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Not Done Yet: Trump Cooking Up Major Tax Cut Bombshell

Guest Piece by Tom Beck of Portfolio Wealth Global

In 2019, the Federal Reserve’s stimulus packages – which shocked the markets, since they represented a full U-turn in terms of policy, compared to the aggressive tightening in 2018 – were one of the primary reasons that the stock market soared by so much.

On multiple occasions throughout 2019, stocks hit new all-time highs. In the 4th quarter, this really intensified and reached historic rally levels. Stocks were green almost on a daily basis.

The FED’s balance sheet expansion is one of the major catalysts, as well as the pro-growth Phase 1 deal that China and the U.S. signed yesterday for the willingness of buyers to pay higher prices.

The result is that the stock market is now the most expensive ever, as far as price/sales ratio goes:

Courtesy: Zerohedge.com

This isn’t a good sign for stocks, nor for the economy, in general. To me, it means that these artificially-low interest rates are causing investment firms to purchase stocks, even though they don’t really want to, as well as prompting CFOs to issue large buyback programs over spending funds on machinery, research and growth.

The lack of viable alternatives for the trillions of dollars in managed money is creating a situation in which fund managers are acting out of necessity, not out of pure reasoning.

Warren Buffett, who isn’t under any pressure to make any moves, has patiently amassed an enormous cash position, which will surely serve shareholders when the time comes to buy big.

Courtesy: Zerohedge.com

As you can see, the FED is not trigger-shy on its unofficial QE4 plan.

Everyone’s been focused on this monetary easing, but the Trump administration is preparing a tsunami of fiscal stimulus in the form of another round of tax cuts for the middle class and lower-income demographics – and they plan to roll it out in 2020!

This means that, on top of the already $1.1T deficit, tax receipts are set to decline dramatically.

The monstrous economic engine, the boom in the markets, the low unemployment rate, the confidence of consumers; all of these are what Trump is banking on to get re-elected.

It seems Trump is looking to make all voters know, right around the time of elections, that he is ready to take drastic measures to let the free enterprise system work, by reducing taxes.

Obviously, if he is re-elected, he’ll have to focus on balancing the budget, which is a whole other major topic.

This week, the impeachment took another step towards the Senate, when the House voted to advance the two articles of impeachment to trial.

It’s coming and it’s happening during an election year. This is a very unique time in American politics, to say the least.

There are many moving parts here and it will be truly fascinating to see how the public reacts and follows these issues, at the same time as the Phase 1 deal taking effect and with the president’s economic advisor, Larry Kudlow, purposely leaking or teasing, as I see it, a Tax Cut 2.0 later this year.


Courtesy: Zerohedge.com

As you can see, Goldman Sachs views this as a time of very complacent behavior on the part of investors, who are not considering any potential loose ends with Iran, on the potential of complications on the impeachment front or backlash from the rollback of Repurchase Operations by liquidity-addicted investors.

You can truly notice the elevated risk appetite, when you look at the low yields that investors are willing to accept when lending money in the junk bonds segment.

It’s back to 2007 levels:

Courtesy: Zerohedge.com

It’s clear to see that people are feeling good, in general. Investors have their guards down and their radars turned off for Black Swan scenarios.

This doesn’t mean that anything imminent is coming, but what it does tell you is that most investors are willing to pay top dollar for their stocks.

It’s a good opportunity to scan the portfolio for any companies which may be receiving too much attention, and you can capitalize by taking profits, partially or totally.

Like I said, we live in an era that is dominated by central banks and we must factor that into our thoughts:

Courtesy: Zerohedge.com

Is this a scary-looking chart or what?

There’s no massive war or terrible crisis happening, yet central banks have put a chokehold on markets. In England, Japan, the European Union, in the states and around the globe, there is too much debt (compared with GDP) on the central bank and government level.

These sorts of things don’t unwind smoothly and with the proposed tax cuts later this year, the budget deficits look grim.

No solutions so far; the bubble intensifies.

