So the first one hundred days of Donald Trump have nearly passed and there seems to be a sense that, despite all his initial maverick positions, the country feels like it’s under a typical Republican President.
Russia is again the enemy number one; intervention in the Middle East is ongoing with the usual American “regime change” objective; and NATO, which was said to be obsolete a few weeks ago, is now an indispensable ally. At home, talk of the much more pleasant tax cuts has replaced the most extreme rhetoric of scrapping Obamacare and even corporate America and Wall Street — both implacable enemies during the campaign, now look set to be left alone.
So, normal service has been resumed. Or has it?
I don’t think so.
I believe that there is one massive populist battle coming up. It has not been picked up on, but it will be a struggle for the heart and soul of the US economy pitting the democratic White House against the technocratic Federal Reserve.
One enduring campaign objective remains and it is to “Make America Great Again”. This doesn’t mean firing rockets from ships into foreign countries, it means making the people who voted for Trump feel a bit richer by the time the next election comes around. The next election is the congressional election in September 2018 — which, in the world of politics, is not far off.
These congressional elections are really a referendum on the Presidency. They are one of the checks and balances of the US system. For Trump’s Republicans to win in sixteen months’ time, they have to make good on the election promise to make the average guy richer or at least feel richer.
People feel richer when (a) the economy grows and (b) the fruits of this growth are evenly spread. The problem in the US is the very force that drove Trump into the White House: the fruits of US growth are not spread evenly. The wealthy do so much better and the very wealthy do ridiculously well, while the average guy falls backwards. In the US, it is estimated that 50% of the population live paycheck to paycheck.
Trump told these people that he would make them more secure, more valued and a little bit richer.
But the only way he can do this quickly is to actually put money in their pockets. This means giving them jobs quickly, raising government spending very soon to expand programmes that employ people directly and giving tax cuts away right now. All these initiatives would increase the American government deficit immediately.
The alternative to all this would be for the Trump administration to follow the Obama administration and further cut interest rates. But rates are already low, and although cutting rates eventually causes incomes to rise because people borrow more over time, this all takes a long time. And Trump doesn’t have time. That’s the one thing he doesn’t have much of.
So how does a President engineer an electoral boom over the short term?
Well what he does is he tries to boost the economy immediately.
This is where the battle with the Federal Reserve comes in.
The Trump White House is on record as saying it thinks that the US economy can grow at between 3 and 4% per annum. If it was to grow that quickly, unemployment, which is now at 5%, would fall to close to 3% and the wages of those in work would rise too. This would make the average guy feel richer and would go some way to ensure that the Trump Presidency keeps its electoral promise to the average dude.
But the Federal Reserve believes that the US economy is already at full throttle at a rate of 2% and any further growth would simply lead to higher wages and prices. Traditionally, the Fed doesn’t tolerate rising inflation. So the thinking is that the Fed will raise interest rates (and it has already done so on one recent occasion) to choke off inflation and the higher interest rates would also choke off the White House’s desire to get the economy growing at 4%. This would extinguish Trump’s chances of getting re-elected.
Therefore, over the next few months, Trump will be thinking that the main obstacle to re-election is not the Democratic Party, but the Federal Reserve. The Fed becomes the enemy within. If he can bully the Fed into tolerating a higher growth rate, closer to his desired 4% rather than their stated 2%, he can deliver for his people.
Now here comes the politics of the situation.
Up to now the American economic community and the financial markets have assumed that the Fed will win this battle with the White House. The working assumption is that the White House always backed down in the face of the all-powerful Fed. But is this true of the Trump White House, populated by people like Steve Bannon, who see the world as a battle between the people and the elites?
There is no more explicit example of the technocratic elites than the Federal Reserve, populated as it is by academic, doctorate-holding, ivory tower economists. This is the ultimate expression of an unelected power base. On the other side of this battle you have the democratically elected Presidency, elected by the average guy to stand up for the average guy.
What happens if Trump bullies the Fed into accepting his higher growth rates which he achieves by boosting government spending and borrowing billions? Could it happen in the first place?
Yes it could. In the 1970s, Richard Nixon bullied the Fed into printing money so that he could win the 1972 election. It can happen because it has happened. This would mean that all the old rules go out the window. American wages would rise much quicker than they have in the past few decades. The average guy will feel richer and then he will be persuaded to vote for Trump again. Wall Street would wobble and the stock market fall, but the vast majority of people don’t own stocks, so they won’t care. And Trump will get his re-election and the only people who will squeal in the short term are rich bankers and investors on CNBC.
Sounds logical? That’s because it is. The Fed gets put in its technocratic place, the White House spins it as a victory for democracy over technocracy, and the Democratic Party is robbed of its electoral clothes.
From a Trumpian perspective, what’s not to love? That’s exactly why it’s likely.
