Is Trump actually taking on the bankers?

Trump's agenda is next to impossible to discern; but viewed from 36,000 ft and 200-year context suggests that there may be a method to the madness..

[Originally published in this morning’s TrendCompass report]

In last Thursday’s report I referenced Regan Boychuk’s article in which he made a credible case about the way $9 trillion in Alberta oil resources were turned into legal collateral for US banks and used that collateral to conjure $5 trillion in mortgage debt and inflate the 2000s housing bubble. The bursting of that bubble precipitated the 2008 Global Financial Crisis and unprecedented bank bailouts for a group of Global Systemically Important Banks, while plunging 8 million American families into foreclosure.

On Monday, I published a more thorough report about this on my personal Substack, titled “Gods of finance and dogs of war,” along with a 19-min. video, which is also available on YouTube. One of the reasons why I believe this story is so relevant is because it strongly suggest an element of criminal conspiracies at the heart of our financial systems, which seem to employ credit to inflate financial bubbles, then collapses them, producing the familiar sequence of booms and busts and the seemingly chronic state of financial crises

The war of words is already escalating.

Japan’s 1980s everything bubble

In his masterful book “Princes of the Yen,” economist Richard Werner detailed how and to what end Japan’s 1980s asset bubble was deliberately inflated by the banking interests, and how it was then deliberately collapsed, leaving the Bank of Japan in full control of Japan’s economy. Having interviewed many bankers, Dr. Werner concluded that, the BOJ “forced the banks to increase lending” in the 1980s by as much as 15% per annum, knowing full well that to reach that quota, they had to increase non-productive loans (the word subprime was not yet in vogue).

The bursting of the Japan bubble in 1990 took a heavy human toll afflicting ordinary people and businesses. In the immediate aftermath of the stock market crash, more than 5 million Japanese lost their jobs and could not find employment elsewhere. Suicide became the leading cause of death for men aged between 20 and 44. From 1990 to 2003, more than 212,000 Japanese firms went bankrupt and land prices in major cities declined by as much as 84%. But again, the bankers did well for themselves. The BOJ won more than independence: it set itself above the law and took sovereign control over Japan’s economy.

Fast forward to 2019, when we could better appreciate the ultimate fruits of BOJ’s labours: at the end of March 2019, the BOJ was among the top 10 shareholders of nearly half of all companies listed on the Tokyo Stock Exchange, representing 4.7% of the total capitalization of the first section of Tokyo Stock Exchange. It also held 75% of all exchange-traded funds and 43% of all Japanese Government Bonds representing over 100% of the country’s GDP. Thus, the BOJ has appropriated and is continuing to appropriate large segments of Japanese economy with money drawn from its own printing presses, all behind the smokescreen of crises, stabilizations, rescues, stimuli, quantitative easings, etc. Like with Alberta oil, the process ultimately amounts to nothing but plunder on a colossal scale.

The scramble for Ukraine

Today we are witnessing a scramble for Ukraine’s resources, which I covered in an earlier report. Presumably, these are coveted by Western banking interests for similar ends, except that since Trump’s inauguration this scramble seems to be at the center of a growing hostility between the United States and her European “allies,” led by Great Britain. These struggles are happening behind the scenes so they are difficult to discern from media reports and the pronouncements and speeches by public leaders.

However, something odd clearly is going on and the result is that the US is drifting away from its postwar alliances and closer to Russia. This could have a massive impact on both US and European economies, but we’ll be obliged to interpret events by reading between the lines. I listen to multiple podcasts by many different analysts and even where they have a certain access to high-level decision makers, like Col. Lawrence Wilkerson or Professor Jeffrey Sachs, educated guesswork seems to be the rule. We simply can’t be sure what’s really going on, let alone how it might end.

