Issues, News & Views

Who will be the
2016 candidates
for President of
the United States?



Donald Trump has come out
of nowhere and stolen the
show. He seems to have
captured the zeitgeist, the
spirit of the times. Can it last?

Who, from among this
strong, diverse field , will
emerge victorious to return
the GOP to the White

With the inept Obama
Administration in its final
days, one would have
expected that experienced
governors with a record
of accomplishment would
dominate the Race 2 Replace
but outsiders and novices
Trump, Carson and Fiorina
are in the hunt! Seasoned
executives for sure, but
not the ones the beltway
had in mind!



The creaky, rusty Clinton
machine grinds slowly
onward, wayward, relying
solely on muscle memory
for movement. Will
Democrats suddenly rise
from their slumber to the
realization she cannot win a
General Election?

Is Hillary a foregone
conclusion, or will
someone else swoop in and
steal the show?

Folks on the right can barely
contain their joy at the
prospect of a Clinton
candidacy. Shouldn't that
give pause to the Democrats?
Biden and Warren are both
better candidates and better
Democrats than Clinton, but
aren't even in the race. And
then there are O'Malley and
Sanders, again, both better
Democrats and better
candidates. Yet the Dems
seem intent on following
Clinton in a lemming-like
charge over the cliff.


2016/07/28 - We herewith present to you our semi-annual update on global economic prospects. In a nutshell, the overwhelming likelihood is for more of the same of what we have experienced for the past seven years: tepid, sluggish growth, low inflation and interest rates, and an expanding government sector.

The expanding government sector represents a major structural concern for the intermediate to longer term, but not the immediate present, so we will first consider the situation as it is. We don't expect a United States recession in the next six months, just slow growth. A catalyst for an economic pullback has not yet appeared on the horizon, though many issues lurk just beyond.

Surging oil prices have triggered almost every recession in the past fifty years. Even the 2008 recession, commonly blamed on housing, was preceded and ignited by $140/barrel oil. It takes little imagination to understand how what was called "the greatest wealth transfer in human history" - that is, from the West to OPEC - could trigger a recession in the "from" countries.

Fortunately, technological advances in the petroleum extraction industry over the past fifteen years enable domestic producers to provide global markets with what is for all intents and purposes an infinite supply of oil if prices ever again approach $60/barrel. Our supply-and-demand based free enterprise system, along with "fracking", as the technology is colloquially referred to, mean the end of oil price recessions for the next twenty to fifty years, perhaps forever.

After oil prices cratered back in the winter - and indeed overshot to the downside - they recovered to top the $50 mark last month, only to fall back to the $40 mark recently. Copper has had a move upward to $2.20/lb, reflecting, again, a steady but slow-mo economy. Baltic Dry shipping has also recovered somewhat, reflecting both a pullback of supply and diminished fears of a China collapse.

China has been a major economic force for decades, but that dominance is receding. The absolute population has peaked and the existing population is aging. Growth is slowing from eye-popping rates to mid-single digits and will continue to slow to levels expected of mature, developed economies. China will no longer be a major force in global economic expansion, or commodity price bubbles. That story is over. The bigger story now is China's debt overhang...

After a boom and bust cycle over the past year, the Shanghai Composite seems to have settled into a comfort zone around 3,000. China continues to slowly, almost imperceptibly, devalue the Yuan with exchange rates drifting from the mid- to upper-6 range - don't be surprised if it hits 7 by year end. Clearly the Chicomms are trying to sustain their decelerating export-based economy, while their Chairmen deny any such thing.

The dollar continues to hold steady against the Euro in the $1.10 range. The Pound took a leg down to the $1.30 mark after the June 23 Brexit vote, but has held steady of late. We do not believe that Brexit is a major game changer, and if anything, contrary to the opinion of the elites, we believe it represents a net loss to the EU of one of its strongest members, and a gain to the British as they shed themselves of a layer of excess government, and free themselves to follow their instincts which are more oriented to free enterprise and individual rights than the continentals.

We believe that US equity markets are fully and fairly valued and should drift slowly higher as the economy continues to limp along. Any pullbacks, such as the knee-jerk plunge that accompanied the Brexit vote, should be viewed as buy opportunities; and any sudden surges should be seen as selling opportunities.

So where are the risks? What are the threats that may be lurking just over the horizon?

Geopolitical risk is always a black swan. An excessive provocation by North Korea could plunge southeast Asia into warfare with severe negative implications; whereas a take-down of the Kim regime by a faction supporting reunification could be a strong catalyst for market gains in the short term and longer term global economic growth. But known risks are everywhere - Russia, China, the Mideast, India-Pakistan - and of course there are the unknown unknowns .

We believe that the greatest predictable risk is the cost of the already-massive scale, and seemingly unstoppabe growth, of Big Government worldwide. Big Government could fuel the next global economic upheaval. In spite of massive monetary and fiscal stimulus, global economic growth is hampered by taxes, handouts, and regulation.

Increasing existing taxes and imposing new taxes sucks the nutrition and energy out of the productive economy. From whence then does the incentive to invest come from? And where from comes the capital for business reinvestment and job creation, if that capital is expropriated in the form of higher taxes?

Handouts in the form of various programs such as welfare, unemployment insurance and so forth, however well-intended they may be, are counterproductive. The prosperity of any community is measured in terms of the value of its output, and when people are not working, that community will suffer diminished prosperity. When government programs create a survivable lifestyle of poverty then the work ethic of the community is extinguished and replaced with an entitlement mentality.