What about our enemy within? Those damn whistleblowers.
At least the media did their part to black out coverage of Jonathan Sugarman’s appearance at the Finance Committee – pass on my thanks to the SBP & indo editors!
I believe national US election are in November not September.
To be honest, given the location of debt in the US system, and the pervasive lying that is at the heart of consumerism (you can afford it, even if you do not really need it, except to impress people who have not found out how inadequate you feel about yourself, when everybody else is buying equivalent junk), it has reached the point that this is the only option for the system. The danger is that the money will not end up resting in the account, to use the Irish political terminology. Household debt in the US is unsustainable. And the… Read more »
Yellen’s term ends in early 2018. And Trump has said she not necessarily “toast”.
[ unemployment, which is now at 5%, would fall to close to 3% and the wages of those in work would rise too. ] Not according to John Walter Williams. Official US unemployment statistics are highly misleading. The labour force participation rate is frightening. The US unemployment statistic is about as useful as the IRL GDP statistic, or the EU bank stress test results. In other words, it is designed to misrepresent, even before any measurements occur. One may as well be back in 1999, reading the prospectus of a Central Californian tech trailblazer which relies on non-GAAP earnings. In… Read more »
Wesolych Swiat Wielkanocnych! (Beannachtaí na Cásca oraibh!) Good, substantive article (similar to one of the previous articles that posited that with mega-high interest rates, FED sabotaged President Reagan in the early 80s, but that it might be different with President Trump). Here is a thing though David didn’t consider – FED’s dependence on other central banks in maintaining the value of the dollar as reserve currency (I’m not talking here about the petrodollar, because that is yet another thing). Here is what I mean by that: so far, FED would have stifled the threat from other currencies by convincing other… Read more »
Regarding tipping (when I mentioned Dunne – no Mr necessary in the front of that eejit’s name) – this the late-shift bartenders from Carlow I know that from. I am not sure if within 2-3 years of their work they would meet him then and again, they saw more than 10 euro from him in total, for all that time – for what was a continuous drinking of the likes of him until late hours of the morning. Btw, this statistics says is all: Oireland: “The average rate for a Bartender in Dublin, Dublin is €9.81 per hour. People in… Read more »
You state that the “vast majority of people” don’t own share but that is not true. Over half of Americans do. http://www.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx
Subscribe
This whole debate is based on the false premise that the statistics used are close to correct and are valid. Unemployment rates, cost of living calculations, income calculations and statements of growth in the economy are all manipulated for political purposes and practically speaking bear no relevance to the average citizen. Inflation rates are artificially subdued by the manipulation of facts and pricing. Employment rates are reduced by manipulation and calculation of the relevant statistics. In short all is a fabrication, a deceit, a lie, a fraud. Anyone using these statistics is adding to the fraud. The system is corrupted… Read more »
1) Trumps fails due to a worsening economy
2) Trump blames the political ‘insiders’/’system’
3) Trump does not seek re-election
Then the American people return to the usual back-to-business Democrats-Vs-Republicans vote-for-me carousel?????
I think not. Post-Trump is when the fun really begins.
Meanwhile on Trump’s foreign battlefronts ; Israel-Cyprus-Turkey pipeline would provide new strategic triangle, says former US Ambassador Bryza ALI ÜNAL @ali_unal ANKARA Published October 2, 2016 EXCERPT Israel-Cyprus-Turkey pipeline would provide new strategic triangle, says former US Ambassador Bryza The former Deputy Secretary of State and U.S. ambassador to Azerbaijan, Matthew Bryza, said the solution of Cyprus’s problem would provide the most economically attractive export route for Cypriot natural gas as well as for the Israel-Cyprus-Turkey pipeline, which also can elevate Turkey’s strategic importance and secure its economic benefits by becoming an energy transit hub The former Deputy Secretary of… Read more »
Big Pharma is as corrupted as big banking.
https://go2.thetruthaboutvaccines.com/docuseries/episode-1/?utm_campaign=ttav&utm_medium=email&utm_source=maropost&utm_content=2017-04-12-2350&utm_term=
@ professor Davidmcwilliams.
With all the official stats being put out Dathi did you ever even consider the possibility of fraud like in the non existence of WMD for example?
Or look at what 4 top professors of mechanical and civil engineering have concluded about 9/11;
The twin towers and building 7 all collapsed as the result of controlled demolition;
http://www.collective-evolution.com/2016/09/11/major-science-journal-publishes-paper-on-911-examining-the-evidence-concluding-it-was-a-controlled-demolition/
Michael.
Having read this article and all of your posts it’s hard to see who’s right and who’s wrong.
That is a worrying state of affairs.
It indicates a chaotic point is becoming more likely.
Ok tell us something new I hear you all say.
