We don't know, but we do know that monetary policy is going to change dramatically from the last eight years of unproductive experimentation because Trump has surrounded himself with industry leaders who ascribe to an entirely different philosophy than the one currently in practice. Check this out from monetary analyst Tommy Behnke:
"Some of today's most reasonable mainstream economic voices are included in (Trump's) inner circle. These names include David Malpass of Encima Global, who co-signed a letter with Jim Grant opposing the Fed's 'inflationary' and 'distortive' quantitative easing program; John Paulson of Paulson & Co., who made billions from shorting the housing market before the Great Recession; Andy Beal, a self-described 'libertarian kind of guy' who blames the Fed for the credit crisis; and the Heritage Foundation's Stephen Moore, who told CSIN in 2012 that he is a 'very severe critic' of the Fed's 'incredibly easy-money policies of the past decade.'
"While none of Trump's economic advisers are by any means Austrians, they are far more hawkish than most of Presidents Bush and Obama's past economic advisers." (Why President Trump Will Fumigate the Fed, Mises Institute)
Trump, who is no fan of the Fed's bond buying program called QE, has admitted he thinks stocks are in a bubble, suggesting that he will probably take a more conservative approach to monetary policy. Even so, that doesn't change the fact he's going to have to opportunity to personally select the FOMC's ruling majority, which means that he'll be in a position to demand their loyalty as a condition of their hiring. Does anyone seriously doubt that Trump would rather control the Fed himself than keep it in the clutches of the cutthroat Wall Street banks?
There's no doubt that the distributional effects of the Fed's policies helped catapult Trump into the White House. Millions of working class Americans who are sick of the monetary "trickle down" policies and the job-eviscerating trade agreements found a way to express their frustration in the candidacy of Donald Trump. Their collective rage suddenly exploded at the ballot box on November 8 pushing the real estate tycoon to a victory over opponent Clinton in what many are calling the political upset of the century.
Trump tapped into that wellspring of anger and frustration by denouncing the "failed and corrupt political establishment" in which both Hillary Clinton and the Fed feature prominently. Now he's going to take it to the next level by launching a surprise attack on the Fed which will leave Wall Street stripped of its power-agency and left to fend for itself. This is a blurb from the New York Times:
"'A core view of many Trump advisers is that the extended period of emergency policy settings has promoted a bubble in the stock market, depressed the incomes of savers, scared the public and encouraged capital misallocation,' said Ian Shepherdson, chief economist at Pantheon Macroeconomics. 'Right now, these are minority views on the F.O.M.C., but Trump appointees are likely to shift the needle.'" (With Trump in Power, the Fed Gets Ready for a Reckoning, New York Times)
They're going to "shift the needle" alright, then they're going to drive it through the serpent's heart. The Fed has had every opportunity to show where its loyalties lie and it has sided with Wall Street every single time. There's a reason why 95 percent of all income gains in the last eight years have gone to the one percent, while working people have struggled just to put food on the table. Just like there's a reason why stocks have tripled in value in the last eight years while wages and incomes have stagnated and the economy has slowed to a crawl. It's the policy, stupid.
The Fed has created the conditions for a permanent Depression so it can provide infinite cheap money to its crooked reprobate friends on Wall Street. Now their little party is coming to an end.
Boo f*cking hoo.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
2
1
1
