Trump and the federal reserve

[lamboguy]

http://www.zerohedge.com/news/2017-01-30/trump-about-hammer-federal-reserve

Trump is ultra sharp and loves to shake things up, i believe this article

[TexasDolly]

http://www.zerohedge.com/news/2017-01-30/trump-about-hammer-federal-reserve

Trump is ultra sharp and loves to shake things up, i believe this article

Lambo, I read it and I don't understand it. Give us a little help here and describe what all that means.
Thank you,
TD

[lamboguy]

the way i read it is that Trump doesn't care if the US dollar is the reserve currency for the world. it looks like his master plan is depreciate the dollar so that he can pay the world back all that the United States owes and create less of a burden paying off all the interest payments that flow out of here every year. its interesting to say the least.

Trump has accused China of playing around with their currency, but the Chineese have been trying to bolster it. however money has constantly been leaving China for other things like company's, real estate and commodities throughout the world.

on the other hand it looks like the Euro is going to be toast soon and will not exist 5 years from now. people have to figure out how to maintain their assets so that they don't erode into thin air.

to be honest with you, i am not sure of anything i just said because unlike Bush and Obama, this guy is hard to figure. what i can tell you is that Trump has come up with some type of a master plan to run this place that not many have been able to figure out. i said this before, Trump is presiding over the worlds largest bankruptcy right in front of our eyes, and he has plenty of experience taking company's bankrupt in his life. he wound up smelling like a rose owning beautiful buildings and having his own boeing 757 to fly around in. there is no better man for this.

[Clocker]

the way i read it is that Trump doesn't care if the US dollar is the reserve currency for the world. it looks like his master plan is depreciate the dollar so that he can pay the world back all that the United States owes and create less of a burden paying off all the interest payments that flow out of here every year. its interesting to say the least.

Trump is presiding over the worlds largest bankruptcy right in front of our eyes, and he has plenty of experience taking company's bankrupt in his life. he wound up smelling like a rose owning beautiful buildings and having his own boeing 757 to fly around in. there is no better man for this.

Early in the primaries, Trump talked about "renegotiating" the national debt. When it was pointed out that the US doesn't have the same bargaining power as a Trump property that can threaten bankruptcy if debtors refuse to renegotiate, Trump said that you can never default as long as you get to print the money.

As you say, he changes directions with the wind, but devaluation is one way of dealing with the debt that he has discussed in the past. And it would do great harm to the average American.


Trump has accused China of playing around with their currency, but the Chineese have been trying to bolster it. however money has constantly been leaving China for other things like company's, real estate and commodities throughout the world.

China has been trying to prop up its currency because investors have been pulling out. They have not been able to get good returns on their money as value of the currency was kept artificially low. Devaluing the dollar would have a similar impact on the US.

on the other hand it looks like the Euro is going to be toast soon and will not exist 5 years from now. people have to figure out how to maintain their assets so that they don't erode into thin air.

Americans will be faced with the same problem if Trump allows the dollar to be devalued. Savings will be wiped out and pensions hard to live on.

[TexasDolly]

Thanks Lambo. The Fed's actual motives have always troubled me and their continued effort to keep interest rates down is bad,in the long term, I would think. The low interest rates allowed the Gov. to finance all the social programs at a lower than realistic cost.
Entitlements have grown at a 9%/year clip while savings have declined at about the same rate for the last 50 years(both relative to GDP). Pure and simple, lower savings means less capital for investment.
I am still not clear about the IMF/SDR mumbo jumbo in the link.

[VigorsTheGrey]

"This is one of the main reasons why the media is in fact pushing this isolationist script. It prevents Americans from accurately deciphering the shift towards the multilateral. The opposition to the Federal Reserve and the establishment was built up through alternative media to the point where the masses are now clamoring for the changes which in fact were always required in order to make the multilateral transition."

Interesting side-note also on how Napoleon "conveniently escaped" from exile on the isle of Elba to wage war on Europe once again...