What is new is the sense (for me) or feeling that the day of reckoning is coming into focus rather than tomorrow always tomorrow.
Based on 2008 events then September could be a very bad month in the existence of humanity.
Have you ever been to Longford/
http://sluggerotoole.com/2012/05/30/have-you-ever-been-to-longford/
Meanwhile, amidst all the doom, gloom and moral compasses lost in the labyrinth of shattered hopes , this is, without a doubt, some good news that we can all (even Mr Kenny at at Cruinniú na Cásca – dancing like a butterfly, stinging like a bee) heave a sigh of relief at:
http://www.topix.com/tech/2017/04/large-asteroid-unlikely-to-destroy-earth-tomorrow
I mean: what, they are telling us only today?
Here are ur “inside interests” ; Instruction for opening the URLs below ; press “Left-Click” AND hover / highlight the URL > select Google.com search terms ; art students living inside twin towers AND 911 https://www.google.com/search?sclient=psy-ab&site=&source=hp&btnG=Search&q=art+students+living+inside+twin+towers+AND+911 Sample from results above HEADING The 14 Israeli ‘Art Students’ Were Inside The WTC Towers Camping With Construction Passes rense.com/general87/14_1.htm HEADING Israeli art students in WTC connected to September 11, 2001 youtube.com/watch?v=C4aHtWfeBI4 HEADING 9/11 World Trade Center Dancing Israeli Art Students 9 11 Gelatin The B Thing youtube.com/watch?v=TrNCdGUtcTU AND, HERE IS ARGUABLY THE LEADING INVESTIGATIVE AUTHORITY ON THE 911 “FACTUAL” CONSPIRACY ; Christopher Bollyn… Read more »
UK General Election. The Brits are completely remodelling their entire system, whilst our amatuers are fiddling around with non-adjustable tools, trying to sort of the ballcork, for the water supply. We STILL have NO BREXIT PLAN. We are STILL waiting for instructions from the morons in Brussels, and the hapless, disaster prone Merkel. The EU is a mechanism where we have outsourced responsibility for running our affairs to Brussels. The quango institutional state hsa grown as compliance is far more important now that flexibility. Another question in relation to Irish politics – how does Greater Manchester manage to run it’s… Read more »
The Institutional state is a slow motion train wreck. Disaster as an event that is approached one overextension at a time.
One moment of absolute certainty, disconnected from reality, follwos from another. And each is a statement of fashionable intent.
The road to bankruptcy is approached by numerous oversold pretensions.
But there is too little debate about this.
Here is an update on the US used car market
https://www.bloomberg.com/news/articles/2017-04-18/hertz-avis-bondholders-aren-t-gentle-on-rentals-as-debt-slides
This was one of the bubbles that I mentioned in a previous posting about one week ago.
Anyway, this is now coming fast, with the lights switched on.
EU President Donald Tusk arrived in Warsaw today as witness for prosecution. He was met at the Central Railway Station with céad míle fáilte from grateful Varsovians:
http://r-scale-51.dcs.redcdn.pl/scale/o2/tvn/web-content/m/p1/i/66be31e4c40d676991f2405aaecc6934/9e927d1b-9eb9-4a9f-86e0-389ef6a33d8f.jpeg?type=1&srcmode=4&srcx=0/1&srcy=0/1&srcw=970&srch=645&dstw=970&dsth=645&quality=80
As regards to the enemy within, the FED The item I am starting to focus on is the US debt ceiling debate. Will congress up the limit or cause a problem for the administration to run out of money to operate government. If the latter we could all live on government credit briefly but then what. There is some speculation that Trump wants to take out the FED. But how? Perhaps if there is a stand off “Trump will be forced in the National Interest”, to issue Treasury Notes to pay the running of government.((These notes will be produced from… Read more »
Make Ireland’s State Light Again. The state has turned into a parasitic racket, that promises many things, and always delivers short. There are functions that can only be delivered by the state. These are the natural monopolies. But there are a lot of functions that can be delivered by private individuals. And a lot of functions that are inefficient when delivered by the state. For example Dun Laoighaire Port. Either close it down and hand it over to the OPW for redesign as an amenity, or hand it to Dublin Port as a overflow mechanism. And there are a lot… Read more »
Food for thought as to why the economists of today cannot solve our economic problems. They are Mal-educated. The Fundamental Flaw of ‘Mainstream Economics’ Hugo Salinas Price Francis Bacon, an Englishman, was born in 1561 and died in 1626. Bacon’s thinking had a profound influence upon the development of Western civilization, because he founded what is known as the scientific method. All the scientific advances of mankind up to the present day, are based on this method, which is – in a few words – controlled experimentation upon things of the natural (physical) world in order to arrive at a… Read more »
On 19 April 1764 the British Parliament forbade the American colonies to print any more paper money. Odd as it sounds because they had been printing paper money since about 1690 with uniformly ruinous consequences, the colonies resented this prohibition. It became one of the grievances culminating in the American Revolution. It would take another 25 years ruinous experience, and the catastrophic collapse of the Continental currency, to convince the die-hard friends of paper money.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
A superficial description of modern central banking.
http://www.newworldencyclopedia.org/entry/Central_bank
I am warming to Mr. Gerald Celente ;
He is increasing being critically forthright finally.