Two systems are before the world

I suspect that Trump’s ultimate agenda could be aimed at returning the United States to Alexander Hamilton’s American System of political economy and away from the British free trade system. The difference is that the American System allocates credit for industrialization and productive ends while the British free trade system credits nonproductive uses aimed at inflating, then bursting asset bubbles. Abraham Lincoln's chief economic advisor Henry C. Carey contrasted the two systems in his 1851 work, "The Harmony of Interests" (I’m grateful to Cynthia Chung and Matthew Ehret for sharing their research into this). Carey wrote as follows:

"Two systems are before the world; the one looks to increasing the proportion of persons and of capital engaged in trade and transportation, and therefore to diminishing the proportion engaged in producing commodities with which to trade, with necessarily diminished return to the labour of all; while the other looks to increasing the proportion engaged in the work of production, and diminishing that engaged in trade and transportation, with increased return to all, giving the labourer good wages, and to the owner of capital good profits.

One looks to increasing the quantity of raw materials to be exported, and diminishing the inducements to imports of men, thus impoverishing both farmer and planter by throwing on them the burden of freight; while the other looks to increasing the import of men and diminishing the export of raw materials, thereby enriching both planter and farmer by relieving them from payment of freight.

One looks to giving the [products] of millions of acres of land and of the labour of millions of men for the [services] of hundreds of thousands of distant men; the other to bringing the distant men to consume on the land the products of the land, exchanging day's labour for day's labour.

One looks to compelling the farmers and planters of the Union to continue their contributions for the support of the fleets and the armies, the paupers, the nobles and the sovereigns of Europe; the other to enabling ourselves to apply the same means to the moral and intellectual improvement of the sovereigns of America.

One looks to the continuance of that freedom of trade which denies the principle of protection, yet doles it out as revenue duties; the other by extending the area of legitimate free trade by the establishment of perfect protection, followed by the annexation of individuals and communities, and ultimately by the abolition of customs-houses.

One looks to exporting men to occupy desert tracts, the sovereignty of which is obtained by aid of diplomacy or war; the other to increasing the value of an immense extent of vacant land by importing men by millions for their occupation.

One looks to the centralization of wealth and power in a great commercial city that shall rival the great cities of modern times which have been and are being supported by aid of contributions which have exhausted every nation subjected to them; the other to concentration, by aid of which a market shall be made upon the land for the products of the land, and the farmer and planter be enriched.

One looks to increasing the necessity of commerce; the other to increasing the power to maintain it.

One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level.

One looks towards universal war; the other towards universal peace.

One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world."

The American System turned the United States from a patchwork of disjointed British colonies into the world's most prosperous and most powerful nation. It is possible that in his effort to “Make America Great Again,” Trump wants to return it to that system. However, he obviously can’t come out and state this openly: all eight U.S. presidents who have either been assassinated or “mysteriously died” in office were promoters of Hamilton’s American System. Those presidents were William Henry Harrison (9th, 1941), Zachary Taylor (12th, 1850), Abraham Lincoln (16th, 1865), James Garfield (20th, 1881), William McKinley (25th, 1901), Warren G. Harding (29th, 1923), Franklin D. Roosevelt (32nd, 1945), and John F. Kennedy (35th, 1963).

I know, someone will object: nowaitjustaminute, FDR died of polio, everyone knows that! Sure, but that might have been fake news. In his memoirs, FDR’s son Elliott Roosevelt revealed what he learned when he met with Joseph Stalin in 1946. Below is an excerpt from Parade magazine published on 9 February, 1986:

Whatever the case, there have already been two assassination attempts at Trump and understandably, his administration must tread carefully, or advance their agenda in an utterly unpredictable fashion. The consequences is that economic uncertainty exploded to the highest level since the Covid 19 pandemic in 2020:

That’s not positive for the economy, but hopefully, as the chart above suggests, the uncertainty will subside as rapidly as it has exploded, and in the not too distant future we'll know much more about the future trajectory of global developments. In the meantime, I trust that trends will tell us what we need to know, at least so far as navigating the markets is concerned.

Alex Krainer – @NakedHedgie is the creator of I-System Trend Following and publisher of daily TrendCompass investor reports which cover over 200 financial and commodities markets. One-month test drive is always free of charge, no jumping through hoops to cancel. To start your trial subscription, drop us an email at TrendCompass@ISystem-TF.com, or:

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