[chadk66]

I'd love for him to audit the fed.

[lamboguy]

I'd love for him to audit the fed.

either that or Ft. Knox and i have a touchdown

[barahona44]

[QUOTE=Clocker] Trump said that you can never default as long as you get to print the money.

While technically true, you end up debasing the currency.Is anybody lining up to lend Zimbabwe money?

[Clocker]

[QUOTE=Clocker] Trump said that you can never default as long as you get to print the money.

While technically true, you end up debasing the currency.Is anybody lining up to lend Zimbabwe money?

That is the ultimate issue in the whole discussion, including the OP here. While it is not at all clear if Trump would really want to devalue the dollar, it is clear from his past statements that he has thought about it as one method of easing the debt problem and of making the US more competitive in international trade.

Oops, I said "Trump" there, I meant to say Bannon. :p

[pondman]

[QUOTE=barahona44]

That is the ultimate issue in the whole discussion, including the OP here. While it is not at all clear if Trump would really want to devalue the dollar, it is clear from his past statements that he has thought about it as one method of easing the debt problem and of making the US more competitive in international trade.

Oops, I said "Trump" there, I meant to say Bannon. :p

That's what Reagan did-- ran the printing presses-- and devalued the dollar. Had a boom for about 8 year. It was a different economic time however.

Can anyone really predict anything?

[reckless]

[QUOTE=Clocker]

That's what Reagan did-- ran the printing presses-- and devalued the dollar. Had a boom for about 8 year. It was a different economic time however.

Can anyone really predict anything?

Reagan did nothing of the kind, especially about running the printing presses and devaluing the dollar.

Fed Chairman Paul Volcker tightened the money supply, causing interest rates to rise to over 20%. Why did he do that? To kill the rampant inflation and stagflation during the Carter years. Reagan/Volker made the dollar stronger, in fact.

During this early period in Reagan's first term, the death of inflation, tax cuts, and deregulation eventually led to the greatest economic boom of the 20th century, one that lasted through Bill Clinton's term.

Yes people could predict things -- but often incorrectly when those people are aligned with the mainstream press, 'establishment' enterprises in popular culture, business and finance... and most especially by national governments.

[lamboguy]

[QUOTE=pondman]

Reagan did nothing of the kind, especially about running the printing presses and devaluing the dollar.

Fed Chairman Paul Volcker tightened the money supply, causing interest rates to rise to over 20%. Why did he do that? To kill the rampant inflation and stagflation during the Carter years. Reagan/Volker made the dollar stronger, in fact.

During this early period in Reagan's first term, the death of inflation, tax cuts, and deregulation eventually led to the greatest economic boom of the 20th century, one that lasted through Bill Clinton's term.

Yes people could predict things -- but often incorrectly when those people are aligned with the mainstream press, 'establishment' enterprises in popular culture, business and finance... and most especially by national governments.he also had the very largest tax increase in the history of this country by eliminating personal deductions such as horse racing, credit cards and second homes while giving big tax cuts in the form of tax credits to banks and large corporation's throughout the land that invested in equipment and other manufactured goods. he was responsible for keeping Lee Iacocca in business with Chrysler K-cars with his tax credits. he also lowered tax rates. it was an amazing period of time for sure.

[lamboguy]

you could deduct horse racing bills against horse race earnings, but you couldn't deduct it against your paycheck or interest earning from the bank. before Reagan you could do those things.

[reckless]

[QUOTE=reckless]he also had the very largest tax increase in the history of this country by eliminating personal deductions such as horse racing, credit cards and second homes while giving big tax cuts in the form of tax credits to banks and large corporation's throughout the land that invested in equipment and other manufactured goods. he was responsible for keeping Lee Iacocca in business with Chrysler K-cars with his tax credits. he also lowered tax rates. it was an amazing period of time for sure.

True lambo... you are correct.

What I really, really, truly, truly, sincerely, sincerely, and most absolutely hate about most politicians, especially those phony RINO GOP politicians, is that they all feel that tax cuts need to be paid for, for chrissakes!

