1. That is the point of this thread. A strong case can be made it is a Fed trick. I saw people on this board warning the FED could nullify Trump's goals policies even before he was sworn in. Now... AAA just presented the case that is is happening. Trump and the voter's goals are to help workers and tax payers standards of living. (By many measures workers have not scene their standard of living since the 70s.) I would like to know who the hell thinks the FED's mandate is to prevent tight labor conditions after 40 years of no rise in the standard of living of American workers? 2. For the Second point... re read AAA's post about the increasing dollar and China.
AAA is right in some areas and wron in others. He is right that the fed and the government are going in two different directions with trump having his foot on the accelerator and the fed on the brake. He is wrong about Obama’s presidency, it certainly was not a disaster. There was long term stable growth based on trade and investment. The deficit was cut in half and corporate profits hit record highs. Also the interest rates at that time was low to combat deflation. The problem is the republicans are a one trick pony. They think tax cuts and deregulation is a cure all, even when it’s harmful. I am telling you the fed is doing the right thing and stop worrying about the interest rates, they are relative. What you should be concerned about is unloading the balance sheet. The Fed is signaling there will be a slowdown soon with that.
1. I don't care to argue about Obama's policies. (right now) I will just say he did not fix anything when he had a great opportunity for reform. 2. Republicans are the flip side of the Democrat coin. In the past you could say Democrats were pro banker and strong dollar and republicans were pro exporter, pro oil and pro manufacturer. But now you can't they are both pro banker. If you think there is a real difference right now you are falling for the kabuki. They work for the same big money people. Silicon valley and wall street on one side. Vegas money and some oil money on the other. In the end the policies are all similar. Keep wages low... build up markets with govt spending and protection. 3. The Fed does the right thing for whom? Unloading the balance sheet is unnecessary. They created trillions of dollars out of thin air with a keystroke to buy those relative worthless assets. The inflation damage was done. The cleansing destruction from mal investment was avoided. The too big to fail future damage is done. They should let those assets expire on their books for now until we see a 40 catch up with our standard of living as a nation.
If you ramp spending, the economy will be fine and vice versa. The idea that Obama is to blame for a sluggish economy is absurd or Whitish.
I don’t know what the hell you are arguing. This idea that there is no difference between democrats and republicans is a sham. The Fed cannot keep an infinite balance sheet because it undermines the dollar. Unloading it before a slowdown comes is the right thing to do. The fed will have to expand the balance sheet then. If they do not unload while they can, look out below. I don’t know what you mean by a 40 catch up with our standard of living as a nation. Our standard of living is in decline as the wealthy and investor class take the lions share of the growth, healthcare is unaffordable, drug use and gun deaths are impacting life expectancy, and education expenses are crippling the younger generations.
The trillions to do this balance sheet expansion was created out of thin air. With no help from our government. The Fed creates money at will with a keystoke. They just place the money in their member banks accounts. Bernanke said so. There are videos on Youtube where he explains where the money to do this came from. I saw one here on ET. Remember our govt was arguing about an 800 billion dollar bailout. Here we see 3.5 trillion created with a keystroke we also know the fed gave out another 9 trillion to save banks and other businesses. (bloomberg had to sue them to get the info. see their law suit.) All money creation was done without any permission from Congress. Our Dollar is a Federal Reserve Note. Not a US dollar. The Federal Reserve system is owned by its shareholders. (member banks) They create money at will with no useful oversight of that function by our government. 1. Therefore... This is important... every one reading this should understand. Almost every thing you are taught about economics is premised on a few implicit conditions. One condition is that analysis is done as if the money supply is finite or known and that the government borrows money instead of just printing it. Simplified... our system is analyzed by almost all thinkers as if the monetary system is a closed system. But, that is not the case. The Fed creates trillions of dollars at will. They created the trillions of dollars they used to buy the assets on their balance sheet. Bernake said he did it with a key stroke. The video was poster here on thread with jem and piezoe. So the Fed does not need to raise money ever for the sake of the money. They do it for its market impacts. They certainly don't need to raise money be selling assets to purchase assets in the future. They create about 5 trillion (If I recall the amount) last time and they could create the trillions with a keystroke again. 2. When the assets are on the books they are innocuous. When the Fed buys assets or sells them they are manipulating the economic environment directly and indirectly.
Lol. You act like you’re breaking some news or something. at what age did you learn that money was fiat, 40?! What do you think any of this has to do with Trump tanking the economy?
Even now you still miss the point? Nobody is debating whether the Federal Reserve Note / Dollar is a fiat currency. There is no debate on that point. That was not the point nor is it the issue. 2. You wrote... "The Fed cannot keep an infinite balance sheet because it undermines the dollar. Unloading it before a slowdown comes is the right thing to do. The fed will have to expand the balance sheet then. If they do not unload while they can, look out below." As I told you... while on the balance sheet the assets are innocuous. Threatening to sell the assets or actually selling... impacts the market. I explained, since the Fed created the money to buy the assets in the first place there is no need to sell. If the Fed wishes to buy more in the future they just create more money. They have no need to sell assets to raise cash for a rainy day.