The driving catalyst behind the furious market rally since the presidential election has been the market’s hope that Trump will unleash a “huge”, still undetermined, debt-funded financial stimulus package, which will grease the volatile handover from monetary to fiscal policy, boosting inflation and rerating risk assets higher. Indeed, the market was so transfixed by this hope, that it has so far ignored all warning signs, duly noted previously on this website.
Nearly a month ago, we warned that when comparing Trump’s proposed budget and the House’s own budget blueprint, “An Unexpected $12 Trillion Hole Emerges In Donald Trump’s Plan To “Make America Great Again“.”
As we first demonstrated, there was a massive $12 trillion debt difference between the plan that Trump espoused, which envisioned a $5 trillion cumulative increase in debt…
… compared to the budget blueprint approved by the house earlier this year, which in turn seeks to reduce the deficit versus current projections by $7 trillion over the next ten years, mainly through spending cuts: the result is a $12 trillion “hole” between the Trump and the House budgets.
This post was published at Zero Hedge on Dec 12, 2016.
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