Here is a thoroughly informative & enjoyable up-to-date summary by Mr. Jeff Rense & Gerald Celente of the very present situation in the main flash-points of the world ;
HEADING ;
Jeff Rense & Gerald Celente –
Chocolate Cake, Assholes, And ‘It’s Fun To Shoot People’
https://www.youtube.com/watch?v=JD-i8dNxFvs
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
[…] McWilliams writes: […]
[…] Full article here When Trump turns on the enemy within — the Fed […]
James Kunstler does not seem to see it as being about the interest rate but rather whether or not Congress will sanction a further rise in the debt ceiling.
http://kunstler.com/clusterfuck-nation/bad-week-getting-badder-bigly-fast/
Protectionism for the benefit of voters in Penn, and other states who backed Trump. http://www.zerohedge.com/news/2017-04-20/trump-signs-order-granting-steel-import-sanctions-national-security-grounds From Ireland’s perspective, we are uniquely vulnerable from our livestock backed agri-sector. Brexit plus Trump wanting to reward voters in the drier areas of the US Plains (who voted the most enthusiastically in favour of Trump) is a serious threat. Do we have a strategy for the number one business sector in provincial Ireland ? ACTUALLY, ANOTHER QUESTION – DO WE HAVE A SERIOUS STRATEGY FOR ANY BUSINESS SECTOR IN IRELAND THAT HAS TO DEAL WITH – BREXIT – EU CENTRALIZATION – TRUMP’s RENOGIATION OF… Read more »
Lost anything lately Tony?
You would wonder how many duped pensioners this happens to:
http://m.independent.ie/world-news/europe/britain/mystery-surrounds-rightful-owners-of-gold-coins-hoard-hidden-in-piano-35639252.html
[…] Source: When Trump turns on the enemy within — the Fed | David McWilliams […]
[…] Im Original: When Trump turns on the enemy within — the Fed […]
From the great Henry Makow HEADING ; Victor Rothschild was a “Soviet” Agent April 19, 2017 (Victor Rothschild, 1910-1980, the famous “Fifth Man” of the Cambridge Five Spy Ring) Reprise of key article: INTRO Here is proof that the Rothschild-controlledcentral banking cartel is behind Communism and world government tyranny. “Which is more plausible? One of the richest men in the world, Victor Rothschild espoused Communist ideals so that his own fabulous wealth and position could be taken away? Or that Communism was in fact a deception designed to take away our wealth and freedom in the name of “equality” and… Read more »
HEADING ; UK Election — Distraction from Britain’s Pedogate? April 20, 2017 PREFACE BY HENRY MAKOW ; Politicians are not our leaders. They represent the Rothschilds, who are Satanists. Thus when Theresa May has a majority and three more years in her mandate, we have to ask: What Is She Up To? Correspondent Richard Alderley has a provocative answer: “Brexit will never happen.” he says. “UK forces are already amalgamating with EUFOR [EU Army] and we are adopting all EU laws in to British law. Brexit is another State scam designed to mislead the public. It is cover for greater… Read more »
HEADING ;
THERESA MAY CALLS GENERAL ERECTION
Wednesday, 19 April 2017
INTRO OF INTRO ;
On 18 April 2017, Theresa May’s decision to hold a General Election boosted the Pound.
This could mean that Theresa May is going to go for a ‘soft Brexit’?
EXCERPT
According to the Financial Times on 18 April 2017:
“The reaction in the currency market suggests investors are betting that in the event of a May victory, the prime minister will have a firmer hand when it comes to negotiating a soft Brexit in the face of hardline Tory Eurosceptics.”
https://www.henrymakow.com/2017/04/UK-election-disrtaction.html
French Pres election, approaching the first round decision point. Four candidates all clustered to together, close to or above the 20% mark. And there are massive numbers who are “unconvinced by anything on offer”. All have serious disqualifying aspects. http://www.zerohedge.com/news/2017-04-21/analyst-who-predicted-trumps-rise-bets-le-pen-victory Ultimately, there is only ONE candidate who can – preserve the Euro in the medium term – avoid France becomming another Italy – sort out the youth unemployment problem – change the direction of the EU away from underperformance and centralization, towards economic activity and autonomy – prevent civil strife within France. Unfortunately, that candidate is proven to be corrupt.… Read more »
[…] Full article here When Trump turns on the enemy within — the Fed […]