“And you know something is happening
But you don’t know what it is
Do you, Mister Jones?”—Ballad of the Thin Man; Bob Dylan 1965
Tomorrow, March 15, we celebrate the 2,061st anniversary of the assassination of Roman military dictator Julius Caesar. He was replaced by an oligarchic dictatorship. Further, the US Federal Reserve Open Market Committee (FOMC) meets to decide to raise interest rates. Not raising US interest rates will put “The Fed” in the same position as Julius: dead to the world.
Two other historical events that happened on March 15 may be of more significance. In 1917 Russian Czar Nicholas II abdicated the Russian throne, opening the door to at least 100 million being killed by Josef Stalin in the USSR and Mao Zedong in the People’s Republic of China. On this date in 1938, crude oil was first discovered in Saudi Arabia.
Two other events happening on Wednesday may be of more significance to us than the Fed meeting. The Netherlands goes to the polls to elects its parliament and the US government reaches its “debt ceiling”.
Bob Dylan’s lyrics were in part a takedown of those that think they know it all but don’t. On another level, most of us are “Mr. Jones” trying to figure out what is going on during this time of global political/economic hell. It is difficult to understand why those people who voted for Duterte, Donald J. Trump and who may vote for Dutch candidate Geert Wilders or French presidential aspirant Marine Le Pen are so vilified.
Even the pope of the Roman Catholic Church has negatively weighed in on the current “populist” movement against the establishment and its government. His statement “populism is evil and ends badly as the past century showed” drips with irony. In times of crisis, he said, people “look for a savior to give us back identity”.
Were it not for Christian populism—the unsophisticated “little man” against the corrupt dominant elites—2,000 years ago, Jorge Mario Bergoglio might have spent is life working as a nightclub bouncer in Buenos Aires.
If Wilders’s political party wins the most seats as it is now on track to do, the election will throw the Dutch government into chaos, as all the other parties have said they will refuse to form a coalition government. Further, it will show that this “evil” populist movement is not over, leading into the French elections in April and May.
While the FOMC is raising interest rates, the US government will potentially run out of money by October, being unable to borrow more as the debt ceiling extension expires. Of course, the “Congressional Clown Circus” will raise the debt ceiling after some theatrical wailing because no one wants to fix the debt problem. It will eventually take a crash and burn to set things right.
As an historical note, the Fed doubled interest rates between 1927 and 1929 and the stock market also doubled in price. What happened next was “nobody’s fault”.
The Ides of March was supposed to be determined by the first full moon of the New Year. It was also the festival of the deity Anna Perenna. People asked that Anna bestow as many more years to them as they could drink cups of wine at the party. The 2017 Ides of March may see many politicians drinking in hopes of having their political life extended.
****
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.