 

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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Debt Carpet-Bombing: Deep State Won’t Surrender!

[Note: I have found the work of Lior Gantz from WealthResearchGroup.com to be excellent and thought-provoking, so we’re sharing this article with you. Enjoy!]

At the highest level of government and central banking reside individuals who have proven themselves to be very capable men and women. Decision-making at their stature affects the lives of hundreds of millions, and sometimes billions. Their ability to think clearly, trust the advice of their closest advisors, and maintain a balanced mind open to ideas has to be sharp as a tack.

In World War 2 – which came to an end on September 2nd, 1945, now 74 years past – the capability of military and political leaders to formulate plans was a determining factor in how things turned out.

The war was atrocious, so much so that many facts were kept secret from the general public. This strategy of “shielding” the masses from the consequences of actions is one of the most unfair injustices that the Deep State officials in every country commit toward their own citizens, and on the global population as a whole.

Concealing travesty MISSES the entire point of learning from mistakes and of growing up.

Lying, embarking on propaganda schemes and warping reality is a big part of how WW2 got started and was able to linger on and consume the entire world for six whole years of devastating fighting.

We don’t want to ever repeat those painful lessons. People need to know that they live in unprecedented times, economically, financially and politically, so that they can prepare in an accurate manner, not a delusional one, for what comes next.

Courtesy: Zerohedge.com

In the past seven years, some of the investment world’s most successful long-term fund managers have been saddled with defeat and poor performance.

The world has morphed into this new beast, which baffles billionaires from Buffett to Dalio, who have been underperforming the indices.

Unlike us, who have ridden the incredible surge in the price of Bitcoin, most billionaires dismissed it. In the very EARLY days of WW2, French reconnaissance planes flying over the border saw a vast number of German soldiers, tanks and supply, lined up for an attack and reported thus to their high commanders up the chain. The general refused to acknowledge this, based on what THEY BELIEVED they knew, instead of relying on precise intelligence.

In those early days of the war, the French army was much more intimidating than the German one, and had the general acted on this information, MOST LIKELY the German invasion of France would have never occurred. Perhaps a resolution or agreement would have been struck, since all the momentum would have been stopped dead in its tracks, right then and there.

NEVER shut your mind to change; the world is evolving and old information, unsubstantiated opinions and biased beliefs could be deadly for one’s progress.

Courtesy: Zerohedge.com

Despite propaganda to the contrary, banks are noticeably beginning to tighten the noose around businesses and consumers – just like they did in the late 1920s, at the end of the roaring decade, right before the Great Depression.

We hear a lot about doctored government reports, both from Washington and China, but not all news is fake or tampered with.

The U.S. does enjoy low unemployment rates, but what of it? Most of the people that are working have low-wage, dead-end careers; no one is reporting on that FACT.

Even with gold trading near 6-year highs, no one is reporting that, in terms of value proposition, both the physical metal and the mining stocks are close to their historical 2001 lows!

Courtesy: Zerohedge.com

And, most dire of all, I have seen almost no warnings concerning the fact that corporate profit margins are in free fall, a phenomenon that has preceded each and every recession for the past 70 years.

The central banks have been carpet-bombing the financial system with liquidity, via QE programs and balance sheet expansions of all sorts.

Just like a variety of experimental weaponry was used for the first time in WW2, so have many monetary tools been implemented without any statistics regarding their chances of generating a positive result.

Take a look at these UNDENIABLE patterns, repeated time and again:

Courtesy: Zerohedge.com

In war, soldiers have months of downtime, in anticipation of the enemy’s attack. They sit, knowing that the inevitable can become the imminent and they prepare.

Nothing is more important than being ready.

Don’t get played by the Deep State academic propaganda machine.

Do your own thinking. READ, network with quality individuals and build a financial fortress.

There isn’t ONE CASE, in all of history, of a government that has devised a way to enrich the population. But there are INNUMERABLE cases, each and every day, of people from all walks of life who have AWAKENED their capacity to generate value and become financially independent.

Be one of those shining stars.

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