Village idiot Paul Ryan is allegedly holding up tax reform legislation under the guise of finding a way to 'pay' for the cuts Trump is calling for.

[lamboguy]

[QUOTE=lamboguy]

True lambo... you are correct.

What I really, really, truly, truly, sincerely, sincerely, and most absolutely hate about most politicians, especially those phony RINO GOP politicians, is that they all feel that tax cuts need to be paid for, for chrissakes!

Village idiot Paul Ryan is allegedly holding up tax reform legislation under the guise of finding a way to 'pay' for the cuts Trump is calling for.the thing about Reagan was that did make this country great again. when he took over the place was literally in the gutter and was very suspect to an attack.
and people had smiles on their faces, unlike the last 16 years where all you heard about were people complaining.
another thing about Reagan was that he took the state of Massachusetts both times he ran and i don't think he ever stepped foot in this place.

[TJDave]

[QUOTE=reckless]he also had the very largest tax increase in the history of this country by eliminating personal deductions such as horse racing, credit cards and second homes while giving big tax cuts in the form of tax credits to banks and large corporation's throughout the land that invested in equipment and other manufactured goods. he was responsible for keeping Lee Iacocca in business with Chrysler K-cars with his tax credits. he also lowered tax rates. it was an amazing period of time for sure.

I was in the oil/gas business in the early 80's. Reagan's tax reform cut the knees out from under my high bracket investors. Lost a multimillion dollar company and put two dozen people out of work. It took me almost 20 years to recover.

[lamboguy]

[QUOTE=lamboguy]

I was in the oil/gas business in the early 80's. Reagan's tax reform cut the knees out from under my high bracket investors. Lost a multimillion dollar company and put two dozen people out of work. It took me almost 20 years to recover.i know other people that were in the same boat. anytime there is a policy change there will be winners and losers.

fortunately for myself i was lucky. i had a chevrolet store that i took over from the landlord who couldn't afford the place anymore in 1978. i had a very small floor plan with new cars, but i loaded up the yard with plenty of used cars. i wound up selling about 200 used cars a month and maybe 10 brand new ones that i didn't make any money on. i had no idea how to run a Mr. Goodwrench service department and was in danger of loosing the franchise plenty of times to GM.
finally the FTC nailed me and i had no choice but to close the place down.

i went into the automobile leasing business with $2000 in cash and a credit card that had a $3000 line of credit. 3 months later because Reagan initiated the tax credits i was delivering over 100 lease cars a month, then i got an insurance company to work with me that charged $50 a month for fleet insurance and general electric credit corporation to buy my paper, and i started delivering over 600 cars a month, mostly mercedes and bmw's. i opened up 4 offices nationwide and wound up selling the whole deal 3 years later and moved to Nevada to bet horse races.

so i did well with Reagan, but understand what happened to you.

[barn32]

i said this before, Trump is presiding over the worlds largest bankruptcy right in front of our eyes, and he has plenty of experience taking company's bankrupt in his life. he wound up smelling like a rose owning beautiful buildings and having his own boeing 757 to fly around in. there is no better man for this.Is this a joke or what?

[JustRalph]

Is this a joke or what?

What part do you question? The bankruptcy or the man? It's an interesting way to look at it

[lamboguy]

Is this a joke or what?the government is nothing other than a business, their business is to make sure this country is defended and moving.

Trump inherited a country that is insolvent with close to $20 trillion in debt. in other words this place is a mess.

out of all the candidates that ran for president, 17 on the republican side and about 5 on the democrat's side, none of them have ever been bankrupt, Carly Fiorina ran a company and almost blew it up. Trump was the only one that had bankruptcies, 3 or 4 of them or more and came out of them with billions in his pockets. that can only prove that he knows more than anyone else about bankruptcies and should do a great job with this one, he's had plenty of practice.

we are very fortunate to have Trump as president, and for many reason's.