Excessive regulation harms the economy. Ever more rigid employment regulation disincentivizes hiring - creating both the "income effect" of diminished economic growth, and a "substitution effect" of replacing labor with automation.

Big Government is not sustainable most obviously because the cost of it continues to grow like a cancer, but just as importantly, because it suffocates the economic growth that generates the tax revenue it needs to survive. The more Big Government grows, the more it spends, the more tax revenue it needs, and the less revenue the economy is capable of generating. The only option is to borrow and increase the debt.

Our national debt is nearing twenty trillion dollars ($20,000,000,000,000!) while our economy is only expected to be $18.4 Trillion this year - a dangerously high debt/income ratio greater than 1, of 109%. When President Obama took office in 2008 the ratio was only 72.1% ($10.6T/$14.7T). Under Obama, the economy has grown by only $3.7 Trillion while the debt has grown by $9.4 Trillion.

Right now the federal government can survive its high debt because interest rates are low. Long term US bonds are presently yielding about 2-1/4%. That's an extremely low rate indicative of strong creditworthiness; whereas the federal government's 109% Debt/GDP ratio is indicative of a chaotic fiscal situation on the brink of spiraling out of control. Yet yields continue to fall, while our indebtedness continues to increase. Yields and debt should move in the same direction. It defies economic common sense that the debt levels and interest rate levels are continuing to move in opposite directions.

The two rates of 2-1/4% and 109% can't live together forever - something has to give. It can only end with a reset of US government finances, currency and debt. And the longer it takes the worse the day of reckoning will be. The time to start - to start - owning gold is probably now. This is not a "party" you want to show up late for. The Death Star is not yet within sight, but we suspect it lurks not far beyond the horizon either.

We would be shocked if the Yellin Fed were to raise interest rates prior to the election. That means a slow "melt-up" in stock prices through the year-end "Santa Claus rally". By January a whole new slew of risk factors - including an increase in interest rates - could be on the horizon. So for the short term US Equities continue to look good, but consider potentially lightening up on stocks and buying gold between Christmas and New Year's.


July 27, 2016 - Today all charges have been dropped against the three Baltimore police officers still awaiting trial in the death of Freddie Gray.

This site has commented from time to time on the complicity of city officials in the death and destruction that followed in the wake of Mr. Gray's death, including the incompetent mayor.

Nor is it certain that the police were faultless in Mr. Gray's demise.

But the true villain in this sorry episode is the pompous grandstanding city prosecutor Marilyn Mosby who turned the situation into a circus, denying both the accused and the accuser any likelihood of justice.

Mosby already had failed to convict any of the first three officers to face trial, and today proceedings were to begin on the next trial.

But with little chance of any convictions, and facing mostly downside risk for her career potential, Mosby has finally realized it is time to throw in the towel. With egg all over her face, Mosby was forced to drop all charges and mope away from the courthouse with her tail between her legs.

Good riddance. Nothing worse than ambitious prosecutors who trample over peoples' rights to advance their careers.

And then there's US Attorney General, Democrat Loretta Lynch, and the DOJ's investigation of the Baltimore Police Department. Their efforts would be better invested in going after crooked prosecutors like Democrat Marilyn Mosby.

July 18, 2016 - Here's a big surprise: Baltimore prosecutor, Democrat Marilyn Mosby, fails AGAIN!.

Baltimore police officer Brian Rice has been acquitted of all charges in the death of Freddie Gray.

Chalprem does not claim that Rice was necessarily innocent, nor is this site defending the actions of the six Baltimore officers who were charged. Sometimes law enforcement can get out-of-hand, indeed downright brutal. Towards both blacks and whites. Some cops are bullies, that's why they got into police work. Most cops are great, some are dirty, some are violent. Like all people.

But self-aggrandizing self-promoting self-interested prosecutors such as Baltimore's Marily Mosby should attract the ire of all citizens of this land. She turned this already sad situation into a national disgrace.

With three not-guilty verdicts and one mistrial, Mosby is now a dismal 0/4 prosecuting officers in the Gray case. It is possible that some of these officers are guilty of some crime, and if so, a more responsible less self-seeking prosecutor would have nothched a few victories by now.

July 14, 2016 - An individual has mowed down 84 people in Nice, France.

This not-so-Nice person of Tunisian background drove his truck through a large crowd that was celebrating the French Bastille Day holiday.

At least a hundred others have been injured, with the casualty count climbing.

As usual authorities are unwilling to publicly draw any connection between the individualís religion and his actions. After all, people of all religions routinely commit mass murder in the name of Allah.

Chalprem will make the bold prediction that the individual will be determined to be a Muslim, a determination that has already been made by authorities who will not allow the information to be mentioned in the public domain until sometime after the news cycle has died down. Just a hunch.

Authorities will not make such bold (not!) assessments publicly, because if they make such connections then they will be compelled to take certain appropriate actions which they are too scared or naÔve to take.

Their country is at risk in a way that it hasnít been since the year 732 AD. Is there a Charles Martel anywhere to be found to save them?

July 05, 2016 - Unbelievable - that's the only way to describe Jim Comey's presser today.

Much as been written about Hillary Clinton's blatant, shameless influence peddling - for example, check out Peter Schweizer's brilliant exposé "Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich".

The Clintons operate a crime syndicate known as Clinton Global - they should be indicted for racketeering.

But, says Comey, she didn't intend to be guilty. So it's okay.

One set of laws for the Clintons and their ilk, another set of laws for us normal people. Maybe it's not so unbelievable.


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