Trump’s Fight With The Fed Over Interest Rates Is A Scripted Farce

Thursday, July 18, 2019
By Paul Martin

Brandon Smith
Alt-Market.com
Wednesday, 17 July 2019

There is a very bizarre narrative being circulated in the mainstream economic media and it goes a little something like this:

“The Federal Reserve has capitulated on liquidity tightening yet the US economy is “stronger than ever”, isn’t that weird?”

There are a couple things wrong with this statement. First, the Fed has not yet capitulated on its tightening policy. In fact, we have been hearing since last November from the mainstream media and some alternative media that the Fed was going to lower its Fed Funds Rate and end monthly balance sheet cuts at “any moment”, yet several months later it still has not happened. Just last month the Fed cut another $38 billion in assets from its balance sheet; a move that was barely discussed in the mainstream because it does not fit with the prevailing delusion that the Fed has “already capitulated”. When the Fed cuts rates back significantly and the asset dumps stop, then and only then can anyone say with any authority that the Fed has ended its tightening cycle.

Secondly, the US economy is not “stronger than ever”, it is at its weakest since just before the credit crash of 2008.

And here is where the disconnect begins in Fed policy versus public expectations and the behavior of the Trump Administration. Almost EVERYONE, including the Federal Reserve, Donald Trump and the media are talking about how the US economy is “booming”. So why all the fuss over the Fed’s interest rates? The truth is it’s just more theater for the masses.

The battle between Trump and Fed Chairman Jerome Powell over Fed policy is a farce and always has been. Consider the facts – Trump ran his election campaign partly by taking a stance against central bank stimulus measures and ultra low rates. He explicitly attacked the notion that the US economy and stock markets were strong under Barack Obama, warning that the markets were in a bubble created by the Fed’s easing measures. Then, as soon as he entered the White House Trump flipped narratives and claimed the economy and the markets were strong, and that they were strong because of him.

Trump also said a little over a year ago that he wanted a strong US dollar, now he has reversed completely and says he wants a weaker dollar. In an indirect manner Trump has recently called for a monetary race to the bottom in competition with other nations. This display of bewildering policy gymnastics could be taken one of two ways – one, Trump is bipolar, or two, Trump is following the script that is given to him by the money elite day-to-day just like every president before him for at least the past hundred years. But what is the point of this absurd show?

As I have examined in depth in past articles, I believe the evidence shows that Trump is a pied piper for conservatives, and his attacks on the Fed are nothing more than world wrestling federation-style dramatics for the benefit of his base supporters. Does anyone else think it’s rather strange that a supposedly fiscally conservative president is fighting for monetary easing while the Federal Reserve (the KING of easy money for the past decade) is fighting for liquidity tightening? This only makes sense when you look at Trump’s background…

Trump’s companies have faced at least four separate bankruptcy threats since the 1990’s, yet he has been bailed out on more than one occasion by surprise investors. The most prominent of these investors was the Rothschild family through their agent Wilber Ross. Trump was saved from his vast debts tied to his Taj Mahal casino complex and three other major properties by the Rothschilds in the 1990’s, and some of these properties would go on to face bankruptcy again in 2009. The Taj Mahal would later sell for 4 cents on the dollar, yet Trump would always come out financially unscathed from these events.

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