[Clocker]

Originally Posted by lamboguy
i said this before, Trump is presiding over the worlds largest bankruptcy right in front of our eyes, and he has plenty of experience taking company's bankrupt in his life. he wound up smelling like a rose owning beautiful buildings and having his own boeing 757 to fly around in. there is no better man for this.


I have never understood this "logic". Trump has shown that he is very experienced and capable at going bankrupt with other peoples money, but his fans proudly point out that he had never been personally bankrupt and that's a good thing? So because he is so good at going bankrupt with other peoples money without any personal consequences, he should be trusted with even more of other peoples money, which is to say the finances of our government?

There is no better man for bankrupting the US government because he will always personally come out smelling like a rose? :rolleyes:

[barn32]

...out of all the candidates that ran for president, 17 on the republican side and about 5 on the democrat's side, none of them have ever been bankrupt, Carly Fiorina ran a company and almost blew it up. Trump was the only one that had bankruptcies, 3 or 4 of them or more and came out of them with billions in his pockets. that can only prove that he knows more than anyone else about bankruptcies and should do a great job with this one, he's had plenty of practice.

This is so mind numbingly astounding...I don't know how to respond.

[lamboguy]

I have never understood this "logic". Trump has shown that he is very experienced and capable at going bankrupt with other peoples money, but his fans proudly point out that he had never been personally bankrupt and that's a good thing? So because he is so good at going bankrupt with other peoples money without any personal consequences, he should be trusted with even more of other peoples money, which is to say the finances of our government?

There is no better man for bankrupting the US government because he will always personally come out smelling like a rose? :rolleyes:the mess that this country is in was inherited by Trump, not created by him. the interest payments are going to crucify this country any day. when you go bankrupt often times you get a fresh start.

i watched casino's in Nevada go down the tubes, they all went bankrupt and they all got built up again. look at monster company's like Delta Airlines, United Airlines and American. all went bk, and all are strong as hell now.
a matter of fact, if you didn't go bankrupt you are at a competitive disadvantage vs. the ones that have. the debt on your back is like a rope about to strangle you.

[Clocker]

the mess that this country is in was inherited by Trump, not created by him. the interest payments are going to crucify this country any day. when you go bankrupt often times you get a fresh start.

i watched casino's in Nevada go down the tubes, they all went bankrupt and they all got built up again. look at monster company's like Delta Airlines, United Airlines and American. all went bk, and all are strong as hell now.
a matter of fact, if you didn't go bankrupt you are at a competitive disadvantage vs. the ones that have. the debt on your back is like a rope about to strangle you.

I don't know if Trump or his supporters realize this, but a country is not the same as a company. Those airlines could reorganize under bankruptcy because their creditors allowed it, knowing that they would get something out of it as opposed to nothing if the airline went out of business. A country can't do that, especially a country with a Constitution that says we have to pay all of our debts. Our creditors have no incentive to renegotiate the debt.

Another minor little difference is that a company reorganizing under bankruptcy virtually always initiates some big cost cutting reforms. Trump, on the other hand, plans major increases in spending.

Also, in any bankruptcy, a lot of the "little people", the basic employees that run the place, get hurt. I see no discussion about the impact of this kind of program on the average citizen. Not even an admission that there would be an adverse impact.

But Trump will come out smelling like a rose.

[classhandicapper]

I'm not sure anything Trump does will matter a great deal.

The US is heavily in debt, somewhat propped up by artificially low interest rates, and the demographics are worsening for trying to solve our debt issues. At the same time, because we spend so much on consumption, we have failed to invest in needed infrastructure, education, and other things that might have actually yielded a positive long term return.

I think Trump "get's it" and wants to fix it.

But there isn't a painless fix.

Trump is going to try all sorts of things to fix this decades long mess he inherited, but the market and politics are very likely to keep saying "No".

What he has to do is slow the growth of entitlement spending significantly, search for other inefficiencies in government to try to save more money (especially healthcare related), raise infrastructure spending, and renegotiate trade deals to reduce our trade deficits.

