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Trump is Right to Blow Up the Fed

Scorpio

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#1
Trump is Right to Blow Up the Fed
The Federal Reserve is out of control, acting in ways and with powers that were never explicitly granted by Congress.

By Christopher WhalenApril 9, 2019



Herman Cain By Gage Skidmore/Creative Commons

Last week, President Donald Trump set the economics community aflame by suggesting that he will appoint businessman and presidential aspirant Herman Cain to the Federal Reserve Board. Even more than political economist Stephen Moore, the critics maintain, Cain represents a threat to the cabal that has controlled the central bank for decades.
Why? Because Cain is a successful executive who founded a real business, took risks, and created jobs, things most academic economists will never ever do.
Media outlets and other allied constituencies have howled with rage at the prospect of President Trump “packing the Fed,” a distant reference to attempts by President Franklin D. Roosevelt to pack the Supreme Court in the 1930s. Those worried about the independence of the Federal Reserve Board should reconsider. Independence from what exactly?
While the Fed is meant to be independent from the executive branch on a day-to-day basis, it is certainly not independent of Congress or the law. Yet the Fed in recent years has shown a troubling tendency to deviate from its legal mandate and make up new authorities to fit the changing economic situation. Case in point: the dubious notion that we should seek a 2 percent rate of inflation.
Anybody who cares to read the 1978 Humphrey Hawkins law will know that the Fed is directed by Congress to seek full employment and then zero inflation. Not 2 percent, but zero. Yet going back a decade and more, the Fed, led by luminaries such as Janet Yellen and Ben Bernanke, has advanced a policy of actively embracing inflation. And neither Bernanke nor Yellen bothered to consult Congress when they decided to discard their legal responsibilities.
Quantitative easing, to take another example, represents a vast inflation of the financial markets and housing, yet Fed officials actually appear in public and talk about the conundrum presented by “low inflation.” The inflation in home prices that occurred during and after the Fed’s purchase of trillions in securities has permanently raised the price of housing in many parts of the country, preventing millions from purchasing homes. Yellen confesses to be “perplexed” by the dearth of home purchases by young families, but she is the cause of the malady.
Not only are these pro-inflation policies in violation of the letter of the Humphrey Hawkins law, but they have contributed to increased volatility in the financial markets. The third and frequently forgotten mandate in the Humphrey Hawkins law commands the Fed to employ policies that will produce “stable interest rates.” But the economists have long since stopped talking about this.
The basic problem with the Fed today is that it has gradually fashioned a new set of rules for itself, particularly since 2008, on which Congress has never been consulted. In the same way that economists use their imaginations to concoct new theories about economic behavior, the Fed board has apparently decided to take up legislative powers as well. Is the Fed meant to be free of any real-world restraint on its actions?
As Alex Pollock of the R Street Institute writes in American Banker:
One may wonder whether Fed independence is a technical or a political question. It is political. The nature and behavior of money is always political, no matter how much technical effort at measuring and modeling economic factors there may be. For example, the Fed over the last decade systematically took money away from savers and gave it to leveraged speculators by enforcing negative real interest rates. Taking money from some people to give it to others is a political act. That is why the Fed, like every other part of the government, should exist in a network of checks and balances and accountability.​
The biggest problem facing the financial markets today is that the folks at the Fed have no appreciation for how their policies are affecting the real economy. Ten years of inflation, open market manipulation, and other experiments have left the U.S. burdened with trillions of dollars in new public and private debt. The December market break was a direct result of the fact that Fed officials do not really understand the real-world consequences of their actions.
Take another example: U.S. financial institutions are facing years of lower profits as funding costs for banks normalize thanks to Fed manipulation. Yet asset returns for banks and investors will remain suppressed by “extraordinary” monetary policy. Are these massive distortions in the financial markets authorized by Congress? No they are not. When investors in bank stocks have to watch the net interest income for the industry contract, one wonders what our friends on the Federal Reserve Board will say.
Moreover, the Fed’s decision to use excess reserves and repurchase agreements to manage short-term interest rates amounts to the nationalization of heretofore private markets. Is this authorized by Congress? No it is not. Instead the Fed is extending its government-sponsored monopoly over the short-term money markets with little regard for the rights of private investors and financial institutions.
We should be worried about Fed independence, but not because the central bank is somehow suffering under the tyranny of the executive branch. Rather the Federal Reserve is out of control, acting in ways and with powers that were never granted to it. Quantitative easing, “Operation Twist,” and the explicit 2 percent inflation target are just three example of how the Federal Reserve Board is operating outside of its legal authority.
It’s high time that President Trump put some new faces at the Fed and started asking questions about what policies it follows and why.
Christopher Whalen is an investment banker and chairman of Whalen Global Advisors LLC. He is the author of three books, including Ford Men: From Inspiration to Enterprise (2017) and Inflated: How Money and Debt Built the American Dream (2010). He edits The Institutional Risk Analyst, and appears regularly on such media outlets as CNBC, Bloomberg, Fox News, and Business News Network. Follow him on Twitter @rcwhalen.


https://www.theamericanconservative.com/articles/trump-is-right-to-blow-up-the-fed/
 

JayDubya

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#2
The Fed's "dual mandate" appears more like a triple headed mandate and states that the federal reserve is to promote sustainable growth and high levels of employment, along with stability of prices, in order to help preserve the purchasing power of the dollar and moderate long-term interest rates.

