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 Dr. Rasmus delves deeper into this past week’s US and global stock crash. Is it another 2008? Or more like the dotcom tech bust of 2000? Rasmus argues the current decline has characteristics of both 2000 and 2008 and may be therefore even more significant. How tech stock speculation drove 2000 and how property based financial speculation-engineering in derivatives drove 2008. Rasmus explains the role of the new derivatives: ETFs/ETNs/ETPs (the new subprime mortgages-CDO-CDS), and how new developments in recent years of passive index stock buying, momentum trading, and ‘Quant’ hedge fund automated algorithm selling is the new dangerous combination.  Rasmus then discusses the three level of causation behind the stock bubble and now bust: precipitating causes during last week; medium term enabling causes of Trump tax cuts, stock buyback and dividend payouts, return of massive stock margin buying, and more fundamental causes of central bank policies, corporate debt financing, and the longer term relative shift to financial asset investing globally.  Rasmus warns to beware of continued derivatives volatile trading tied to stocks (ETFs, Risk Parity, Vix options), Emerging Markets’ currency and capital flight, China currency devaluation, and highly leveraged US junk bond dependent ‘zombie’ companies, now 37% of all US corps. (Next week: Is there really a recovery of wages in the US? And maybe more on finance markets).

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In the first half of the show, Dr. Rasmus reviews key economic developments of the past week: the emerging major correction of bubbles in stock and bond markets; the reversal of forces that drove up Bitcoin and crypto currency prices to bubble levels in 2017 (that are now driving down Bitcoin et.al. prices); the end of the Janet Yellen regime at the Federal Reserve central bank; and a review of Trump’s ‘high theater’ first State of the Union speech.  Rasmus then focuses on the main theme of the show: the condition of the American Working Class today, in ‘year one’ of the Trump regime’s ‘Neoliberalism 2.0’ offensive. Rasmus debunks the official view that real wages have been rising for the core working class of more than 100 million non-supervisory workers in the US, and follows with a clarification of the jobs picture presented in select, official government data. Why the Trump tax cuts will reduce jobs, not grow them, as multinational corporations have strong incentives to shift more production offshore and why rising central bank interest rates will exacerbate already slowing auto and home sales. Rasmus concludes with a discussion with ominous tech trends now coming that will devastate jobs even more in the coming near and medium term: the ‘Uber Effect’ (transport & hospitality), the ‘Amazon Effect’ (retail, groceries, healthcare), and the ‘Artificial Intelligence Effect’ (self-driving cars and 1 million trucking jobs). Next Week: Why Unions in America are Collapsing and What Could be Done (plus updates on the stock and bond markets).

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While ‘Davos Men’ at the World Economic Forum gathering celebrate a short term resurgence in global economic growth, more serious longer-run problems in the global economy remain and appear to be growing. Dr. Rasmus discusses how global trade growth in relation to GDP has been slowing dramatically, how global income and wealth inequality is accelerating (fueling populism and economic nationalism), debt levels are rising even faster everywhere (for households, business, and governments), productivity and wage incomes are stagnating (except for a small 5% top layer), and currency and trade wars are on the verge of erupting, as the US economic elite wing behind Trump continue to signal their intent to rearrange the global profits pie distribution once again more favorably to the US.  Trump’s ‘America First’, and recent salvos of tariffs and treaty renegotiations, and US Treasury Secretary, Steve Mnuchin’s, declaration this past week of a US ‘low dollar’ policy have riled the global capitalist community at Davos. Rasmus argues the recent Trump tax act—which delivers more than $2 trillion in subsidization to US multinational corporations (and more than $4 trillion tax subsidy to US businesses and investors in general) should be understood as part of this global offensive by US business to garner more of the US and global economic pie for itself—at the expense of global competitors and the US middle class.

