The Duran Podcast - Bidenomics, accelerating the economy over the cliff

Episode Date: December 13, 2023

Bidenomics, accelerating the economy over the cliff

All right, Alexander, let's talk about the U.S. economy, Bidenomics. Biden says that Bidenomics is working wonders for the U.S. economy. What do you think? Well, this is the, it's not just a question of what I think. It's what a question of what most Americans think. And most Americans, according to the polling data, are not impressed by binonomics. And this is actually in some ways remarkable, because if you take the numbers seriously, the numbers are looking remarkably good. A 5.2% growth in the last quarter, GDP growth, in the last quarter, this is scorching growth and rising real wages, something we haven't seen in the United States, except, by the way, under the,

Donald Trump, briefly. But I mean, all of these things suggesting that, you know, things in the US economy are good. But what I suspect most people who actually live in the United States and work and turn up at work and, you know, are having to get by in the United States are probably aware of is, first of all, that the figures, aren't telling us the real story and that for most people, many people, prices, costs remain very high, higher interest rates, higher mortgage payments in many cases.

I do understand that in the United States, many people are protected by the fact that in the United States you have fixed rate mortgages to a much greater extent that you do say in the UK. So in the United States, fixed rate mortgages means fixed rate for 30 years. In the UK, it's typically just three. But anyway, I understand that.

But nonetheless, the interest rates must be hurting people in their credit card payments, in their bank loans, even in some cases in their mortgages. So one can understand why people feel that they've gone through a very high inflation. They've now going through very high interest rates. The cost of living isn't falling. It's not getting better.

And they are under some stress. But I think there's something more, which is that I think people also fundamentally sense that this whole growth story isn't real and that problems are accumulating in the economy and accumulating to an alarming degree. And we started to see all kinds of signs of this. Firstly, why is the economy growing so fast?

Well, I read somewhere that partly it is because people are still drawing down savings that they built up during the period of the pandemic. They were given large amounts of funding by the federal government during the pandemic. The Biden administration gave people even more immediately after the, pandemic in its first year. So there's still savings that people are running through. But as I said previously on other occasions, the major reason why the US economy is powering forward is because the United States government, the administration, is keeping

its foot pressed down on the fiscal accelerator. It's using the Inflation Reduction Act. to prime pump the economy. It's pouring money into the economy. And you see a deficit. Now, the budget deficit is apparently heading towards 8% of GDP, which is incredible. You see the United States adding,

well, I think it was a trillion dollars of debt, a quarter or something like this. I mean, unbelievable amount of money. You see the trade deficit is, expanding. It now, I believe, runs at something like 3% of GDP, which doesn't sound like a lot. But remember, the United States is basically a self-sufficient economy. It's a continental economy. But a trade deficit on that scale, again, speaks of an economy that is overheating and isn't able to balance its books well. One senses that before long, consumer spending is going to fall,

will probably have another surge. In fact, there's lots of telltale signs of a big surge in consumer spending going on in the United States and the run-up to Christmas. But I suspect the next year, probably in the first or second quarter, it will fall off a cliff. And there's already signs, apparently, that money supply. and volatility of money in the United States is declining, and that is usually a sign of a big recession on the way.

So, Bidenomics is not going so well. I mean, why the, what, yeah, go ahead. I mean, in Britain, we're very used to this sort of thing. We call it stop, go. You prime pump the economy. you goose up debt, you increase, most of the money, most of the money that's pouring in, by the way, contrary to what a lot of people are saying. Yeah, it's going into investment, but business investment in the United States is translating

at the moment mostly into share buybacks and things like that, not people investing in new industry and new plant. I understand that for much of this year, industrial up, which has actually been declining. So we have this. We have this recurring thing in Britain. You inflate the housing market. You inflate the stock market. You put money in people's pockets. You get a major surge.

You try and time it before the election. And, of course, we've got an election coming in the United States. And then after a certain point, that's the go. Then there's the stop. Everything stops. we have often quite a severe recession. Taxes then have to go up to try to cover the, you know, the budget deficit, which is by that point pretty much out of control.

And it looks to me as if bionomics is an American variant of the same thing, taken perhaps to an extreme that we've never quite seen before. So that's what it's still. only I think that they're risking a recession before the election rather than after it. Yeah, if a recession comes right, if it hits right at the time of the serious campaign and going on, then that's, I mean, it's already bad enough for the Biden White House. I mean, that would just be catastrophic. Oh, well, it would be the end.

It would be the end. That would be the end, yeah. I imagine for any Democrat, not nominee, because I imagine people will blame this on the Democrat Party. Absolutely. That is exactly what they would do. But the fact that we're now starting to see contractions in money supply in the middle of a spending boom is a sign that the underlying situation, the economy is not good. And that things are indeed, we are indeed, starting to move towards some kind of recessionary outcome. The reason why we're seeing contractions and the money supplied, by the way, is partly because interest rates are higher

than they were. People are, even as they're trying to spend, they're having to put away money and debt payments. Yeah. How does this affect all of the wars that the Biden White House is funding? Well, that's an excellent question, because of course, part of the prime pumping, and in The extraordinary thing is that actually bragging about it at the moment, part of the prime pumping is in the form of extra spending on wars. They're going around telling everybody, you must keep all the spending going on for Ukraine because all that money was spending for Ukraine

actually remains of the United States. It just goes to the arms industry, and that's making the arms industry hum and buzz and do all of those sort of things. in practice and in fact if you really want to prime pump and economy pouring money into the defence sector is just about the most inefficient way to do it but that's another thing if we have a recession there's going to be a big budgetary crisis on top of the budgetary crisis we have already and at that point it's going to become absolutely, I would have thought, impossible to sustain funding for the walls

to anything like the same level that we're seeing at the moment. I think if we have a recession in next year, it will be impossible to keep up spending for Ukraine. Yeah, maybe that's why they want to get the 60 billion. No, sorry, authorize now. Authorized now. Yeah, authorize it now. Okay. Any other thoughts before we sign off on this video?

Well, absolutely. Well, I would just say also, I mean, again, we see if we see a contrast with the two other big economies that are taking place, that now the United States' big geopolitical rivals. Russia has also increased interest rates, but there, as we've discussed, and in contrast to the United States, we are seeing an industrial boom, you know, major investments in infrastructure and in industrial output. and there's been articles in Bloomberg about all of the entrepreneurs who are now moving in

to fill in all the niches in the Russian economy that the Westerners were vacated. I think a lot of people think that this is unsustainable. There will no doubt be jags and contractions and things in Russia's economic

development going forward. But to me this looks increasingly permanent. And of course, in China, we are still seeing considerable problems in the real estate sector. There was a big article in the Financial Times about China going through economic crisis. The latest PMI figures in China were just below, they were 49, which pointed to a small contraction rather than to an expansion. But I was reading about the crisis. in China and they were saying that around

there's a mass of bankruptcies in China but it so far only relates about 1% of the population of working population apparently which again to somebody who's experienced of things in Britain that doesn't look to me like a crisis exactly so next year even as the United States moves on to perhaps a recession of its own, we might start to see

some kind of Chinese recovery takes steam and perhaps a continued surge in Russia that would perhaps be even more politically damaging for the Biden White House in the election going forward and beyond the election, whoever the next president is going to be, whichever administration is going to come, they're going to have an almighty job clearing up the mess that has been created now.

All right, we will end it there. The durand.com. We are on Odyssey, Bitschute, Rock Finn, Rumble and Telegram and Twitter X, and go to the Duran shop, 20% off. Use the code, the Duran 20. Take care.