By David Treece
War with North Korea appears imminent. The rogue communist continues to launch missiles and talk big talk while U.S. warships stalk the edge of the isolated country’s coastline. President Trump seems to have backed himself into a corner, and backing down at this point would severely damage his ego.
It’s this author’s opinion that if President Trump and the media quit talking and giving the Korean dictator, Kim Jong-un, attention the snake will go back in its hole. It’s unclear how capable North Korea is, but what if they are already nuclear capable? What would it mean for the American and global economy?
The Dow Jones stock market index climbed over 21,000 despite Gross Domestic Product getting off to a horrible start in 2017. The stock market does not make fundamental sense. Reports indicate that the leading driver of the economy thus far has been home sales. This has been driven by artificially low interest rates.
Retail sales are down, and car dealers are reporting stagnation in sales. In fact, the dealership where I purchased a vehicle a few years ago contacted me this week offering me 0% interest on a new car. While this is a great deal for consumers, it’s a terrible sign for the economy.
When banks cannot earn interest on money loaned, it forces them into risky derivatives that can be problematic on many levels. This issue is a direct result of the Federal Reserve tampering with our money supply.
You may ask what we would do if we did not have the Federal Reserve. What do you do when you rid yourself of a cancer? Live healthier. The economy would be healthier and more robust and operate with a much greater degree of integrity.
With banks making risky bets and the oversold and overhyped stock market climbing higher and higher, it only means the stock market fall is going to be harder, longer, and more dramatic.