Washington, DC -- (ReleaseWire) -- 01/26/2017 --Last Friday Donald Trump was sworn in as the 45th President of the United States of America. His Inaugural Address was a call to arms and a promise to tear down the failed and false edifices built up by the last administration. It was also a declaration of war, and one much more dangerous to President Trump than any foreign war could ever be. As economist and journalist Paul Craig Roberts said, he declared war against "the entirety of the American Ruling Establishment. All of it." In Trump's speech, it was clear that he sees America's greatest enemies to be here at home: the entrenched interests that believe America should impose itself upon the world, the politicians that serve the money provided by those interests rather than the American people, the entire establishment that has run America into the ground while making themselves rich along the way. In sharp contrast to the last eight years of presidential speechifying that focused on the President himself, Trump said "we" fifty times during his address, and "I" only three times, continually bringing the focus back to the American people, their individual and corporate struggles, and his intent to focus on restoring their way of life.
Trump wasted no time in starting to break apart one of his main focuses during the campaign, Obamacare. Not long after the Inauguration, he was signing an Executive Order instructing the Department of Health and Human Services and other responsible agencies to institute changes to make the Affordable Care Act less of a burden to businesses and individuals and allow states more flexibility. It is clear that Obamacare is neither mathematically nor actuarially sound, and the 22 million Americans covered under ACA exchanges and expanded Medicaid under the law are vastly outnumbered by the millions who see Obamacare as a disaster either in fact or in the making. While it will take Congressional action to repeal the law, this order was both symbolic of Trump's intent to follow through on his promises and substantive in providing direction within the framework of the existing law to the government employees responsible for its implementation.
The question, of course, is what Trump will be able to build to replace what he is tearing down. As House Speaker Paul Ryan puts it, "Can we in this country have a health care system that gives us access to affordable care without the cost of a government takeover and death spiral, which Obamacare is giving us?" He believes the answer is yes, as the President clearly does, and now it's up to the administration and Congress to push past the entrenched interests and make it happen.
There is indeed much to be hopeful about looking forward into the Trump presidency. Many expectations have been set for a growing economy, with fresh infrastructure and renewed hope for the average worker, but the truth is that we have to fix what has been broken, which won't be free of pain. While the stock market is on a roll, I believe that the market itself is still, to borrow a term from the President himself, "fake." The market is moving up not because people are buying into it but due to continued central bank intervention and derivatives.
There are signs behind the scenes telling us that maybe things aren't really working, and it seems that foreign interests may be seeing things that Americans aren't. There has been a wholesale liquidation of U.S. Treasuries that continued in November. The TIC (Treasury International Capital) data came out for November, and foreign central banks sold another $936 million in U.S. Treasury paper. This is ongoing, and more than the previous year, and I believe it may indicate a lack of confidence in America and the Trump administration's ability to fix the problems of the past eight years. Newspapers aren't reporting this, the media aren't talking about it, and I have to wonder why. Japan and China have sold off Treasuries in the billions in the last four to six months, and China now has its lowest Treasury holdings since 2010. Even our own allies are selling, and my best guess is that they will continue to sell. Perhaps they think that the United States won't be able to pay off the debt, along with concerns that we are going to be raising interest rates. Throughout 2016, it's been increasingly obvious that foreign central banks, sovereign wealth funds, reserve managers, and virtually every other institution that holds U.S. paper are liquidating. Who are they selling it to? Individuals, retail investors are the ones buying and the ones that will be the last to hold the bag.
Will these foreign investors ever come back? Maybe if Trump manages to clean up our debt and our central banks are run smarter or possibly even eliminated, and if the dollar is stabilized. In the mean time, the Fed needs to determine how they are going to soak up all this excess supply, along with rationalizing their current interest rate experiment. In the mean time, it's up to us to make sure that we don't become the final bag-holders.
There are other signs, as well. Our retail industry, so fundamental to the American economy and lifestyle, is going through its own kind of apocalypse. Chains like Sears and Macy's are shutting stores and even Walmart seems set to lay off nearly 1,000 employees at their Bentonville, Arkansas headquarter. The LA Times reported that Boeing is about to make another round of cuts in their engineering workforce and a Boeing spokesperson said that similar cuts are coming to other job classes. We need only look at our own experiences. For eight years, things have gotten tougher and tougher for millions of American families, as the cost of living has grown faster than their paychecks. Former Obama administration officials are admitting that the vast majority of the "new jobs" the last president crowed about creating were part time, and part time jobs don't pay the rent.
Obama said as he was leaving the White House, "I've made America a better, stronger place for the generations that will follow." When governments and institutions are dumping U.S. Treasuries, that doesn't mean America is better and stronger. When Americans are still struggling to make ends meet, that doesn't mean America is better and stronger. We must hope that Trump can stand up to the Deep State, the entrenched interests that have been running the country for their own benefit. We must hope that he can break through the falsehood, self-interest, and incompetence that has for so long prevailed. We must hope that he can build something real and strong to replace what he tears down.
For over a quarter century, Dawn Bennett has been successfully guiding clients through the complexities of wealth management. Her unique vision and insight into market trends makes Bennett a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to her highly regarded weekly talk radio program - Financial Mythbusting. Through prudent and thoughtful advice, Dawn Bennett has strived to consistently provide the highest quality of guidance.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.