Despite Having a Toddler in Charge

Despite the chaos that the toddler-president is spreading around the world — causing the adult politicians on the plant to consider how they are going to correct (punish) the child’s aberrant behavior — the economy, in general, continues strong. Industrial production continues to accelerate (chart below).

Corporate profits after taxes continue to grow (chart below).

Housing, as measured by permits for private housing units, continues to grow and, despite the many proclamations of an over-heating real-estate market, is well below the levels in place prior to the last three recessions. At a minimum, we can say that there is no housing bubble to cause a recession (chart below).

When it comes to financial (over-leverage) risks to the economy, we continue to be on sound financial ground (chart below).

Of course, we must consider that the toddler-president’s behavior does carry some risk. Depending on how the rest of the world reacts (or over-reacts), we could move past this nightmarish episode and continue to increase global trade. At this point, the Chinese are using a soft glove by only slapping tariffs on a meager 3 billion dollars’ worth of trade. But it is worth remembering that they control the vast majority of rare earth metals deposits which are strategically necessary for all technology industries. Let us hope that the Chinese continue to regard trade with the rest of the world as necessary to their own well-being, and don’t start thinking that they are big enough to prosper in isolation.

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Source: Nicholas Gomez