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 Dr. Rasmus explains the forces behind the 2017 escalating Bitcoin bubble and their reversal in 2018 in recent weeks, leading to the collapse of Bitcoin prices. Both demand and supply forces driving, then collapsing, bitcoin are explained, and projections for 2018 offered where Bitcoin and other Altcoins may be headed. Crypto currencies as classic financial asset speculative plays are explained, in context of 21st century Capitalism’s continuing securing shift to financial asset investing. Rasmus then estimates the true tax cuts for US businesses from the Trump tax act ($4 trillion not $1.5 trillion), and estimates that US multinational corporations will reap at least half of that $4T. The case example of Apple Corp’s tax cuts are estimated—from the repatriation one time tax savings in 2018 and thereafter for the next five years, after Apple’s announcement of bringing back $38 billion (over the next five years) of its $270 billion offshore untaxed thus far profits hoard. Rasmus explains only part of the $38 billion will result in wage and real investment, with most going to stock buybacks, dividends, and mergers and acquisitions. (Next week: ‘What’s Happening in China?’)

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 Dr. Rasmus starts the show with comments on last week’s announcement by WalMart raising its minimum wage and the Bloomberg News story about China considering cutting back buying US Treasury bonds. The rest of the show addresses the Trump Tax Cuts true extent of tax reduction on corporations, businesses, investors and the wealthiest 1% households. Jack debunks the notion that the US budget deficit hit from the tax cuts will equal only $1.46 trillion, the official government estimate, showing it is based on the absurd assumption of a 10 year annual average GDP growth rate of 3% and no recession occurring for another decade (or 19 years from the last). The deficit hit will be at least twice, or $3 trillion. Tax hikes on the middle class are about $2 trillion. So the tax cuts for corporate America et. al. therefore exceed $5 trillion. Rasmus then estimates the $5 trillion from the major provisions of the Act: $1.5t from corporate rate reduction, $1t from accelerated depreciation write-offs, $.5t from elimination of corporate AMT, and between $2-$2.5t for US multinational corporations from repatriation of $2.8t to $4.0t profits in offshore subsidiaries and tax havens and a future offshore tax rate reduction from 35% formerly, to 8%. Rasmus explains the cornerstones of the US global economic empire: the twin deficits (trade-budget), free trade (benefits share with local capitalist elites offshore), the dominance of the US dollar as global trading currency, and US domestic tax policy that ensure trillions of profits keep flowing to investors via dividends, stock buybacks, and capital gains.

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 Dr. Rasmus provides his economic and political predictions for the coming year, 2018, including: flattening yield curve and recession 2019, slowdowns in autos, housing, retail, why the Fed won’t raise interest rates 3 more times in 2018why  health care costs are about to surge again, why the Dems won’t take back the Senate in November 2018, why Trump will fire Mueller, and how the Supreme Court will rule against union and worker rights. In the first half of the show, Dr. Rasmus explains in detail what’s driving the stock market bubble in the US and globally, both short term and longer term demand forces (short term: the multi-trillion dollar Trump tax cuts, the global economy, the low dollar, and structural shifts in stock markets toward indexing, passive investing, and ETFs. Long term. The massive subsidization of money capital by the central bank from 1986 to present and the continuing, equally massive tax cuts for corporations and investors from Reagan to Trump. Rasmus concludes with his analysis of what’s behind the Steve Bannon-Trump rift, and the likely fallout. (Next week: why the true dimensions of the Trump tax cuts exceed $5 trillion for businesses, investors, and the 1%).

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Dr. Rasmus reviews the major economic developments of the past year. Included are the major economic consequences of Trump’s first year in office: tax cuts, environmental, financial and other deregulations, Goldman Sachs running the economy, the Trump ‘bump’ and Trump ‘trade’, Trump free trade policies re. NAFTA, Trump’s replacement of Fed chair Yellen with Powell, the low dollar and Emerging Markets and US multinational corporations gains, education and union labor policy shifts, Obamacare-ACA gutting, etc. Rasmus also reviews US and global economic developments, including US GDP, productivity, wages, stock markets and Bitcoin, household debt and collapse of savings rates, and the narrowing (and eventual inverting) of the important ‘yield curve’. Global developments are commented on, including Brexit, the continuing collapse of social democracy in Europe and rise of nationalisms, the US counter-offensive in Latin America, Russia’s rising role in Syria and partnership with Saudi Arabia and OPEC on oil prices, China’s party conference and shift to attack its financial speculators and shadow banks again, US foreign policy failures in Turkey and the US-No. Korea continuing drift to military confrontation.  (Next Week: Dr. Rasmus makes his predictions for 2018)