There will downsides to every one of those things that someone that hates him politically or that comes out on the short end of the stick or that believes in purely free trade will whine about, but that's what has to be done to fix this mess and get the ship moving back in the right direction.

[VigorsTheGrey]

2 Words: Hostile Takeover.....
1 Action: Liquidation of National Assets....
1 Outcome: National Bankruptcy

Primary Benefactors: International Banking Cartel

Chief Front Man: Donald Trump, President, USA.

Primary Dupes: American Citizenry.....

Personal Mantra:

"I am seeking a government where one can inexpensively acquire a fatherland.". Quote by Parvus

[lamboguy]

This is so mind numbingly astounding...I don't know how to respond.you don't have to say a thing. just reason things out in your own mind.

[davew]

The newest appointment to the Board of Governors of the Federal Reserve System does not like paper money. Would like 'currency cards' instead.

....reducing the status of paper currency would make it easier for the Fed to lower interest rates to less than zero.



https://www.coinworld.com/news/paper-money/2017/12/federal-reserve-appointee-wants-to-abolish-paper-money.html#

[elysiantraveller]

The newest appointment to the Board of Governors of the Federal Reserve System does not like paper money. Would like 'currency cards' instead.

....reducing the status of paper currency would make it easier for the Fed to lower interest rates to less than zero.



https://www.coinworld.com/news/paper-money/2017/12/federal-reserve-appointee-wants-to-abolish-paper-money.html#

Wrong move.

I just read through this post and there are a lot of sharp posts on it. Trump did flip flop on the debt during the campaign cycle but his one solution is a plausible one. There is already waaay too much paper out there and keeping rates low isn't the solution. I see at as there being to real solutions.

1) Begin buying debt and issuing longer paper to properly amoratize the debt over decades, plural, not continuing to issue 10 year paper.

2) Actively devalue the dollar which is something Trump hinted at.

Ideally a combination of both will occur to ease shock as longer paper comes out rates will naturally rise but likely slowly. Once the debt situation becomes more fixed you slowly increase inflation via the printing presses to inflate our way out as well.

It won't feel good but if our longer term debt obligations are fixed it can be done gradually. Main issue is getting a Treasury and Fed committed to a very long term plan.

[classhandicapper]

....reducing the status of paper currency would make it easier for the Fed to lower interest rates to less than zero.



https://www.coinworld.com/news/paper-money/2017/12/federal-reserve-appointee-wants-to-abolish-paper-money.html#

That's the master plan of the globalists/Keynesians/central bankers.

They know the global debt bubble they created has to be propped up with artificially low interest rates (negative real rates and negative nominal rates in some countries). They also know that in the next recession they will probably have to lower rates even more than is this cycle. The problem with strategy is that negative nominal rates create a problem. That's the point where it makes no sense to deposit money. You are better off holding cash. So they have to get rid of the cash and force you deposit.

They also know that they ALL have to lower rates and get rid of cash because if some countries do and others don't, there will be a flight to the currencies of those countries that don't. It will be a slow coordinated process.

This is why guys like me own some gold/silver and gold mines and others are investing in crypto-currencies. We all know the current monetary system is broken and should be replaced, but we also know the globalist/Keynesians/central bankers are totally bonkers, corrupt, incompetent, maniacal etc... and will do everything in their power to sustain it and keep their own wealth and power for as long as possible.

It's hard to know how and when this is all going to come to an end, but when it does, you probably want some of your savings outside traditional money.

[classhandicapper]

1) Begin buying debt and issuing longer paper to properly amoratize the debt over decades, plural, not continuing to issue 10 year paper.

2) Actively devalue the dollar which is something Trump hinted at.



This assumes foreign investors are dumb enough to extend their maturities and allow us to inflate their wealth away. One of the reasons we've shortened maturities is that foreign investors are not dumb.

[elysiantraveller]

This assumes foreign investors are dumb enough to extend their maturities and allow us to inflate their wealth away. One of the reasons we've shortened maturities is that foreign investors are not dumb.

