Black Friday Hits All-Time Record of $3.34 Billion

Black Friday sales hit an all-time high record of $3.34 billion or 21.6% growth year-over-year. Mobile accounted for $1.2 billion of those sales, a 33% increase from the previous year. TechCrunch writes

Combined with yesterday’s $1.93 in online sales on Thanksgiving, the two days are expected to close out at nearly $5 billion in sales. Top-selling toys included Lego Creator Sets, electric scooters from Razor, Nerf Guns, DJI Phantom Drones, and Barbie Dreamhouse.

The Doctor Of Common Sense says about the major indices hitting all-time highs, “Do you believe that this is a coincidence? I’ve been telling you everything that liberals do their whole policy with their communist and social policies, they never work. All you have to do is look at how bullish the market is.” The Doctor Of Common Sense also uses Black Friday’s record sales as proof of failed Democrat and liberal policies although he fails to logically back that claim up. Check out what Doctor Common Sense has to say in the video below.

Nothing against The Doctor Of Common Sense but this is what I was afraid of. When everyone is coming out declaring how great Trump is and how bad liberals have been and citing the spike up in the stock market as proof, that’s when the market is most likely to take a turn down IMO.

This Trump Rally is mostly nonsense and hype IMO. Trump hasn’t even taken office yet. The P/E on the S&P 500 has moved higher since the election and is not supported by anything fundamental.

On the chart above, the gold line is the P/E ratio of the S&P 500 which is at a troubling high of 25.46. The red line is earnings, and the blue line is the S&P 500.

If you thought the market was overvalued before the Trump election, you must be freaking out over this latest spike up.

The stock market going up is not proof of failure by Obama and Democrats. The stock market is going up because there are more buyers than sellers and from short covering. From a market psychology perspective, greed is prevailing over fear right now. That’s it. Assigning stock market direction as proof to justify your personal political bias will result in the rapid demise of your trading account.

Don’t get me wrong; I’m a Trump supporter as you already know. But let’s be real about market valuations. Chasing markets higher because of Trump mania is a dangerous game IMO. I think a lot of amateur traders and investors have the potential to get hurt from this Trump rally when it finally comes to an end.

Mexico Devalues Peso To Dominate Auto Production In North America

Mexico is devaluing its currency to gain a huge advantage in international trade. Democrats and the Obama Administration have done nothing to stop it.

Like most economists, I am for free trade; however, free trade today is not Adam Smith or David Ricardo envisioned hundreds of years ago. The classical concept of free trade works because of comparative advantage. The idea is that because of Colombia’s unique topography and economy, it can produce a higher quality coffee bean using fewer resources than the US. The US can produce higher quality machinery using fewer resources than Columbia. The US and Columbia can then trade coffee beans and machinery to which it is beneficial for both countries. Each country has different goods it can produce with a comparative advantage over other countries. These countries then engage in international trade, and it raises the living standards of all countries. Honest, comparative advantage is what Trump refers to as “smart trade.” Today that is not what is happening with international trade.

The essence of international trade is that if two countries engage in unrestricted trade, free of tariffs and quotas, and other market restrictions, and, if these countries abide by the principles of comparative advantage, both countries are likely to experience gains from trade. In other words, free trade in this simplified Ricardian world is a win-win for both countries. However, in the real world it’s important to understand that free trade between two countries is much like a marriage. If one partner cheats on the other, the relationship simply will not serve both partners’ interests.

In the context of the Ricardian free trade model, if one country cheats by using unfair trade practices, like illegal subsidies to promote its exports, or employs tariffs and barriers to protect its own markets, free trade becomes much more of a zero-sum game, in which jobs and growth shift to the cheater, at the expense of the country being cheated upon.