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Dr. Rasmus explains and critiques the Trump-Republican $4 trillion plus tax cuts passed and signed this week, describing it as thieves ‘smashing’ their way into the US Treasury and ‘grabbing’ as much of government revenue as they can get away with.  The tax cuts are put in historical context, as a continuation of the ‘tax shell’ game since Reagan, and as an example of the escalating efforts by politicians, paid for and bought by big business, to subsidize capital incomes at an increasing rate in the 21st century.  Various details of the tax cuts are considered, mostly for corporations, businesses, and investors, with token concessions for the very poor, but with the middle and working classes paying the bill for both.  How the token concessions to the poor will be taken away by other measures as well.  The show focuses, however, on the false claims that tax cuts will create jobs and raise wages. Rasmus explains how this is false in theory and in fact. How the tax cuts will not only NOT increase investment, jobs, and wage growth but will actually result in the loss of jobs and no wage growth. (Next week: roundup of Trump’s economic policies in his first year in office, and what’s coming in 2018)

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The two major economic US events of the past week were the Trump tax cuts and the Federal Reserve’s latest interest rate hike. What do they have in common? Dr. Rasmus explains both  share the common result of an escalating subsidization of capital (corporations, investors, and the wealthiest 1% households) by the State in the 21st century: Congress and the president subsidizing via increasingly massive tax cuts, as the central bank slows its rate of subsidization by raising rates. Rasmus explains how the Fed policy since 2008 has resulted in $6 trillion in direct purchases of investor securities through its ‘QE’ program while enabling, via its low 0.15% interest rate policy, corporate America to issue more than another $6 trillion in low interest bonds. Together with tripling of corporate profits, the $12-$15 trillion has enabled corporations to distribute $6 trillion plus to investors in dividend payouts and stock buybacks. Now that Fed rates are rising (but won’t exceed 3% without a credit crunch), the policy shift is to subsidize corporate America via even more tax cuts--$4.5 trillion in the Trump bill.  With corporations hoarding $4.8 trillion still, Rasmus debunks Trump claims the tax cuts will result in more investment, jobs, and $4000 wage increases. If $4.8 trillion hasn’t had the result, why will $4.5 trillion more achieve it? Rasmus debunks the notion of the ‘wage conundrum’, explaining why wages are not really growing. (Next week: dissecting the final version Trump corporate hand out).

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 Dr. Rasmus goes in depth on the bitcoin mania and the bubble now at more than $15,000 a coin—a 1500% increase in speculative profits in 2017…and rising. What are the determinants and drivers of the Bitcoin mania, the ‘digital tulips’ bubble of today? Rasmus discusses the fundamental causes as blockchain technology and central bankers’ decades of massive liquidity injection into the global economy, looking desperately for ‘yield’, with inflows to digital currencies absorbing more and more. Additional ‘enabling’ factors have been driving prices as well, including proliferating ICOs, entry of traditional investor-speculators, diversion of financing from gold futures, and most important, increasing legitimation of Bitcoin and crypto currencies by established commodity clearing houses in the US (CME, CBOE), some countries’ endorsement (Japan), hedge funds preparation to enter the market, and even commercial banks (Chase) announcing partial participation.  Bitcoin is a commodity, not yet a currency, and a speculative ‘play’ not unlike oil futures, gold futures (as were tulips ini 17th century Holland). Rasmus concludes with a discussion of government regulation, taxation, and potential channels of contagion to other financial asset markets (also approaching bubble territory) when the Bitcoin and cryptos price busts occur.  Capital gains from Bitcoin commodity speculation at 1500% contrasts sharply with today’s just announced real wage gains of only 0.5% in the US. (Next week: the House-Senate final Trump Tax Cuts and latest acceleration of income inequality)

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