Redeploying Capital

What is the goal here?

Why are two particular people moving to the top in the election cycle?

I would suggest that the population is tired of capital moving into a lot of areas that do not make their lives better.

Robert Kennedy said that GNP was not a measure to use on how the country is doing?

I think he was right and by the same token, the price of the Dow is not a measure to validate our progress.

Ben Hunt in his letter yesterday said in part:

“There’s a reason that the Fed kept paying interest on bank reserves even in the darkest, most deflationary days of the Great Recession. Yes, it’s the Fed’s job to support full employment. Yes it’s the Fed’s job to maintain price stability. But the Fed’s job #1 — the reason the Federal Reserve was created in the first place — is to maintain the stability of the banking system.”

And Hunt goes on to say:

“I understand that weakening the yen is an existential domestic political issue for Kuroda and Abe, just as weakening the euro is an existential domestic political issue for Draghi and Merkel, just as weakening the yuan is an existential domestic political issue for Zhou and Xi.  And I understand that policy-addicted markets will respond exuberantly to anything that can be described as central bank support for financial asset price inflation. Hey, I’m an addict, too.

But what I’m concerned about is not the theory but the practice. What I’m concerned about is the intentional destabilization of the global financial system for domestic political purposes. What I’m concerned about is the Fed’s inevitable adoption of negative rates, something Alan Blinder pushed for in 2008 and Ben Bernanke is pushing for now.”

I agree with what Hunt points out above, and that is why this coming election is so important.  In my view their are only two people who understand what is happening and will do something about it, Trump and Sanders.  Let’s see how Iowa goes tonight.  Maybe the mid-west gets it, Washington certainly doesn’t.

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