In the early part of the 21st century, we witnessed just such a problem between China and much of the rest of the world. When China joined the World Trade Organization in 2001 and gained access to new markets around the world, it promised to abide by the rules of free and fair trade. However, over the next decade and beyond, China would systematically engage in unfair trade practices ranging from currency devaluation and the use of illegal export subsidies, to the theft of intellectual property, and the requirement of forced technology transfer for foreign corporations entering the Chinese market. All of these violations, of both the spirit and letter of the world’s free trade laws, would lead to a major structural shift in manufacturing to China at the expense of growth and jobs, in many other countries and regions, including both the US and Europe as well as Australia, Canada, Mexico, and much of both Latin America and Africa. This was certainly not how David Ricardo envisioned free trade.

Here is how currency depreciation and currency appreciation is supposed to work.

This figure illustrates how exchange rates are determined by the forces of supply and demand in the global marketplace.

We are looking at the market for Dollars versus Pounds. Note that the equilibrium exchange rate will occur at the intersection of demand for pounds D1 and the supply of pounds S1. If you want to buy one British pound, it will cost you two US dollars.

Exchange rates rise and fall over time. If a country’s currency gains in value relative to another, it is said to appreciate. In contrast, if a country’s currency loses value relative to another, it is said to depreciate.

Now let’s illustrate what happens when a recession hits the US.

In a recession, US income will fall relative to British income, as a result the US will buy fewer British imports, and therefore need fewer British pounds to do so. This will decrease the demand for pounds, and shift the demand curve inward (left). The result? The dollar appreciates relative to the British pound.

As British investors trade their pounds for dollars in global currency markets, this increase in the supply of pounds leads to a rightward shift of the supply curve. In the illustration below, it now takes only $1 to buy a British pound, rather than $2.

In otherwords, it’s a self adjusting mechanism or floating mechanism. This type of monetary system is called a floating exchange rate system. However, not all countries of the world allow their currencies to float. Instead, both Mexico and China use what is called a fixed exchange rate system. In a fixed exchange rate system, a country will peg the value of its currency tightly to the value of another, most often, the US dollar, or a basket of currencies. The country will then make the necessary adjustments to maintain the value of that peg at whatever level is most advantageous to their own economy.

US trading partners like China and Mexico engage in currency devaluation to gain a comparative advantage over their trading partners. As a result, most everything can be produced cheaper in Mexico than in the US. Check out the chart of the Mexican peso.

Mexico’s currency devaluation means that US automakers are continuing to open manufacturing plants in Mexico at the expense of US and Canada workers. Mexico is increasingly dominating auto production in North America as the chart below shows.

As long as nothing is done to penalize US manufacturers, the movement of production plants to Mexico at the expense of US workers will continue. Currency devaluation is an error in modern macroeconomic analysis and international trade that economists never factored into their equations until recently. In my studies of Adam Smith’s The Wealth of Nations, I find that Adam Smith doesn’t seem to grasp the harmful effects of currency devaluation on free trade.

Hillary Clinton and Democrats are a complete lost cause on this issue because of political correctness and years of left-leaning economists that control the education establishment. The Wall Street Journal writes

Among 17 Republican appointees who responded to Journal inquiries, none said they supported Mr. Trump. Six said they did not support Mr. Trump and 11 declined to say either way. An additional six did not respond to repeated messages. Among the 21 Democrats who responded to the Journal, 14 said they supported Mrs. Clinton, none said they opposed her and seven declined to say either way. One Democratic appointee didn’t respond to messages.

I have donated money and much economic analysis to the Trump campaign in an attempt to shape Trump’s economic policy should he become President. The time to communicate with Trump is now. Once Trump becomes President, he will be too busy to take ideas from the general public. One of the debates among economists that support Trump is whether Mexico should be penalized more, or if the US manufacturer should get most of the punishment (fines) for moving production to Mexico. If you penalize Mexico too much, you’re a racist. If you punish US manufacturers too much, you’re a fascist anti-capitalist. I’m for penalizing US manufacturers more than Mexico because I believe that Mexico has such a pathetic currency because of their weak economy, which is frankly not our problem and none of our business. I believe in the power and rights of sovereign countries, and I don’t want to “get up in Mexico’s jello.”

