Tuesday, November 3, 2015

Trump Accuses Fed of Keeping Rates Low to Help Obama

Donald Trump, speaking at a news conference, called Federal Reserve Chair Janet Yellen "highly political."

"Janet Yellen is highly politically and she's not raising rates for a very specific reason, because Obama told her not to, because he wants to be out playing golf from a year from now and he wants to be doing other things and he doesn't want to see a big bubble burst during his administration," Trump told reporters.

Trump held the news conference at his Trump Tower to discuss his latest book, Crippled America: How to Make America Great Again 

(ht Murray Sabrin)


  1. I can't agree with everything Trump stands for, but am in awe and admiration of Trump addressing issues and making statements that no other candidate will. I have often thought the same thing about the Fed not raising rates while Obama is in office and Trump has been the first (that I know of) to vocalize it. Continually pointing out the faults of George W Bush is, I feel, a must for whoever steps up to lead the party as well. Keep on, Trump.

    1. All the GOP candidates who are appealing to the know nothing base of the GOP speak this way.

    2. No - actually, other candidates don't speak this way. They might speak out against the Fed or criticize Obama, but no candidate has made the statement that Obama is purposely keeping interest rates low to prolong the inevitable crash until the next President takes office. I have felt this is Obama's plan all along. Run the country on fumes and then cut the gas. Leave the mess for the next guy. It's what they all do. At least Trumps is making it publicly known.

  2. Every time the Fed's competence, credibility, motives or intentions get questioned or maligned in such a public forum as a presidential election, it's a small victory for liberty. You go, Donald.

    1. This is a step backwards. Makes the anti-Fed crowd look stupid.

    2. I'm not looking to accept, compromise with or brook in any way the very great evil that the Fed represents. That you may be doesn't make you "smart."

    3. Definitely good for Fed criticism to go mainstream. I doubt either Cruz or Trump would seriously get rid of it, but Trump's comments on monetary policy sound mostly pretty good. It helps to be skeptical since candidates like Cruz know that Paulians care very much about this stuff while no one else does, so a throwaway line here and there to get a few extra votes while no one else pays attention makes sense politically. I could see Trump pushing the Fed to tighten things up a bit monetarily, but he's not going to abolish it.

  3. The single most crippling thing I can imagine done to the state(short of it being abolished), is doing away with the Fed.

    There's a ton of ways that can be done, whether executive order(I could see Trump doing that), establishing competing currencies by doing away with legal tender laws(or simply reinstating the full 10th amendment), or a host of other methods.

    But IF the day comes where that ever happens, it potentially remedies a LOT of misery. Not only would the empire have to scale back its overseas commitments/wars and its welfarisms, all of the market distortion and sustained economic misery generated by money supply fluctuations as policy would immediately be struck down.

    I can't help to wonder if it would be the single greatest blow to the state while also, more importantly being the one event that would help all of humanity the most under the current paradigm.(again, assuming we can't get rid of the state for now)

    Would Trump ever do it? Does he actually intend on doing something about the Federal Reserve or is he just pandering?

    Who knows, but at least he's talking about it, unlike everyone else but Cruz- who hasn't touched on the subject as much. (but it seems like Trump likes Cruz and they have dialogue behind the scenes)

    1. Keep the Fed, for logistical / practical reasons. Kill the FOMC. Why should there be a 12 person board deciding what the price of ANYTHING should be, let alone the most important price in the entire economy!

    2. The President does not have the power to abolish the Fed. The 10th Amendment does not limit the power of Congress to regulate the value of the currency. We have competing currencies.

    3. "The President does not have the power to abolish the Fed. "

      Sure he does. Executive orders only have to have basis in the Constitution and/or acts of Congress.

      It doesn't matter what you think the 10th amendment can allow Congress to do in terms of the "value of the currency"- It's simply enough to know that if the States were forced to adhere to "No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts" that the PEOPLE would determine the value of the currency.

      It would be based on things such as the silver/gold content of the coin, etc. et al.

      "We have competing currencies. "

      So let me add one thing to my "competing currency" comment. When I say "competing currency", I mean allowing free market competition- not an authoritarian market where for example, when gold/silver "compete" with the dollar, one must pay taxes on that as "profit".

      So until there's an environment where Federal Reserve notes are not granted a favored status, there's not a free market in currency.

      If it makes you happier, so there's no confusion, I will start to refer to such a thing as "free market currency", which we obviously don't have now. (unless you want to ignore the fact that people are penalized for using gold/silver, or potentially other currencies that appreciate against the dollar over time)

    4. Nick, you've conflated the 10th Amendment with Article 1, Section 10 (that's where your quote comes from), and that may be causing some confusion. Though many libertarians point to Section 10 as allowing for only gold and silver coin, that is not the case. Even in your quote it clearly says that "No STATE shall". It was a prohibition on the various U.S. states only (and specifically to prevent them from making their own paper money).

      That said, I would instead refer you to Article 1, Section 8 which grants Congress the power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."

      This is the extent of Congressional authority regarding money, and no where in there does it grant Congress the power to create a banking cartel with a monopoly on issue paper notes which would be used as legal tender.

      Libertarians would be on much firmer ground if they pointed to Article 1, Section 8 instead of Article 1, Section 10 (which doesn't apply).

      There is no constitutional authority for the Fed, though its advocates would probably point to the commerce clause (or just scoff and think it's beneath them to respond at all).

    5. "Nick, you've conflated the 10th Amendment with Article 1, Section 10 (that's where your quote comes from), and that may be causing some confusion. "

      You are correct- everyone please accept my apologies.

      It doesn't actually change my point however, if you simply substitute the correct reference to "Article 1, Section 10".

      If ALL the states have to follow Article 1, Section 10, there is de facto no monopoly money backed by "faith and credit", fiat, etc. circulating in most of the economy.- If the Fed wants to collect money in it's fiat currency, they can still do that, it will just be more obvious what its value would be.

      I understand your point about Section 8, but I disagree that it necessarily represents "firmer ground"- I think the firmer ground is the specific restriction to historically "traditional" money, but it's academic/strategic at this point, I can understand your viewpoint and I very much appreciate your note on my conflation.

      There is obviously an inherent tension in the Fed forcing States to use a currency in violation of Section 10 that has been ignored legally. I don't see Section 8 as addressing that, the "coin money" verbiage is vague and leaves it open- even if they coin it out of zinc. :)

      Thank you again for your correction.

      Best- Nick

  4. The Fed is not raising rates because the Fed raises rates to fight inflation and there is no inflation. Comparing the daily yield to the daily real yield on Treasuries tells you that inflation expectations are very low. The 5 year treasury yields 1.57%. The real yield is .34%. BTW, yes, I purchase food etc. No inflation.

    1. That's funny, I buy 40lbs meat packs from a local butcher in my area and in the past 2 years the price has went from 109 to 124...I'm sure there are many other food examples.