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How Trump Could Spell Trouble for the Fed


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Or "Why Trump Should Spell Trouble for the Fed"

 

Nov 15, 2016 7:00 AM EST

 

(Narayana Kocherlakota is a Bloomberg View columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.)

 

Research has documented that central banks around the world have been better able to control inflation if they enjoy independence from elected officials.

 

The US Fed system is a corrupt conjoining run by a private cartel that has whiplashed our economy several times w/ interest rates and inflation for their own benefit.

 

Now, they hold a tremendous amount of the QE debt that will provide themselves w/ big profits when they themselves raise the rates.

 

 

The election of Donald Trump seems like a good time to remind ourselves that, historically, the executive branch has presented the greatest threat to the independence of the U.S. Federal Reserve.

 

 

Damn right Skippy.

 

Who else is there to press you from your self-interest and do what is right (like stop funding the IMF w/ taxpayers money)?

 

Since its founding in 1913, the Fed has experienced two big failures of independence. The first occurred during World War II and its aftermath, when the central bank held long-term interest rates down to allow the government to borrow cheaply. Inflation soared to nearly 10 percent during the early days of the Korean War, until the arrangement ended with the so-called Fed-Treasury accord in 1951.

 

 

Oh, the horror of independently letting the Great Depression linger while sitting on your hands and getting the gov't to confiscate everyones gold, paving the way for a break from a gold standard that will allow for inflation ... that was very independent.

 

 

The second failure occurred in the latter half of the 1960s and the 1970s. Presidents Lyndon Johnson and Richard Nixon put (largely covert) pressure on Fed chairs William McChesney Martin and Arthur Burns to provide monetary stimulus to keep unemployment low and generate more popular support for their administrations. This led, in part, to the so-called Great Inflation of the 1960s and 1970s.

 

 

What will you bet that it didn't take much pressure to run up the money supply?

 

Keynsian economists always go there.

 

It's like "The more you spend ... the more you save."

 

 

Could something similar happen today? Well, suppose Trump appoints a new Fed chair and vice-chair in 2018, replacing incumbents Janet Yellen and Stan Fischer. If he also fills two currently empty positions, he will have appointed four out of the seven members on the central bank's Board of Governors.

 

Now imagine Trump decides that his new appointees should be loyal to him and his pro-growth agenda. He could put private (and possibly public) pressure on the Fed chair to ensure that monetary policy supported his administration’s plans, even if doing so led to high inflation. Presumably, he could also appoint a Fed chair sympathetic to his vision. (This would not be without precedent: Franklin Roosevelt and his Fed chair Marriner Eccles believed strongly in the need for congruence between the Fed’s monetary policy and the White House’s economic policy.)

 

There is absolutely nothing in U.S. law preventing Trump from violating the Fed's independence, a post-1979 development that rests largely on the restraint of the president. Will Trump show this restraint? We'll see.

 

 

Restraint?

 

Yeah, like that's what is really needed after the Fed got us into such a hole.

 

Nuke ... then pave.

 

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kj

 

 

 

 

 

 

 

 

 

 

 

 

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THE CREATURE FROM JEKYLL ISLAND

A Second Look at the Federal Reserve

Third edition

by G. Edward Griffin

 

The secret meeting on Jekyll Island in Georgia at
which the Federal Reserve was conceived; the
birth of a banking cartel to protect its members
from competition; the strategy of how to convince
Congress and the public that this cartel was an
agency of the United States government.

 

 

 

 

Yeah, right. LOL!

 

 

Liberal Ignorance is no excuse.

 

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FabianWindow_Large.jpg

 

 

 

 

 

kj

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The fed was created by the US government. It can be dismantled by the fed. gov. The nation needs to know it's fiscal condition. It has been propping up the markets by it's interest rate policy. It has been buying US bonds. There were leaks that it was going to buy stocks. It may cause another inflation. Time to find out.

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The fed was created by the US government. It can be dismantled by the fed. gov. The nation needs to know it's fiscal condition. It has been propping up the markets by it's interest rate policy. It has been buying US bonds. There were leaks that it was going to buy stocks. It may cause another inflation. Time to find out.

The FED was NOT created by the US govt. and it is not beholden to the US govt. The FED does not answer to the President or any other govt entity. You need to read the book by G. Edward Griffin, "The Creature from Jekyll Island". It will tell you exactly who created the FED and why. After you read the book you will understand why any President would be leery of trying to close down the FED.

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Does Trump know who he is messing with?

he might not, but those electing him as their mascot do, even if you don't either. Can you explain how self evident results exist in plain sight and why it is physically impossile to be done anywhere else but now universally applied simultaneously?

 

really is very, very simple and you choose to believe it cannot exist that way. Absolute power of choice being absolutely corrupted by intellectual minds denying what their personal brain navigates instinctively.

 

when your brains operates at 100% instinctively, how does it operate consciously? Inducted static charges stored in the brain, synapsing to trigger muscle extension and contraction for body function and motion in the needed direction to survive being self contained simultaneously when here now as now here.

 

currency is combined uses of symbolism over substance philosophy teamed with mind over matter psychology. Society gives symbolic rewards for compliance while taking substance as payment for renting a philosophy for generations cradle to grave and punishment for questioning the authority of hyperbole is physical removal from society by law and moral authority of everyone not wanting to understand more than they were educated to believe possible.

 

Ignoring self copntainment is a choice, ignorance is the decision to honor not wanting to understand how or why nothing stays the same and everyone in reality is waiting for change..

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The FED was NOT created by the US govt. and it is not beholden to the US govt. The FED does not answer to the President or any other govt entity. You need to read the book by G. Edward Griffin, "The Creature from Jekyll Island". It will tell you exactly who created the FED and why. After you read the book you will understand why any President would be leery of trying to close down the FED.

 

It's a private banking cartel w/ the contract to print the country's currency, be a player and set interest rates.

 

wolfinsheepsclothing2.jpg

 

 

Free book that should be understood before graduating high school.

 

 

 

 

THE CARTEL ADOPTS A NAME

 

Everyone knew that the solution to all these problems was a

cartel mechanism that had been devised and already put into

similar operation in Europe. As with all cartels, it had to be created

by legislation and sustained by the power of government under the

deception of protecting the consumer. The most important task

before them, therefore, can be stated as objective number five:

 

5. How to convince Congress that the scheme was a measure to

protect the public.

 

The task was a delicate one. The American people did not like

the concept of a cartel. The idea of business enterprises joining

together to fix prices and prevent competition was alien to the

free-enterprise system. It could never be sold to the voters. But, if

the word cartel was not used, if the venture could be described

 

 

 

THE JOURNEY TO JEKYLL ISLAND 17

 

with words which are emotionally neutral-perhaps even allur-

i n g — then half the battle would be won.

 

The first decision, therefore, was to follow the practice adopted

in Europe. Henceforth, the cartel would operate as a central bank.

And even that was to be but a generic expression. For purposes of

public relations and legislation, they would devise a name that

would avoid the word bank altogether and which would conjure

the image of the federal government itself. Furthermore, to create

the impression that there would be no concentration of power, they

would establish regional branches of the cartel and make that a

main selling point.

 

 

 

 

 

 

kj

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