September 24, 2025: We just moved from one state to another and I have been unable to keep up the blog until now.
Because I have a Ph.D. in economics and a much vaster knowledge base in the areas of this subject, I can make predictions that will happen in the future with a high degree of accuracy. Also, since cause and effect happen with considerable lags most of my predictions refer to around six to twelve months in the future. So, if you want to know the current state of the economy, just read what I said six to twelve months in the past. Tariffs (taxes) have led, as predicted, to increasing inflation and decreasing growth, or “stagflation.” That is why the Fed remains so cautious and states that focusing on either inflation or the wobbly labor market has risks going forward. The Fed can only fight a demand side recession that, because of a reduction in consumer spending, is both deflationary and has a declining GDP. Simply increasing the money supply, signaled by decreasing the discount rate, remedies the situation . . . but with a lag, of course. Trump’s tariffs cause a supply-side or supply-chain disruption that leads to both stagnation or slowing growth and rising unemployment and inflation. If the Fed targets unemployment buy lowering rates it makes inflation worse. If the Fed targets inflation by raising rates it make unemployment worse. If Trump succeeds in pressuring the Fed for lower rates, we will most certainly face much higher inflation. This will lead to higher, not lower, long term interest rates and less domestic investment as a result. There is no simple serendipitous scenario credited to the simpletons who think that if Trump just gets his way we will be better off.
On a different topic. Trump’s narcissistic personality disorder is characterized by, among other things, a strong proclivity to respond positively to praise and react very negatively to criticism. His personality disorder makes him subject to manipulation by Putin who praises him and to an inability to handle any kind of criticism or negative news. Thus, his decisions seem irrational when, instead, the are the result of a disorder. Investors will have to take Trump’s personality disorder into consideration as it could lead to much greater uncertainty going forward. Investors in gold have already done this. You should to. For example, I would strongly consider a fund like IAUI as a way to generate income and take advantage of Trump’s personality disorder through rising gold prices. As always, good investing!
