Steve Forbes: ‘When You Have a Good Economy, a Lot of Sins Are Forgiven’

By F McGuire – Re-Blogged From Newsmax

Steve Forbes, chairman and editor-in-chief of Forbes Media, told Newsmax TV that it is crucial for Republican lawmakers’ survival to quickly forge a tax-cut plan that will benefit all Americans.

If not, the GOP stands to pay a very dear and steep price.

Image: Steve Forbes: 'When You Have a Good Economy, a Lot of Sins Are Forgiven'

“I think Republicans in Congress are beginning to realize that if they don’t get a good growth tax cut through this year, they’re going to be pursuing many of the new opportunities after the elections next year,” Forbes told Sunday’s “The Income Generation Show.”

Volatility of the Copper Markets Combined with the ‘Trump’ Effect

By Stuart Edwards – Re-Blogged From http://www.Gold-Eagle.com

Much like other commodities, traders have always devoted a certain level of attention towards copper. There are two key reasons for this observation. First, this red metal is highly indicative of industrial demand and therefore, the health of domestic economies. Secondly, political policy shifts and fiscal plans can have a knock-on effect in regards to its pricing. We have witnessed a great deal of volatility during the past few months and while the medium-term outlook remains positive, many are wondering if a support level will soon be reached. Let us take a look at the root causes of this volatility as well as what to expect in the coming months.

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What Not to Buy in Today’s Stock Market

By Vitaliy Katsenelson – Re-Blogged From IMA
Dear reader, if you are overcome with fear of missing out on the next stock market move; if you feel like you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor”; then consider this article a public service announcement written just for you.
Before we jump into the stock discussion, let’s quickly scan the global economic environment. The health of the European Union did not improve in 2016, and Brexit only increased the possibility of other “exits” as the structural issues that render this union dysfunctional went unfixed.
Japan’s population has not gotten any younger since the last time I wrote about it — it is still the oldest in the world. Japan’s debt pile got bigger, and it remains the most indebted developed nation (though, in all fairness, other countries are desperately trying to take that title away from it). Despite the growing debt, Japanese five-year government bonds are “paying” an interest rate of –0.10 percent. Imagine what will happen to its government’s budget when Japan has to start actually paying to borrow money commensurate with its debtor profile.

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Bernanke’s Confetti Courage

By Michael Pento – Re-Blogged From http://www.gold-eagle.com

Former Fed Chairman Ben Bernanke’s book titled “The Courage to Act” is now available in paperback. This isn’t a surprise because, after all, his proclivity to print paper encompasses the totality of what his courage to act was all about. The errors in logic made in his book are too numerous to tackle in this commentary; so I’ll just debunk a few of the worst.

Bernanke claimed on one of his book tour stints that the economy can no longer grow above a 3% rate due to systemic productivity and demographic limitations. But his misdiagnosis stems from a refusal to ignore the millions of fallow workers outside of the labor force that would like to work if given the opportunity to earn a living wage. Mr. Bernanke also fails to recognize the surge of productivity from the American private sector that would emerge after the economy was allowed to undergo a healthy and natural deleveraging cycle.

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America Needs a Debt Cut Before a Tax Cut

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

President Donald Trump has finally unveiled his broad blueprint for tax reform. Well, at least let’s call it a sketchy outline of one. It would take the top income tax rate for small businesses from 35% to 15%. Theoretically, a business that makes $500k in taxable income, which had been paying roughly $175k in Federal taxes, would then pay closer to $75k. This means our business in this example, which saved 100k in Federal taxes, would have to grow its taxable income to $1,166.666, or by 133% to provide the government with revenue neutrality.

Even though Trump’s proposed tax plan offers more questions than answers, what is clear is that the administration is no longer working off the pretense that tax reform will seek revenue neutrality. Instead, it looks like Trump and the Republicans are leaning towards pretending that dynamic scoring of tax cuts will suffice for a revenue neutral plan.

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Business Cycles Are Credit Cycles

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

This article gets to the heart of why central banks’ monetary policy will never succeed. The fundamental error is to regard economic cycles as originating in the private sector, when they are the consequence of fluctuations in credit. It draws on the author’s submission of evidence to the UK Parliament Treasury Committee’s enquiry into the failure of monetary policy in the wake of the 2008 crisis.

Summary

  • It is incorrectly assumed that business cycles arise out of free markets. Instead, they are the consequence of the expansion and contraction of unsound money and credit.
  • Monetary inflation transfers wealth from savers and those on fixed incomes to the banking sector’s favoured customers. It has become a major cause of increasing disparities between the wealthy and the poor.

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Stalling Engines: The Outlook for U.S. Economic Growth

By John P Hussman – Re-Blogged From Hussman Funds

Imagine driving a car moving down the road at 20 miles an hour. You hold a rope out the window. At the other end of that rope is a skateboard. If the skateboard is behind the car, yanking the rope pulls the skateboard forward, so the skateboard might temporarily speed ahead until it gets way ahead of the car and the rope tightens again. At that point, yanking the rope will pull the skateboard back, so even while the car continues down the road at 20 miles an hour, the skateboard actually loses ground for a while. Over the long-term, the car and the skateboard move ahead at the same speed, but the speed of the skateboard over shorter horizons depends on its position relative to the underlying trend.

The same proposition applies to the trajectory of numerous economic and financial variables. We have to be attentive to at least two things: 1) the central tendency of growth in underlying fundamentals, and 2) our current position, relative to that central tendency. The difference between the two is what separates longer-term growth from cyclical fluctuations.

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