
There, wasteful spending, stifling regulations, phony money, misleading financial signals, zombies – corporate and individual – and all the many excesses and absurdities we watch daily here at the Diary are warping honest price signals, destroying real output, and transferring real Main Street wealth to the swamp’s insiders.
Donald J. Trump promised to pull the plug. But he couldn’t even if he wanted to. And now his decisions are Oval Office decisions… that is to say, those that suit the Deep State.
He cannot drain the swamp; he is now a part of it.
There will be no cutback in domestic spending (no genuine or important reform of O’care, for example)… and no cutback in the empire’s wars abroad.
That still leaves the possibility of tax reform. But even that is extremely unlikely. The last major tax reform program was 35 years ago. The president has neither the political skills nor the ideological commitment needed to pull off another one.
No “skinny budget”… no spending cuts… no tax reform… no relief from the swamp.
And that, friends (and we don’t have to spell it out), is why Breitbart’s Steve Bannon is right: The Trump presidency is over.
Where to next?
Tune in tomorrow…
Market Insight: Health Care Costs Climb
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
One of Trump’s biggest campaign promises was to bring down the cost of health care in the U.S.
As president, he tweeted in May, “Our healthcare plan will lower premiums & deductibles – and be great healthcare!”
And it’s easy to see why this is important to Americans.
Today’s chart tracks the increase in spending on health care services and prescription drugs as a relative share of consumer spending between 1997 and 2017.
As you can see, health care services and prescription drugs have seen by far the biggest increase.
– Chris Lowe
Correction: We made an error in yesterday’s Market Insight about small-cap valuations. Index providers strip out negative earnings, which pushes price-to-earnings (P/E) ratios down. By adding negative earnings back in, P/E ratios rise. Apologies for the mix-up.
Comments From Jackson Hole Could Send Gold Soaring
Gold is trading near recent highs. Meanwhile, central bankers, including Fed Chair Janet Yellen, are gathering in Jackson Hole, Wyoming, for an annual symposium. Depending on what’s said, gold could surge higher.
Wall Street Traders Jump on Board With Bitcoin
For years, cryptocurrencies like bitcoin were niche assets, traded only by true believers. But after bitcoin returned more than 300% so far in 2017, mainstream traders are starting to jump on board.
Financial Martial Law Is Coming
You’ve likely never heard of the Bank Secrecy Act. But it’s a set of rules put in place by the government that limits what you can do with your money. Editor at Large Chris Lowe reveals what this means for you and your savings.
In today’s mailbag, readers consider if Trump has finally been broken…
President Trump broken? You couldn’t be more wrong. You’re just another liberal that can’t handle the truth. I’ve waited my whole life for someone like him. He is the General Patton of presidents. He just needs to ignore the likes of people like you and make this country proud of itself again. Come on… wise up. Don’t you go all communist on me.
– Richard M.
Your article “Mr. Trump Is Broken” sums it up perfectly. The “Witch Doctors” are now in control of the “Tribal Chief.”
– Steve C.
Ye, of little faith. I’m open to see Trump’s next moves. Remember, we could have Hillary.
– Charles S.
I absolutely love what you have to say. But I’m afraid you’re “peeing into the wind.” Nothing you or I say will make a difference. Rome burns while Nero fiddles. America burns while politicians fiddle. Nobody is planning for the long-term prosperity of this country. Everything that’s done is for short-term gratification for the very, very selfish few. No chance in hell we’ll make it. The U.S. will follow in the footsteps of Greece, Carthage, Rome, etc. Our time is over.
– Stephen K.
Finally, the debate of what should be done with Confederate monuments continues…
I truly believe that all this statue stuff is smoke and mirror tactics created by the puppet masters only to steer attention away from what’s really going on in this country. Any day now, a statue could be the last thing on anyone’s mind. People are, for lack of a better word, just too dumb to see it or get it. They want to act like slavery never existed or else have the thought of it stricken from every mind.
I’m a disabled veteran from a special ops security unit USAF. I find it disgusting and I hate to say it but I find myself embarrassed to be an American at times.
– Don W.
It may well be true the Southern states which left the union fought the war to continue slavery. They had other reasons too. But I’ve not heard anyone proposing to tear down the Lincoln Memorial. Lincoln, by his own admission, had no desire to end slavery. He actually wanted to export the slaves out of America. That was his solution.
– Mike R.
The vast majority of Confederate servicemen never owned a slave and were not fighting to keep slaves for other richer men; they were fighting primarily for their homes, but also against what they saw as a national government overstepping its bounds. They were driven by their concept of duty, honor, and valor. Those protesting the Confederate monuments are not concerned with monuments; they’re still mad because Trump won the election and the monuments are the most recent excuse for their infantile tantrums.
– George B.
Auction off all the Confederate statues to the highest bidder. The owners could then do with them as they wish.
– S. C.
In Case You Missed It…
Are you attending tonight’s cryptocurrency Q&A?
At 8 p.m. ET, colleague and cryptocurrency expert Teeka Tiwari is answering your questions about cryptocurrencies like bitcoin.
As Bill has said, cryptocurrencies are more of a speculation, not an investment. But if you’ve been curious about these little-known assets that are returning up to 20,000% in a matter of months, then this free event is a great place to start.
You can still submit your questions to Teeka by going right here.