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Trump: The Self-Deluded Man

What made The Donald so great? Really...?

OUR GUESS is not that Trump is a phony but that he doesn't know what he is, writes Bill Bonner in his Diary of a Rogue Economist.

No one is really a "self-made man". Circumstances shape us all.

Napoleon, had he been born in the 20th century rather than the 18th century, might have run a hedge fund. Catherine the Great might have had a show at Vegas. Sir Isaac Newton might have launched a killer app.

The Donald had the good fortune to be born at the right time and the right place. He is the third generation in a family of successful builders. And he began his career at the beginning of the biggest real estate boom in New York history.

But why was there a boom in the first place?

Why is the Grand Hyatt, formerly the Commodore Hotel, worth so much more today than when Trump got an option to buy it for $10 million?

And why is The Donald so damned rich?

We'll come back to that...

Trump is hero to the guy who drives a pick-up, the fellow who runs a small business, the homeowner who tries to make ends meet...

All of them vote for Trump.

They know the game is rigged. They don't know how it works...but they see Trump as man enough to do something about it.

He is the champion of all the "losers" – mostly working-class men, left behind by globalization, financialization, and technology. They haven't had a real pay increase in 40 years. And all those jobs the Obama administration says it has created? They all went to immigrants!

"Don't believe those phony numbers," he says of the feds' unemployment delusions, following up with his own delusions immediately. "The number's probably 28%, 29%, as high as 35%."

And the Fed governors? They're "idiots," says Trump.

What about competition from immigrants and foreign suppliers?

"Build a wall!"

We pause to note that trade walls got a bad reputation after Smoot met Hawley.

In June 1930, Senator Reed Smoot and Representative Willis C.Hawley jacked up tariffs to record levels on more than 20,000 imports into the US...and helped to bring about the Great Depression.

But heck, there are a lot of ways to bend prices: Restrict sellers from offering their products. Block working people from offering their labor. Create a money system based on credit from the banks. Enact regulations...requirements...ZIRP...NIRP...minimum wages...price setting name it.

What leads us to focus on Trump is that he is the most artful scalawag in American politics. The rest – Cruz, Rubio, Clinton, et al – are obviously on the make. They use bombast, lies, and pandering to get ahead. Mr.Trump already is ahead. He doesn't have to lie or pander. And bombast? You can't blame a tiger for his stripes!

Besides, he is right: The system is corrupt. And he knows it as well as anyone.

Trump does not need to take bribes. He's a rich guy. Instead of taking bribes, he bribes others. He is not bought; he buys. The Clintons came to HIS wedding, he points out.

But probably unbeknownst to him, he is beholden to Deep State finance, too. He borrowed phony Dollars. He bought. He built. Then, as his buildings rose in value, he had more collateral, so he was able to borrow more.

And more. And more. He was using the Fed's cheap credit to finance real estate in the heart of the financial world.

Now, he looks in the mirror and sees a genius, with collateral worth $10 billion more than his loans. A self-made billionaire, he's proof that you can still make it big in America if you are ballsy enough.

He's smart. He's brash. He's successful. But he didn't make himself great. The credit system did. And it can break him, too.

In the coming tempest of a credit contraction, even a great real estate empire could be swept away.

New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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