1. Peer-Reviewed Survey Finds Majority Of Scientists Skeptical Of Global Warming Crisis

   by Forbes Magazine

It is becoming clear that not only do many scientists dispute the asserted global warming crisis, but these skeptical scientists may indeed form a scientific consensus.

…read more HERE

2. The War On Kids

 by Michael Campbell

“In talking to a group of 19 – 20 year old students over the holiday I was reminded of the alternate ace in the hole for our status quo power groups is the collective ignorance of economics & finance”

….continue HERE

3. 2017 is Looking More Optimistic Than Ever

 by Martin Armstrong

The net capital movements around the world are showing clear signs that things will be intensifying and the net capital movement is headed for the dollar

….continue reading HERE

Despite the millions of dollars Wall Street plowed into the Clinton campaign in vain, the financial industry has nevertheless now become downright giddy with the prospects of a Donald Trump presidency. The imperative question investors need to determine is will the Trump presidency be able to generate viable growth. And, if he cannot produce robust and sustainable growth imminently, are the markets now priced for perfection that simply may never arrive?

Let’s look at the President Elect’s proposals to find an answer.

A top priority of the Trump presidency will be a reduction in the tax rate for the repatriation of foreign earnings on U.S. companies. According to Credit Suisse, the cumulative earnings parked by S&P 500 companies overseas is over $2 trillion.

First off, the entire $2 trillion will not be repatriated. This is because American companies use some of this money for normal business operation overseas. However, the belief is that with a lower rate much of it will find its way back home. This could be a good thing, even though the last time this occurred the money went mostly for stock buybacks and acquisitions. But what is most misunderstood is the impact this transaction will have on the dollar. Much of U.S multinational earnings are sitting in foreign currencies. For example, when Apple Inc. sells a phone in the Eurozone it does so in Euros, not dollars.  Therefore, repatriated capital must be converted into dollars and that will provide an even greater boost to the greenback, which is already trading at a 14-year high due to the trenchant difference between U.S bond yields and Fed monetary policy as compared to those overseas. This is going to increase the negative effect on multinational companies that lose in currency translation when foreign earnings are converted into dollars, and will offset to a great degree the positive effect of gaining access to that cash.

Next, Trump is set to reduce regulations from day one. And the regulation that Wall Street would like to see reduced substantially is the Wall Street and banking regulations know as Dodd-Frank, which includes the so-called Volcker Rule. This would free banks to lend more money and is one of the primary reasons why Wall Street is now so enamored by Mr. Trump.

Adding to this regulatory redux is the potential dismantling of the Environmental Protection Agency (the “EPA”). President-elect Trump has selected an EPA Administrator who is known for his vigorous opposition of a multitude of EPA regulations. These regulations are stifling growth and their abrogation would supply a boost to energy and manufacturing. However, although good news for refineries and factories, manufacturing accounts for only about 10% of the U.S. economy.

But what the stock market hasn’t factored into its equation is that there will be a whole new set of regulations for companies. For example, Trump has floated the notion of withdrawing from NAFTA and imposing a border tax on imports. If a U.S. Corporation outsources its manufacturing or labor resources overseas it may face some combination of fines, tariffs and taxes. This will negatively impact the margins of multinationals that produce products more cheaply overseas and could also result in a massive tax increase for American consumers.

Then we have Trump’s humongous Infrastructure vision that is set to include a great wall on our southern border with a beautiful door. And a refurbishing of bridges, roads and airports with a price tag of around $1 trillion dollars.

But before you invest in shovels you should know that Senate Majority Leader Mitch McConnell has already poured cold water on his plan; telling reporters recently that he wants to avoid such a $1 trillion stimulus package. Trump is also getting pushback from deficit hawks, including House Speaker Paul Ryan and the remnants of the Tea party in Congress. Even Trump’s appointee to the director of the Office of Management and Budget, Rep. Mick Mulvaney, is considered a hard-liner against deficit spending and would rather shut down the government before extending the national debt.

Trump’s original campaign pitch for infrastructure included using $167 billion in federal tax credits to engender that $1 trillion in private-sector infrastructure investment over the next decade. Trump is hoping to get the private sector on board. This may be a great idea, but one has to ask: if there exists a venture that is so profitable, why hasn’t the private sector taken them on already? After all, funds have been made available for virtually free for the past eight years thanks to the Fed. And, since the private sector will only be interested in projects that can actually make money, will consumers now pay to drive on newly paved roads that used to be free, and won’t they also balk at paying tolls on bridges to nowhere?