I don’t want to penalize Mexico with tariffs because that could create a trade war. An example of this was the Smoot-Hawley Tariff Act of 1930, approved by the US Congress. The Smoot-Hawley Tariff Act of 1930 imposed some of the highest tariffs ever enacted in US history. While it was designed to protect American jobs during the onset of a severe recession, it backfired miserably. As one nation after another retaliated with its own restrictions, the resultant trade war helped push the entire global economy into the Great Depression.

Trump has struck a compromise between economists that support him by taking a few ideas from both groups. Trump wants to use tariffs against Mexico to nullify the tactic of currency devaluation and penalize US manufacturers with fines. I favor a hard-line approach where any US manufacturer that produces products in Mexico will be cut off from the US consumer. If a US manufacturer wants to produce products in Mexico, they have to sell those products in Mexico or other countries and not the US. Any international corporation that intends to sell to US consumers will be required to produce those products it sells inside this country using American citizens for its labor force. Radical, I know, but the art of negotiating, of which Trump literally wrote the book on, is all about going way overboard, and then letting your opponent think you are moving back to the middle in the spirit of compromise.

I’m starting to see more left-leaning economists agree with me on the error of currency devaluation in the economic models within the macroeconomics framework of international trade. Unfortunately, I don’t think a few economics professors going against the liberal establishment is going to change the system. I think a general uprising by American workers will be the only way economics professors and the liberal macroeconomics establishment will change. In my opinion, Trump represents the beginning of this awareness and general uprising against the establishment by working class citizens in the US. Donald Trump has done an excellent job of trying to teach the average American about the harmful macroeconomic impact currency devaluation has on their local job market. Economics, currency devaluation, and international trade are at the essence of what I communicated to the Trump campaign to talk about in the debate next week against Hillary Clinton.

Orlando Could Have Been Prevented With This Simple Technology

On the weekly Saturday night show on YouTube, I have repeatedly warned against liberal Democrat ideology in regards to the ISIS threat. Long time listeners know that very early on, I endorsed Donald Trump because of his no nonsense approach to keeping American citizens safe.

In college, I had to take several multiculturalism courses in order to get my teaching credentials to teach in the California public school system. I remember when my instructor said, “Everyone has the right to be equal, and the equal right to be different”. To which I shouted out, “Yeah, but the right to swing your fist ends at my nose!” Needless to say, I didn’t have much of a future in liberalism and becoming a public school teacher.

In the name of multiculturalism, our politicians are allowing thousands of potential terrorists inside our country without any type of monitoring whatsoever. The reality is that terrorist attacks are likely to become a regular occurrence in the U.S.

The recent attack at at gay club in Orlando was inspired by ISIS. This attack was not a surprise for those of us who are Donald Trump supporters.

Many politicians are calling for a ban on automatic weapons. Others are calling for a much more armed citizenry. Still others are calling on more gay acceptance policies to be forced down everyone’s throat.

Folks, I told you redefining marriage to be between a man and a man was only going to create deep hidden resentment across most of the populace. They should have just created another classification of union, and called it something like he-marriage or just harriage. With all the perks of marriage except no tax breaks for harriage as those tax breaks are for married couples who are giving birth to children to propagate the human race which is, uh, sort of freaking important.

The answer is not for the populace to arm themselves to the teeth. Why? Folks, I don’t want to be mean but the average Joe is sort of stupid. Take the guy at the Orlando night club, the so called “good Samaritan” that said to Megyn Kelly on Fox News that he held the door to trap the shooter inside so he couldn’t escape. Megyn said, uh, how do you know you didn’t also prevent innocent people from escaping by doing that? The dude actually said well, I did feel some pushes on the door but I didn’t know if that was people trying to escape or the shooter trying to escape. Gosh, I hope I didn’t stop people from escaping by holding the front door shut I was just focused on not letting the shooter get away. Sort of stupid, right? If you didn’t run out the front door before that “good Samaritan”, you were basically trapped inside with the shooter because that dumb arse was holding the door shut! Now think about it folks. You think giving a gun to someone like that is going to save the day? The guy would probably shoot a bunch of innocent people and his excuse would be that he was trying to get a clear shot off, and people kept running into his bullets! Trust me. Arming the average Joe is only going to increase the probability that more innocent people are shot. I would prefer to let the trained professionals do their jobs. I mean if you could guarantee that everyone that was armed with a gun was a trained marksman that was trained not to panic and only shoot the bad guys, I’d be all for everyone armed to the teeth. But again, the reality is that the average Joe holding a gun is not going to have that type of crisis training or marksmanship. Plus, this was a nightclub with alcohol and it was like 2 AM in the morning. Most of the people there had a buzz and probably could barely stand, let alone squeeze off a kill shot to the attackers head. Please go drink some reality coffee and sober up from that NRA ad buzz please.

