G10, Deabt and Taxes: Levels, Ranges, Targets

 

Heraclitus taught the world “the only constant is change”. FX in year 2017 remains the same decades later as the experts are few yet the need is astoundingly great.

The DXY story, America and the political system as well as the economic implications are found in the OMB quote below.
“Between the first year and last year of the Obummer administration (2009 – 2016), the federal debt rose 46.6% from $11.9T to $17.4T. During the same time period, GDP rose 14.8%.”

“As a percentage of GDP, the debt rose from 82.4% to 105.2%. Debt growth outpaced GDP growth by 31.8 percentage points.”
“On average, the debt increased at a rate of 5.8% per year.” (Office of Management and Budget).

Corporate tax rates remain at the lowest levels in 75 years while Payroll FICA taxes at 7.5% remains fairly constant over decades. CPI is a misdirection as debt, 30,000 regulations and no wage or job growth added to American problems as corporations start of empire outside the United States by holding $3 to $5 trillion outside American borders.

America’s problems are deep and structural, mostly due to political dictatorship over 8 years. A win by Hilarious is questionable as to how much deeper dictatorship would’ve taken America and how much more debt would’ve been added. As a result, make America great again may take decades.

The “middle class” business category at $75 and $100,000 pays the same amount of taxes today as it did 38 years ago. Business formation and sustained profitability remain severely challenged. Imports exceeded Exports for 45 years as a positive trade balance hasn’t been seen since the early 1970’s. Policy prescriptions must encompass a deep tax cut and a drastic reduction of government otherwise America will continue a slow death to rot from the center.

EUR/USD must break 1.1961 to travel lower.

GBP/USD must break 1.3512 or 1.3548 above to travel higher.

EUR/JPY above remains challenged as resistance points are built into present price at 134.28 and 134.34. Below watch 133.61 and 133.44 for any bounce today.

Brian Twomey

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