Also, if spending money on infrastructure was the pathway to prosperity, why has the Japanese economy been in a perpetually funk for decades; and how is it that the ghost infrastructures of China’s bubble economy are now crumbling under the weight of capital flight and a falling yuan? The reason why government-directed infrastructure spending doesn’t produce viable growth is that the money is just borrowed from the private sector from funds that would have been spent anyway–but in a much more productive manner. And massive deficit spending doesn’t stimulate the economy unless it is financed by the central bank. But this type of temporary and unbalanced “stimulus” eventually comes at the costs of higher inflation and spiking interest rates. Nevertheless, Trump’s infrastructure plans will come at a time when the Fed is raising rates, not reducing them. Therefore, surging borrowing costs will occur immediately and actually end up reducing GDP from the start.

Finally, at the heart of the Trumpian hype and hope are tax cuts for both the corporate and personal sectors. Tax cuts do incentivize growth. However, Paul Ryan has indicated that he wants to simplify the tax code by lowering rates a nd eliminating deductions; with the net effect being revenue neutral and keeping the effective tax rate the same. A simplification of the tax code is still a good thing, but this is not going to have anywhere near as big an effect on the economy as the Reagan tax cuts, which reduced the rate by 20 percentage points on the top tier.

The Trump Presidency has the potential to be bullish for the economy in the long run. However, the bottom line is GDP is a function of a growing labor force and productivity enhancements. It’s hard to imagine Trump will open the floodgates to immigration; and it takes time for tax cuts and reduced regulations to spur innovation.

But there exist some serious headwinds to this economy and massively overvalued stock market in the near term. The most troubling of which are the surging U.S. dollar and Treasury yields that have doubled over the past six months.

Of particular saliency is the pressure put on China and the emerging markets due to these factors, which is expediting capital flight. In fact, interest rates are surging across the globe. For example, the Chinese 10-Year bond yield recently surged the most on record (22 basis points in one day) to 3.45%–the highest level in 16 months. And China’s yuan has plunged 13% since January 2014 against the U.S. and Hong Kong dollars. Currency and interest rate chaos will act as kryptonite for the overleveraged economy of China, whose economic growth has accounted for one third of total growth worldwide since the Financial Crisis.

One of the other early casualties of Trumponomics could be the President elect’s beloved real estate sector. The typical fixed rate on a 30-year mortgage has risen to around 4.4%. Because of this, U.S. Bancorp, now expects mortgage revenue to decline between 25-30% in the fourth quarter compared with the previous three months, as fewer home owners refinance loans. In addition, groundbreakings for new homes in November fell by 18.7%, to a seasonally-adjusted annual rate of just 1.09 million units; and the MBA Mortgage Application Index dropped 12%, while the refinancing index plunged 22% in the final week of 2016.

History has clearly proven that systemic bubbles never break smoothly or harmlessly. And the epic worldwide bond bubble will not be the exception to the rule. Therefore, before any of the positive moves from the new Trump Administration can take hold it could run smack into a bond market and currency crisis in early 2017.

The stock market has already priced in Tumponomic perfection before he has even placed his hand on the bible. While that could spell huge trouble for markets and the economy in the short-run; it could also be a great opportunity for sage investors that are prepared to profit from the tumult.

As we head into 2017, how should one be positioned? Let’s explore that idea with a trio of contrarian indicators.

US Treasuries?

The one idea most widely agreed upon is that Trump will spur inflation and treasuries are the last place to be.

This headline says it all

….continue readng HERE.

Pop the champagne, because 2016 is soon to be history.

And with that, we are proud to wrap up the year with 16 of the best infographics, charts, and data visualizations that we posted over the course of 2016. Just like in last year’s edition, some of the posts below were handpicked by our staff, while others received notably high amounts of shares, views, and comments from our audience. 

If you’re new to Visual Capitalist, this countdown is one of the best ways to get acquainted with what we do. It rounds up our most powerful and intuitive visuals that help to simplify complex concepts in business, technology, and investing. If you like what you see below, don’t forget to subscribe to our mailing list or connect with us on Facebook, Twitter, or LinkedIn to get our free content daily.