Seems to me that either one, deflation or inflation, in any sense, would inherently indicate stability of prices is being jeopardized.
 

TAEZZAR

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#3
Last week, President Donald Trump set the economics community aflame by suggesting that he will appoint businessman and presidential aspirant Herman Cain to the Federal Reserve Board. Even more than political economist Stephen Moore, the critics maintain, Cain represents a threat to the cabal that has controlled the central bank for decades.
Why? Because Cain is a successful executive who founded a real business, took risks, and created jobs, things most academic economists will never ever do.
Herman fucking Cain is a SHAM.

I posted the following , earlier this month. WTF is this all about ?
https://www.goldismoney2.com/threads/fed-doesnt-need-backward-looking-herman-cain.256036/


That article was a SHAM, it never, once, revealed that Herman Cain was Chairman of the Federal Reserve Bank of Kansas City.
I met Herman Cain when he was running for President. I asked him, point blank, in front of 200 people, "Mr. Cain, If you are elected President, will you audit the Fed." His reply was absolutely EVASIVE, He said "The people at the Fed are nice people & if you asked them to do an audit they would listen to you". What kind of bullshit is that ?
 

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#4
Trump is mad the Fed is raising rates, and if you are in a business where borrowing money is a constant ( Real Estate), this ain't good for you. This time the Fed wins...
 

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#5
The fed, as designed, NEVER lived up to any point of the sales pitch. I have an original booklet describing how the fed would work for Americans published by the government. It was hard to avoid burning it. Sham is Waaaaaayyy too polite of a word. White devils speak with forked tongues. Foul, filthy, fookin' lies from the lying white devils of government. Trump really should nuke the bastards. Tell the treasury to get to work NOW! Then maybe nuke the fookin fed bastards again just to make sure the devils are incinerated beyond the ability to ever return.
 

Alton

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#6
Trump is mad the Fed is raising rates, and if you are in a business where borrowing money is a constant ( Real Estate), this ain't good for you. This time the Fed wins...
Who farkin' cares?!? Fed debt will NEVER be paid. Can you DEFAULT?!? It ain't gonna hurt the country...ONLY the fed will take it up the backside...good and hard and permanantly. If poor Mr. Realestate has to fork over a few extra shekels to the moneychangers as he supports their debt scheme, well good! I hope he bears the weight of guilt well. And it won't be just Mr. Realestate. Why ALL kinds of people will be a borrowing' to feed the fed until the fed gets nuked. This could be the BIGGEST bankruptcy scheme in history!!! Yes sir! Take boatloads and buttloads of loans out now for absoolutely as many dollars as you can so when the fed gets nuked and the country and even the world defaults on central banks we can all laugh and dance and sing as the banksters get zero dollars and ALL they truly deserve! I wonder who will Bernanke's head to mount in his den or his "man cave"?

Yes, I REALLY do believe that our economic and financial freedom is far, FAR more important than Mr. Realestate.
 

TAEZZAR

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#7
Who farkin' cares?!? Fed debt will NEVER be paid. Can you DEFAULT?!? It ain't gonna hurt the country...ONLY the fed will take it up the backside...good and hard and permanantly. If poor Mr. Realestate has to fork over a few extra shekels to the moneychangers as he supports their debt scheme, well good! I hope he bears the weight of guilt well. And it won't be just Mr. Realestate. Why ALL kinds of people will be a borrowing' to feed the fed until the fed gets nuked. This could be the BIGGEST bankruptcy scheme in history!!! Yes sir! Take boatloads and buttloads of loans out now for absoolutely as many dollars as you can so when the fed gets nuked and the country and even the world defaults on central banks we can all laugh and dance and sing as the banksters get zero dollars and ALL they truly deserve! I wonder who will Bernanke's head to mount in his den or his "man cave"?

Yes, I REALLY do believe that our economic and financial freedom is far, FAR more important than Mr. Realestate.
Nice dream, Alton, I hope it comes true !
 

Fatrat

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#8
The Fed is here to milk the cows, and Trump is just another cow. I trust the Fed more than Trump.
 

Fatrat

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#9
Guess who the Banker is?...
1555117162388.png
 

Uncle

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#13
The Fed is here to milk the cows, and Trump is just another cow. I trust the Fed more than Trump.
Perhaps you might read 'The Creature from Jekyll Island'.

Current downloads are free, paid for by someone else.