Never said it would be cheap but US Debt is still the safest in the world.

[Saratoga_Mike]

Never said it would be cheap but US Debt is still the safest in the world.

There is ZERO evidence that foreign investors lack an appetite for long-dated US paper. That claim is clearly wrong (at this point in time).

Over the summer, Argentina issued a 100-year bond.

[Clocker]

There is ZERO evidence that foreign investors lack an appetite for long-dated US paper. That claim is clearly wrong (at this point in time).

As long as short-term rates are lower than long-term, it is in the political interests of the Treasury to issue short-term debt. That minimizes the immediate data on the cost of service on the debt.

[Tom]

What do they call that again.....oh, wait.
Kicking the can down the road.

Never mind.

[fast4522]

That's the master plan of the globalists/Keynesians/central bankers.

They know the global debt bubble they created has to be propped up with artificially low interest rates (negative real rates and negative nominal rates in some countries). They also know that in the next recession they will probably have to lower rates even more than is this cycle. The problem with strategy is that negative nominal rates create a problem. That's the point where it makes no sense to deposit money. You are better off holding cash. So they have to get rid of the cash and force you deposit.

They also know that they ALL have to lower rates and get rid of cash because if some countries do and others don't, there will be a flight to the currencies of those countries that don't. It will be a slow coordinated process.

This is why guys like me own some gold/silver and gold mines and others are investing in crypto-currencies. We all know the current monetary system is broken and should be replaced, but we also know the globalist/Keynesians/central bankers are totally bonkers, corrupt, incompetent, maniacal etc... and will do everything in their power to sustain it and keep their own wealth and power for as long as possible.

It's hard to know how and when this is all going to come to an end, but when it does, you probably want some of your savings outside traditional money.

That was a mouthful, what about a global financial collapse unlike all others where all of our paper holders get smoked. What will they settle on, or are you in the camp that they will not settle?

[Clocker]

What do they call that again.....oh, wait.
Kicking the can down the road.

Never mind.Exactly. It's like getting an adjustable rate mortgage and ignoring the reality of what happens when the rate goes up.

[classhandicapper]

That was a mouthful, what about a global financial collapse unlike all others where all of our paper holders get smoked. What will they settle on, or are you in the camp that they will not settle?

I'm not sure how or when it's going to end or what's going to replace it.

This predicament was easy to predict 20 years ago. We were already on this path. So you could easily have been correct intellectually for a lot of years and miss out on a lot of investment gains by being overly cautious.

The one thing I am certain of is that the Keynesian/globalist/central banker/Wall St elites have a lot of tricks up their sleeves and will do anything and everything they can to try to kick the can down the road. Maybe they can do it for another 20 years or more but maybe the next business cycle will create a crisis that causes enough people to realize the current system is broken to actually replace it with something that makes sense.

I'm going to be 59 in a month. I'm too young to not be worried and too old to start over. I am diversifying to try to protect all that I worked and sacrificed to accumulate for my old age.

[fast4522]

I'm not sure how or when it's going to end or what's going to replace it.

This predicament was easy to predict 20 years ago. We were already on this path. So you could easily have been correct intellectually for a lot of years and miss out on a lot of investment gains by being overly cautious.

The one thing I am certain of is that the Keynesian/globalist/central banker/Wall St elites have a lot of tricks up their sleeves and will do anything and everything they can to try to kick the can down the road. Maybe they can do it for another 20 years or more but maybe the next business cycle will create a crisis that causes enough people to realize the current system is broken to actually replace it with something that makes sense.

I'm going to be 59 in a month. I'm too young to not be worried and too old to start over. I am diversifying to try to protect all that I worked and sacrificed to accumulate for my old age.

Look at it like this, we have good bottom land and can feed people inside our country. Our economy is the most resilient compared to any other. And when that day comes and the whole world goes belly up with loans called we can say FYFT and offer twenty cents on the buck. The truth is the bankers have no balls and no leverage, NONE.