The answer to prevent an Orlando attack is so simple and obvious. Don’t mess with guns, gay rights, or anything else. Use technology to enforce “speed traps”.

The FBI had interviewed the Orlando murderer twice. They didn’t have enough to hold him. Fine. What they could and should have done was to flag him for a “speed trap”. What that means is that if certain behaviors are exhibited, the FBI is granted a court order to intercept and search a person’s home.

Speed traps should be used in the event of an FBI investigation that ends without enough evidence to prosecute an individual.

A speed trap is a technology implementation in existing databases already under government regulation. For example, in the weeks leading up to the Orlando rampage, Omar Mateen went out and bought a freaking AK automatic assault weapon and an automatic hand gun with a ton of ammo too! A speed trap on the gun check database, would have alerted local law enforcement to intercept Omar at the gun shop before he even walked out the door. A speed trap can be put on a credit card in the event of a purchase of large quantities of fertilizer and other bomb making materials.

It’s so simple folks! Databases have been around for decades. This solution gets around freedom of speech, gun laws, discrimination laws, and every other existing law in our free society. It lets law enforcement more effectively do their job without compromising the rights of law abiding citizens. Again, speed traps are only used on an individual the FBI is called out to investigate. Speed traps are not a criminal record and law enforcement must keep the identities of people in the speed trap database private.

Technology is the answer for many things. Why is law enforcement operating at such a low tech level? I have access to technology that can actually watch what every visitor does on this website, even down to tracking how they move their mouse over a web page! Give me a break. If I have access to such technology as an Internet marketer and website owner, why can’t law enforcement have access to better technology for tracking radicalized ISIS sympathizers?

Arming the populace, disarming the populace, forcing gay studies on every college student, battling ISIS ideology, these things are not the answer. We have to get smart and that means the better use of technology to track individuals that are reported to the FBI for possible terrorist connections. Reports are that a gun shop owner called the FBI about Omar 5 weeks ago! With speed trap technology, as soon as Omar purchased ammo or guns, the FBI and local law enforcement would have been instantly alerted. Such a speed trap algorithm would go something like:
If Muslim, then If connections to ISIS, then If complaints by co-workers/family/friends, then If FBI interviews and person seems psychologically unstable but not enough to hold, then If person purchases automatic weapon or large amount of ammo or bomb making materials/chemicals, then send local law enforcement to search home IMMEDIATELY. I’m not a profiler so I don’t know all the “IF” statements in the algorithm that should be used, but you get my point.

It’s not just about getting smart. We have to get tough. Law enforcement should have breached the building faster. Local police and SWAT waited outside the nightclub for hours before deciding to breach the building. Police and SWAT should have been on scene within minutes of the first 911 calls and they should have breached the building a few minutes after that. In Israel, they breach buildings within minutes because they know the longer they take to breach, the more people are killed. It’s a race against time.

The bottom line? We have to get smarter and tougher. Use technology to cut down on man-in-the-middle delays, and to automatically track the activities of suspects through the implementation of speed traps. When certain behaviors are exhibited by someone who has been reported to the FBI on multiple occasions, move in fast. Get tougher by breaching a building within minutes instead of hours and protect police from accusations of racism and discrimination. Police aren’t going to get tougher if they are too worried the Justice Department or a liberal Attorney General is going to accuse them of racism imo.