The ouster of House Speaker, Kevin McCarthy will produce a growing chaos within our political system going forward. The issues were mostly the lack of 'truth'...which Kevin seemed to ignore as he negotiated the Debt Ceiling issue and the Shutdown situation. Kevin is now out and our Congress will choose a new speaker in the coming days/weeks. My sense is that this new speaker will bring us more CHAOS as the issues are so DIRE. Prepare for some huge fireworks going forward!
What are the dire issues that our politicians face going forward:
1. The continuing deficit and debt issues are dire and beyond any real solution IMO. At some point America must default on these debt issues. Keynesian economics was the problem and this model is now DEAD!
2. The polarization within our Congress is dire and historic. This will continue in spades. Our elected representatives can not agree on much...so it seems! This produces more chaos going forward
3. The equity markets are now going to crash as the higher interest rates create new markets for our investors. The flow of funds will change from stock equities to bonds and money market instruments. This is starting as I write and I sense that this trend will grow 'exponentially' in the coming weeks/months.
4. The lack of mortgage affordability is now so dire that most new buyers are priced out of our home markets. This will eventually crash the house real estate markets (say early 2024). It's a trend in motion that will play out over the next year or more.
5. The Trump/Biden soap opera can only get more confused and dire going forward. Trump has his legal problems (four indictments) and Biden has his character problems (treason and bribery). Each will only ADD to the chaos within our political system going forward.
6. America's financial problems are now the most crucial issues for our politicians. My sense is that the new house speaker will try to get traction on some of these issues...making the situation MORE dire. I see no solution to the math issue for America. You can witness the numbers (math) here: www.usdebtclock.org
7. Our Federal Reserve is now creating the coming financial CRASH of a lifetime with their policy decisions (higher interest rates and inflation fighting). Soon this will become obvious to those running for President in 2024. As of today, few politicians have focused on these financial problems!
What is now developing in the USA is a trend towards more CHAOS for all our markets and for our citizens. Is it time to understand the dire issues which we face? I think so! As our economy turns DOWN (starting now) the financial issues will become the problem for our citizens to understand. As of today, FEW citizens understand our dire political and financial issues. Our prior prosperity and wealth has hidden the need for understanding. People, generally, do not seek understanding until the PROBLEM gets DIRE (for them).
The rejection of Kevin McCarthy is historic. Never in our history has a leading House speaker been rejected as happened yesterday. Some eight Republicans who view Kevin as a Liar (on many issues) rejected his leadership and all the Democrats in the House voted with these eight giving a total vote of 216 (for vacancy) to 210 (for remaining as speaker). This resulted is the vacancy of the Speakers position. A new Speaker must now be voted into office. Some are pushing for Trump to take this position (temporarily). Amazing!
This speaker, Kevin McCarthy, was rejected as eight House members viewed his continuing behavior as unacceptable. His Debt Ceiling fiasco (he lied is the mantra) and the Shutdown fiasco (via a new CR) were part of the problem. Kevin also lied with regard to his prior commitments which initially allowed him to get his Speaker position in the first place (after some 15 trial episodes). This was mostly the core issue for the eight who voted to 'vacate' Kevin from his Speaker position. Will a new Speaker tell the 'truth'?
It appears, to me, that dire polarization has hit our Congress and this polarization can not improve going forward. The issues are a lack of commitment to SOLVING our many political and financial problems. As more CHAOS develops (going forward) maybe we will get some FOCUS on the real issues which face our nation. Economics will bring a focus eventually IMO. You can witness some of the dire issues here: www.usdebtclock.org
What is now emerging with a vengeance is our crash in the EQUITY markets as high interest rates change the flow of investors funds from equities to bonds and to cash. I see no hope for a growing stock market given these HIGH interest rates. Investors will gradually reduce their equity portfolio and expand their bond/cash portfolios. This will crash the equity markets (say within weeks/months) and bring our BUBBLE stock markets to an END. The flow of funds is starting to SHIFT and I predict that this shift will grow exponentially in the coming weeks and months. It's a TREND in motion as I write this missive!
We are heading for more CHAOS in all our markets going forward. Soon the BUBBLE within our house markets will pop. This takes some time as sellers will not lower prices (much) until they exhaust their emotions. Our media is still advertising that house prices are going up even as 'affordability' is nearly impossible for 50 - 75% of our buyers. This 'affordability' issue will grow until INTEREST RATES decline (say back to 2%). This is unlikely for now and this means a CRASH in our house markets (sometime in 2024). Prices must decline and this takes time to occur.
Chaos 101 is now here for America and the global markets. As America enters her tribulation period, the global situation will also get more DIRE. All this MUST happen as America has avoided dealing with her problems for decades. The problems are now so dire that many will have to FOCUS on these problems. It's impossible to avoid these problems as the public is finally getting educated on these issues. It all takes time but the DAY of RECKONING has arrived IMO. Problems must be dealt with EVENTUALLY!
Congress is America's decision making body and as more chaos develops within this body of decision makers we will finally witness a new FOCUS from this BODY of decision makers. As our equity markets turn south (down) this will provide the REASON for a change in mindset. Money and prosperity is key to a decision makers emotions. Economics will be the core ISSUE in 2024 (as this election period draws nigh). Who will get the confidence of the citizens? As of today, I do not think it will be BIDEN. That is my perspective for today! Have a great day!
The Donald (Trump) has not ruled out his accepting the position of House Speaker. It's all up in the air as of today!
McCarthy made himself out to be a steward of the populist right’s priorities, but he's hardly an effective one. He couldn’t marshal his forces in support of partisan Republican priorities, nor could he corral Republicans in opposition to Democratic objectives. A revolt was inevitable. We now must live with chaos as our equity markets head for a crash. Will America finally start to DEAL with their many political and financial problems? This is likely IMO!
I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com.
http://kingdomecon.wordpress.com
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