Important Notes:

Below, we count down our top infographics of 2016. But first, a few quick notes:

• Images below are previews for a much larger infographic with an accompanying article
• To view any post in full, click the image or link in the text. All links open in a new tab.

Enjoy the roundup, and wishing you the best in 2017!
– The Visual Capitalist Team

….view the Top 16 HERE

That’s what a lot of analysts and economists are now proposing. Guys like Larry Kudlow, consulting to President-elect Trump, and in line for the Chairman of the Council of Economic Advisors.

Heck, why not? Other countries are now issuing long-term debt. Ireland and Belgium issued 100-year debt. Austria issued 70-year debt. Italy, France, and Spain issued 50-year debt. And Japan pushed out a 40-year maturity and is now considering 50 years.

Mexico, believe it or not, has already issued three 100-year bonds since 2010.

Britain’s U.K. Treasury has issued 40- to 50-year bonds seven times.

Here’s the thinking:

First, the average duration of marketable Treasury bonds held by the public has been roughly five years for a very long time. That’s not likely to change much, even if maturities are extended. Or so they think.

Second, Treasury’s held in public hands have moved up from 32 percent of GDP back in 2008 to 74 percent today. So, despite all our problems, economists basically believe debt isn’t hurting us.

Well, if that’s the case, does that really justify extending maturities and adding on our debt? Are these MBAs and PHDs just brain dead? Have they never traded the markets?

Probably not. They don’t have a clue how debt can destroy a market, a sector, entire industries and even an entire economy.

Third, they claim extending or refinancing debt would somehow save the country hundreds of billions in interest expense.

How so? All it does is kick the can down the road. Meanwhile, interest expense for fiscal 2016 is nearly $250 billion.

And it assumes that the average duration would remain five years and that the debt would not increase above the current 74 percent.

Once again, the economists assume “no unintended consequences” in their thinking — which is always where things come back to bite them — and us.

And what if rates rise, as they are now doing? That would compound the interest expense repeatedly.

The principal value of those long-dated bonds would crash faster than you can bat an eye, way faster than the crash just experienced in the 30-year Treasury, which lost $108,497 of its value (based on $1,000,000 face value bond) — an astounding 10 percent — in just 26 trading days.

Excuse me, but I think issuing longer-dated Treasuries is …

1. A sign you’re broke.

2. A sign you’re desperate for credit.

3. A sign of great weakness to your foreign trade and credit sources.

4. A major Achilles’ heel in our economy.

5. A major mistake, if implemented.

I’ll pontificate a bit (and cover the following thoughts in greater detail in the new year).

1. The U.S. government should be outlawed from going into debt even by one penny.

2. The current fiscal budget is roughly $3.8 trillion or 21 percent of the U.S. economy. Cut the budget to under 17 percent. 

3. Shut down the Internal Revenue Service and implement a national sales tax of 17 percent that essentially funds the federal government.

4. Implement the same concepts on a state and municipal level.

5. In the event of a natural disaster, or even war, issue no debt and instead … print the money needed to cover the expenses. Inflationary? No. We’ve printed trillions already and has it stirred up inflation? No.

But never do so without submitting the plan to the people for approval. The Treasury and Congress will have no control. Only the people.

6. Convert existing national debt into equity and distribute those shares to the American population based on a fair formula to be decided. Essentially, do a debt-for-equity swap. Float the U.S. shares on the NYSE and prohibit foreign ownership of said shares.

7. Negotiate debt relief with our creditors. They all depend upon us for economic growth. Take a haircut on what we owe you or face slowing economic growth or perhaps even trade tariffs.

8. Work together to design a debt-free monetary system with a neutral world reserve currency, a big benefit for all.

Sound impossible? I don’t think so. But what I do know is that 100-year or even 50-year bonds are NOT the answer.

Call me crazy if you wish, but someone needs to wake up and think differently about the future. If President-elect Trump or advisors like Larry Kudlow can’t, then I’ll simply keep pounding the table until they hear me. That I promise you.

Best wishes, as always …

Larry

…..also:

Feds Stance on rate hikes equates to Nonsense & Masses are Turning Bullish on Stocks