Posted on 04/12/2017 12:22:36 PM PDT by GIdget2004
Link only
(Excerpt) Read more at wsj.com ...
Sorry for the typos in the headline.
How does he propose to weaken the dollar and keep interest rates low without shafting consumers and raising inflation?
My guess this was Trump’s give to China in return for help with North Korea.
Art of the deal.
Heard there was a huge deal between China and Russia...and they will use gold instead of other currency. What does that do?
why would we want interest rates low? That is a trap, Europe is already flirting with negative interest rates.
It also disincentivizes savings.
For later
Rising interest rates are at least partially responsible for the strength of the dollar. A strong dollar penalizes US exporters and rewards importers to the US. Rising interest rates penalize people who carry debt, but reward consumers who save their money and pay cash. Rising interest rates help tamp down inflation, lower interest rates encourage it.
So, your question is nonsensical. Are you familiar with economics at all?
Because if rates rise even 1% we would be hard pressed to make interest payments on the national debt.
At that point we are looking at further massive monetization (printing money) or partial default.
Printing money is akin to all your teeth slowly rotting out vs. partial default is getting the front teeth kicked out in a bar fight. Choices choices.
Nonsense. The dollar gained in value in 2014 and 2015 when interest rates had been at their lowest rates for several years. It rose for several years before that and for several years after that. When Trump had been complaining about the strength of the dollar interest rates were still at their bottom.
A strong dollar penalizes US exporters and rewards importers to the US.
Which means that weakening the dollar will penalize importers as well as consumers, would it not? The average person will pay a higher price for imported goods. So it's like cutting their income.
Rising interest rates penalize people who carry debt, but reward consumers who save their money and pay cash.
True as well, which is another way that the average consumer would be penalized.
Rising interest rates help tamp down inflation, lower interest rates encourage it.
Again true. But we still are faced with how to weaken the dollar. The quickest way to accomplish that is to increase money supply, also inflationary, and also a negative impact to the average consumer.
Are you familiar with economics at all?
I am, actually.
You seem to believe that keeping interest rates low while seeking to weaken the dollar are somehow at odds. They are not. Nonsensical on your part.
You seem to believe that keeping interest rates low somehow prevents inflation that "shafts" consumers. It does not. Nonsensical on your part.
How does Trump propose to prevent the wind from blowing, thereby increasing the supply of toilet paper? That makes about as much sense.
Of course what is really missed in these conversations that since Nixon de-linked from the gold standards, all currencies are just valued relative to one another, a subjective value.
Of course from the view of purchasing power, ALL currencies have absolutely declined in a major way since the 1970s.
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