Treasury Secretary Steven Mnuchin discusses the strength of the U.S. economy, along with the apparent disconnect between Main Street’s growth along with Wall Street’s multinational risk exposure. [Pro Tip: go back along with read the dimensional shift]
Secretary Mnuchin (correctly) stays away via discussing the federal reserve along with highlights the strength of Main Street. CTH readers well understand what is actually driving that will dynamic; along with the item will continue until 30-years of divergence is actually corrected, along with parity achieved.
Traditional economic principles have revolved around the Macro along with Micro with interventionist influences driven by GDP (Gross Domestic Product, or total economic output), interest rates, inflation rates along with federally controlled monetary policy designed to steer the broad economic outcomes.
Additionally, in large measure, the various data points which underline Macro principles have been viewed as two dimensional. As the X-Axis goes thus, the Y-Axis responds accordingly… along with so the item goes…. along with so the item has historically gone. that will ain’t that will.
Traditional monetary policy has centered upon a belief of cause along with effect: (ex.1) If inflation grows, the item can be reduced by rising interest rates. Or, (ex.2) as GDP shrinks, the item too can be affected by decreases in interest rates to stimulate investment/production etc.
However, against the backdrop of economic Globalism -vs- economic Americanism, CTH is actually noting the two dimensional economic approach is actually no longer a relevant product. There is actually another economic dimension, a third dimension. An undiscovered depth or distance between the “X” along with the “Y”.
I believe the item is actually critical to understand that will brand-new dimension in order to understand Trump economic principles, along with the subsequent “America-First” economy he’s building.
As the distance between the X along with Y increases over time, the affect detaches – slowly along with almost invisibly. I believe understanding that will hidden distance perspective will reconcile many of the current economic contractions. I also predict that will third dimension will soon be discovered along with will be extremely consequential inside the coming decade.
To understand the basic theory, allow me to introduce a visual image to assist comprehension. Think about the two economies, Wall Street (paper or false economy) along with Main Street (real or traditional economy) as two parallel roads or tracks. Think of Wall Street as one train engine along with Main Street as another. (continue reading)