Golden Regards
Uncle
 

TAEZZAR

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#14
Taezz,

BP pegged at 220/150

relax man, they are all party to a whole different game of monopoly,
Naw, 1 little Hyzaar 100-25 keeps me at 140/80 ! :gracious:
 

TAEZZAR

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Perhaps you might read 'The Creature from Jekyll Island'.

Current downloads are free, paid for by someone else.

Golden Regards
Uncle
YUP. G. Edward Griffin lays it out well !
 

TAEZZAR

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#16
putting cain aside,

the article has some points worth considering,
The only good FED is a dead FED ! Hmmmm, I like the ring of that !
 

Fatrat

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#17
The problem here is Trump thinks he should run the Fed, he has no intention of getting rid of it.
 

Irons

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#18
The problem here is Trump thinks he should run the Fed, he has no intention of getting rid of it.
What former president did President Trump say he greatly admired and even paid homage to on his 250'th birthday?
He has a portrait of that president in the oval office today.

Take your time, don't hurt yourself.
 

GOLDBRIX

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#19
What former president did President Trump say he greatly admired and even paid homage to on his 250'th birthday?
He has a portrait of that president in the oval office today.

Take your time, don't hurt yourself.
He also has a statue of him directly behind his chair in the Oval Office. You see it about everytime he takes a Q&A sitting at his desk.
 

Son of Gloin

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#20
What former president did President Trump say he greatly admired and even paid homage to on his 250'th birthday?
He has a portrait of that president in the oval office today.

Take your time, don't hurt yourself.
He also has a statue of him directly behind his chair in the Oval Office. You see it about everytime he takes a Q&A sitting at his desk.
We talking Andy here?
 

GOLDBRIX

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#21

Joe King

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#22
Anybody who cares to read the 1978 Humphrey Hawkins law will know that the Fed is directed by Congress to seek full employment and then zero inflation. Not 2 percent, but zero. Yet going back a decade and more, the Fed, led by luminaries such as Janet Yellen and Ben Bernanke, has advanced a policy of actively embracing inflation.
To do that would require that they deflate as much as they inflate. When have the ever deflated?


This pre-Fed cartoon attempting to sell the idea of an elastic currency demonstrates what is stated in your op article. A truly elastic currency that stretches when Uncle Sam needs to stoop to move the sheaf, implies that it also retracts to it's normal length after he moves them and stands back up. Ie: 0% inflation.

Or is poor ol' Uncle Sam never supposed to stand back up? He just keeps bending over, stretching those galluses all to shit.

1908_editorial_cartoon_promoting_elastic_currency.jpg
 

GOLDBRIX

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#24
there you go with the drugs again..............all you old guys and your drugs

:blond:
Just like the "heads" and heavy drinkers - whatever it takes to escape reality sometimes.
 

Fatrat

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#27
What former president did President Trump say he greatly admired and even paid homage to on his 250'th birthday?
He has a portrait of that president in the oval office today.

Take your time, don't hurt yourself.
Since he lies every damn day, I would say Trump admires Slave Owner Andy Jackson, if he admired Anti-Banker Andy Jackson, he would cut spending, balance the budget, and pay off the National Debt. You need to think about why he lies to better understand Trump. Reading is an important part of life...
 

GOLDBRIX

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#28
Since he lies every damn day, I would say Trump admires Slave Owner Andy Jackson, if he admired Anti-Banker Andy Jackson, he would cut spending, balance the budget, and pay off the National Debt. You need to think about why he lies to better understand Trump. Reading is an important part of life...
The last man without fault was scourged, hung on a cross, and had a spear shoved into his liver.

Evidently you must be the only man alive without fault so cast the stones pure one.
 

Fatrat

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#29
The last man without fault was scourged, hung on a cross, and had a spear shoved into his liver.

Evidently you must be the only man alive without fault so cast the stones pure one.
Sadly you are correct, while I am a better man than Trump, so are 90% of the people in this world...I just understand that Trump doesn't want to "End the Fed", he wants to run it for his own nefarious reasons.
 

GOLDBRIX

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#31
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
And those who have run it for 100s of years have ran it for their own nefarious reasons.
I prefer to "dance with the girl" that we brought to the Dance with than those European wall flowers hiding in the shadows.
 

Joe King

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#32
while I am a better man than Trump, so are 90% of the people in this world.
How can you know that? I mean truly know that? IMHO to know that, you'd have to know what is in everyones hearts now and when they did everything they did. How can you possibly know that?

I just responded to you in another thread where you were at a loss as to how a religiously observant person can support his nation. Well, a "religiously observant" person would also realize the meaning of judge not lest ye be judged, wouldn't they? Sounds a lot like you've already judged at least 90% of the population.
 

gliddenralston

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#33
Tramp trying to protect his own debt ridden ass on the back of savers...eos, wakeup!!!!
 

FunnyMoney

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#34
Can we get a real look at the gold this time?

Might be easier to recover what they've stolen if we don't blow it up first.