https://markets.businessinsider.com...final-warning-before-death-2019-12-1028756550 The legendary Federal Reserve Chairman Paul Volcker died on Sunday at 92, but he had a final warning for an American public that is losing trust in their government and one another. On Wednesday, the Financial Times published the afterword in Volcker's upcoming autobiography. The newspaper said it was written in September, three months before his death. In it, Volcker condemned President Donald Trump's efforts to pressure the Federal Reserve to lower interest rates to juice US economic growth, already undergoing its longest sustained expansion. He painted a very bleak portrait of the nation's political environment, saying "nihilistic forces" were forcefully rolling back protections considered emblematic of American democracy. The legendary Federal Reserve Chairman Paul Volcker died on Sunday at 92, but he had a final warning for an American public that is losing trust in their government and one another. On Wednesday, the Financial Times published the afterword in Volcker's upcoming autobiography. The newspaper said it was written in September, three months before his death. In it, Volcker condemned President Donald Trump's efforts to pressure the Federal Reserve to lower interest rates to juice US economic growth, already undergoing its longest sustained expansion. "Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks," the former Fed chairman wrote. Volcker said he trusted that the members of the Fed would fend off any attempts to interfere in its monetary-policy decision-making so that it may act "free of partisan political purposes." Trump has repeatedly assailed Jerome Powell, the current Fed chair, for not cutting rates. In August, Trump called Powell an "enemy" of the United States comparable to China, The Washington Post reported. The former Fed chair painted a very bleak portrait of the nation's political environment, saying "nihilistic forces" were forcefully rolling back protections considered emblematic of American democracy. "Increasingly, by design or not, there appears to be a movement to undermine Americans' faith in our government and its policies and institutions," Volcker wrote. "We've moved well beyond former president Ronald Reagan's credo that 'government is the problem,' with its aim of reversing decades of federal expansion." He went on: "Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself." Volcker was best known for waging a campaign to subdue inflation in the late 1970s and early 1980s as the Fed chairman. He later sought to keep regulations in place to oversee the financial industry and became an advocate of financial reform. He chaired President Barack Obama's Economic Recovery Advisory Board after the banking system teetered on the edge of collapse in 2008.
Trump has a point though when he says other countries are gaining an unfair advantage by having much lower to negative interest rates. Powell was too aggressive in raising. It was forced on him by the prior Fed who waited far too long to start a rise in rates. "Nihilistic forces are dismantling policies to protect our air, water, and climate" Yet China and Indonesia remain massive polluters (over 50% of the world total) and no one is going after them.
Leaders lead by example. Followers follow. Besides, if your neighbor pisses in his pool, does that mean you should piss in your own?
Not a "one-way street". Debasing your currency may have a temporary advantage for exports and tourism, but is ruinous in the long run. Trump is quite "greedy and near-sighted" to a fault on all of this. Lemme ask... would you rather YOUR money have more or less purchasing power?
Draghi and the ECB finally forced the Fed's hand - Trump had nothing to do with it. And Trump is hardly the first President to rail against the Fed's interest rate policies. Far from it.
Doesn't work that way, but makes a good soundbite. Rile up the people that don't understand the efect of interest rate on forward currency valuations. (I'm guessin that be 'bout everyone)
Actually, large disparities in interest rates between trading partners is very much a disadvantage. Again - Draghi started this war by going really negative in order severely lower the Euro versus the Dollar; and it's worked. So yeah, Draghi started a currency war by radically lowering rates. By design. And he told all the ECB banks as much.