November 12, 2018

Peter Navarro on the Wall Street Economy

Jack Kemp forwards this:


Peter Navarro Warns Wall Street Globalists: â€Å“Stand Downâ€Â Or Else!


The money quotes:

If you understand the basic elements behind the new dimension in American economics, you already understand how three decades of DC legislative and regulatory policy was structured to benefit Wall Street and not Main Street. The intentional shift in fiscal policy is what created the distance between two entirely divergent economic engines.

Quote from Peter Navarro: REMEMBER there had to be a point where the value of the second economy (Wall Street) surpassed the value of the first economy (Main Street).
Investments, and the bets therein, needed to expand outside of the USA. hence, globalist investing.

However, a second more consequential aspect happened simultaneously. The politicians became more valuable to the Wall Street team than the Main Street team; and Wall Street had deeper pockets because their economy was now larger.

As a consequence Wall Street started funding political candidates and asking for legislation that benefited their interests.

When Main Street was purchasing the legislative influence the outcomes were -generally speaking- beneficial to Main Street, and by direct attachment those outcomes also benefited the average American inside the real economy.

When Wall Street began purchasing the legislative influence, the outcomes therein became beneficial to Wall Street Those benefits are detached from improving the livelihoods of main street Americans because the benefits are â€Å“globalâ€Â. Global financial interests, multinational investment interests -and corporations therein- became the primary filter through which the DC legislative outcomes were considered.

There is a natural disconnect.

End quote

As an outcome of national financial policy blending commercial banking with institutional investment banking something happened on Wall Street that few understand. If we take the time to understand what happened we can understand why the Stock Market grew and what risks exist today as the monetary policy is reversed to benefit Main Street.

President Trump and Treasury Secretary Mnuchin have already begun assembling and delivering a new banking system.

Instead of attempting to put Glass-Stegal regulations back into massive banking systems, the Trump administration is creating a parallel financial system of less-regulated small commercial banks, credit unions and traditional lenders who can operate to the benefit of Main Street without the burdensome regulation of the mega-banks and multinationals. This really is one of the more brilliant solutions to work around a uniquely American economic problem"

[...]

Financial products were developed (as investment instruments) that are essentially wagers or bets on the outcomes of actual companies traded on Wall Street. Those bets/wagers form the hedge markets and are [essentially] people trading on expectations of performance. The â€Å“derivatives marketâ€Â is the Ëœbetting systemâ„¢.

Ford Motor Company (only chosen as a commonly known entity) has a stock valuation based on their actual company performance in the market of manufacturing and consumer purchasing of their product. However, there can be thousands of financial instruments wagering on the actual outcome of their performance.

There are two initial bets on these outcomes that form the basis for Hedge-fund activity. Bet A that Ford hits a profit number, or bet B that they don't. There are financial instruments created to place each wager. [The wagers form the derivatives] But it doesn't stop there.

End excerptd.

Do read the entire piece at Conservative Treehouse. It is very illuminating.

This from Fay Voshell

That's a terrific article, Jack. I once described the stock market as a giant gambling casino. The author ratifies my opinion--always gratifying. ;-)

It would be terrific to see stocks once again bought and sold according to actual worth and cautious projections rather than according to entirely fantasy projections. Seems to me that's the way bubbles are always created, be it the tulip mania, the South Sea, Mississippi or the dot.com bubbles. Pertinent to the article, I think, is the fact it's mostly left leaning ideologues who support the present fantasies, attributing their fantastically utopian ideas into the world of economics.

From Tim:


Thanks Jack! The collapse in '08 was in no small part caused by this kind of betting on stocks. In the end there is no value in most o these markets. Money to be made, yes, but on nothing.


Posted by: Timothy Birdnow at 08:34 AM | Comments (1) | Add Comment
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1 She's running. What fun that will be!

Posted by: shell shockers at November 15, 2018 08:17 AM (W+tRB)

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