US: Perfect “Perfect Storm” Is Coming, by Jim Rickards. The three elements:
The first storm is impeachment. Impeachment of a president by the House of Representatives is just the first step in removing a president from office. The second step is a trial in the Senate requiring a two-thirds majority (67 votes) to remove the president. Two presidents have been impeached, but neither was removed. Nixon resigned before he could be impeached.
If the House impeaches Trump, the outcome will be the same. The Senate is firmly under Republican control (53 votes) and there’s no way Democrats can get 20 Republicans to defect to get the needed 67 votes needed. So House impeachment proceedings are just for show. … Some of the party’s biggest private money donors, including Tom Steyer, are also demanding impeachment.
The final outcome is irrelevant; what matters is the process itself. Impeachment fever is not likely to last long into 2020, because at that point the election will not be far away. Voters will turn their backs on impeachment and insist that disputes about Donald Trump be settled at the ballot box. …
The second storm is the 2020 election. Trump is on track to win reelection in 2020. My models estimate his chance of victory is 63% today and it will get higher as Election Day approaches. The only occurrence that will derail Trump is a recession. The odds of a recession before the 2020 election are below 40% in my view and will get smaller with time. …
I don’t expect Joe Biden to stay in front for long, and I don’t believe he’ll win the nomination. But the only way for a Democrat to stay in the race is to stake out the most extreme progressive positions. This applies to reparations for slavery, free health care, free child care, free tuition, higher taxes, more regulation and the Green New Deal. …
But the third storm is the most dangerous and unpredictable storm of all: Spygate. It involves accountability for those involved in an attempted coup d’état aimed at President Trump.
The Mueller report lays to rest any allegations of collusion, conspiracy or obstruction of justice involving Trump and the Russians. There is simply no evidence to support the collusion and conspiracy theories and insufficient evidence to support an obstruction theory. The case against Trump is closed.
So now Trump moves from defense to offense, and the real investigation begins. …
Lindsey Graham, Republican senator from South Carolina, will hold hearings in the Senate Judiciary Committee about the origins of spying on the Trump campaign and lies to the FISA court. These may be the most important hearings of their kind since Watergate. …
The storm next year:
The impeachment process and Trump’s revenge represent diametrically opposing views of what happened in 2016. The Democrats will continue to call Trump “unfit for office.” Trump will continue to complain that the Obama administration and the deep state conspired to derail and delegitimize him.
The 2020 candidates will have to take a stand (even though they may prefer to discuss policy issues). There will be nowhere to hide. The bitterness, rancor and leaking will be out of control. …
A perfect storm with no name is coming. The only safe harbors will be gold, cash and Treasury notes. And make sure you have a life preserver handy.
The markets are finally coming to terms with what we’ve been pointing out for nearly 10 years now: with interest rates already at record lows to counter the GFC, when the next recession hits the central banks won’t be able to juice the economy by significantly lowering interest rates.
It looks as if the next recession is coming soon, hastened by trade wars. With no other tool left and a political imperative not to let the markets fall, the central banks will have to resort to increased government money manufacture. (Though they will find a new fancy name for it to obscure the reality for a while.)
After the US Fed announcement yesterday, the gold price is rising rapidly today. It broke A$2,000 per ounce for the first time ever, an hour ago.