EUR, Mueller, Economics: Levels, Ranges, Targets

As we watch Mueller and the unyielding Democrats perform the greatest coup ever seen in modern day government and in the history of every spy novel ever written, the clear result is the Obummer effects will be seen for many years in the future. Why Obummer revealed himself as a communist after hiding such revelations for 100 years informs exactly how powerful Dems became and the depths of government ownership throughout the agencies.

Electoral victory for the Democrats is a small win as the greatest prize they own is the Bureaucracy. Why the stacked deck is because the Democrats own the Civil Rights Division in the Justice Department. Civil rights in the modern day is defined as voter rights to any issue. Over many years, the Democrats appointed lefty attorneys then grew Civil Rights division funding to appoint more attorneys. Now the Civil Rights Division owns the Justice Department. Democrats laugh at multi year court fights as it doesn't stop their ability to play the long game.

Trump and the comatose Republicans either place a sledge hammer on the Democrat long game or they lose for many years to come. DACA is one example.

If Trump approves just 1 DACA child in today's meeting with la la Paloozi and "I cry for Immigrants" Chucky Schumer then the Republicans can expect to lose the House of Representatives in quick time. The Democrats will load voting age DACA children in Republican Districts and dominate those districts for many years in the future.

Fascinating political developments but understand Democrat public comments then one knows the plan of attack as the Democrats always reveal themselves.

Let's look at America;s next genius, Queen Yellen.

Total Public Debt to GDP Ratio is currently 103% and the highest since 1966. As highlighted by Jim Rickards yesterday and correct by fact check is Reagan;s tax Cut occured when the public debt to GDP ratio was 30%. At 103%, any tax cut is a minor band aid and its effects will last extremely short term.

To place 103% in context is to view data from Rogoff and Reinhart: 8 Centuries of Economic Folly, 1970 Debt to GBP ratio was 49%, 1981 was 30%, 2012 was 59.49% and today 103. Debt to GDP ratio doubled in less than 5 years. Astounding but extremely dangerous.

General Govt Gross Financial Liabilities as % of GDP in 1970 was 49% and 60% in 2012. Higher today and again dangerous.

Add the losing experimental concept to raising interest rates under a high balance sheet without any chance for reduction then the economic destructive course is underway. Further is the Senate Republicans non serious wish to begin Tax cuts in 2019.

The vast majority of previous crashes except for 1908 were caused by Government overspending as debts far exceeded ability to pay. America is close. Exports led the way out of the 1929 crash as the % of world exports declined 69% from 1929 to 1932. Exports bottomed in 1930 and Peaked from 1968 to 1973. Current world exports are now middle range but overall lack ability to assist in growth if a crash was seen. A severe drop must be seen first but then comes the 1930's concepts in exchange levels and Competitive devaluations to gain export advantage.

Smart as usual are the interest and exchange rate traders as ranges this week for all currency pairs severely restricted. Far worse among USD pairs is USD/JPY as current price cannot remain in its present location.This means watch EUR/JPY as well because its past lopsided price no longer contains built in resistance points. EUR/JPY is normalizing after many many months in off kilter status.

RBA wants to see AUD/USD 07000's. AUD has a better chance at 0.8000 before 0.7000. Current price is nearly exact at 50%. Higher means sell, lower then long.

EUR/USD. Break points 1.1805 Vs 1.1744. Above 1.1805 then comes 1.1840's.

USD/JPY break points 112.15 and rising 111.82. A massive brick wall today is seen at 113.15 and 113.10.

EUR/JPY break points 132.02, 131.72 and 131.55. Most important 132.02 and a break means far lower. Overall watch USD and non USD pairs rather than cross pairs for direction as they are leading the way.