President Trump’s Kobayashi Maru scenario

Posted: February 13, 2017 in Uncategorized

From the Star Trek series – a famous episode when  Captain Kirk is confronted with an no-win scenario (and he rigged the system to win it).The test was considered a no-win scenario because it was impossible for the cadet to simultaneously save the Kobayashi Maru, avoid a fight with the alien  Klingons and escape from the neutral zone with the starship intact

Trump as a similar unwinnable scenario where it is almost impossible to save the US economy after almost 93 month of expansion (3 longest streak, 1850 (120), 1960 (106)and at the same level of the 1991 (93) – average 58.5)

The first one is the one spurred by the media at large that Trump economic agenda simply will not work as they are not well thought and will provoke trade wars so US will stall and go in recession by US Summer 2017.

It is discussed every day in the media so i will not delve further into it.

The second scenario is the one in which the Trump policies (tax cuts and infrastructure spending) do work for real.

In this case the issue is that these policies are coming too late in the economic cycle (US already in recovery mode and with employment capacity almost at full level).

Such a large stimulus will likely push the US hourly wage increase over 3%. This is the indicator that the FED is looking the most to decide if and when rise the interest rates.

The Fed will slam the breaks (increase interest rates) and plunge the US in recession by US Summer 2018.

Could President Trump rig the system as in the movie. Yes but a bit much to explain how in this blog.


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