Posted on 04/20/2016 4:35:09 AM PDT by expat_panama
There've been good signs in that regard, namely his shift away from bashing low interest rates and the way he only gives lip service to his Fed-control rhetoric. Sure, his followers can say "abolish the Fed" but Trump knows that then he'd have to come up w/ some other way to either "coin money and regulate the value thereof" or abolish the U.S. Constitution.
That's what Trump said last year and has backed off from since. imho O doesn't even understand interest rates --much less have a preferece, he just wants to spend money and while higher rates would make it more difficult it sure wouldn't stop him. Trump talks balanced budgets, and when (not if) rates go back up the intrest payments will top a $T every year.
That'll be quite a balancing act he'll have to come up with...
What do you propose in its stead?
That question always seems to end the discussion some how...
Strictly speaking that's the job of Congress and the Treasury Department. The Fed's responsibilities are a bit broader than that and apply to the country's monetary policy as a whole as well as the banking industry.
Actually, it's just Congress. So Congress complies by creating the Fed. Before President Trump signs an "Abolish the Fed" law, he needs to see how Congress intends to comply w/ Article I Section 8 fifth paragraph so it doesn't get declared unconstitutional by Obama.
Lets follow the Constitution and give the power to coin money back to the U.S. Treasury and re-institute the Gold Standard (or some type of standard.)
...
Lurkina.n.Learnin:
I have a better idea: Abolish the Federal Reserve
What do you propose in its stead?
...
I haven’t met a senior yet who would trade a 15-20% decline in their property value for a 2-3% interest on their savings.
You could look at purchasing an insurance annuity with some of your savings, or even a reverse mortgage if you’re sure you won’t be moving. Both of these will provide a steady stream of income.
Moving out on the risk scale a bit, there are a number of reliable monthly dividend real estate investment trusts (REIT) and closed end funds (CEF) that can beat the rates on Treasury notes.
I just don’t think higher interest rates are gonna happen in the foreseeable future, there’s too much debt in the world for that to happen.
That's true but many object to the fact she clearly represents continued deflation:
She wasn't poor before ZIRP, she had moved into a new, smaller home, and had money for luxuries like eating our with her friends every week, going shopping for whatever she wanted, giving her grandchildren money for birthdays and Christmas. Now, we have to help her with gifts, even though she is reduced to giving them things like her jewelry and collectibles. She started off just fine in 2008, and now is poor, and getting poorer every day.
An easy money populist.
Cruz says he wants to consider that, my hope is that after he's done being considerate he forgets gold and gets serious.
Sure, we could peg the dollar to say, today's 1/1,249.53th of an oz. but we had both the gold standard and the fed for decades until everyone got sick of double digit inflation one year and double digit deflation the next. So much for gold's "stable prices" --but even w/ the goofy volatile price gold standard most dollars were still created in banks not the treasury. This is the way it's been for centuries, it's not just now and not just a 'Fed' thing.
Congress originally created the FR in order to have a lender of last resort to banks that had been following all the rules and could still fail anyway --the problem being that as JPMorgan told 'em the U.S. economy had gotten just too big and the free market place could no longer perform that function.
So our bottom line is: no Fed = no last lender = no dollars = Congress fails to meet its constitutional mandate.
Sounds like as w/ all us old people she’s made some good choices and some stupid ones —and her best choice seems to be to have raised a loving and supportive family ;)
Somehow I can’t see how her problem right now is interest rates and not taxes. I mean let’s say interest rates go up like they were in ‘07. That adds $1T/year to the federal budget alone in interest payments along w/ $trillions/year more in state/local budgets. Property taxes would soar far more than any CD payment.
Of all the problems we’ve had since ‘08, CD returns should be pretty low on our list.
The power to coin money was never taken away from the Treasury. As for the gold standard that would be a decision for Congress.
The Fed sets the target on the Fed Funds rate, the overnight loan rate between banks.
Long rates are normally set by the market, by the bond vigilantes.
“I have a better idea: Abolish the Federal Reserve.”
That won’t accomplish anything. Banks still need a lender of last resort.
Prior to 1913 the largest American money center banks tried to perform the same role during panics. You’d be transferring monetary policy back to the largest banks and they won’t want it.
thanks!!
" Trump then went to Fordham University, a Jesuit school in the Bronx, for two years, before transferring to the University of Pennsylvania and studied economics for two years, graduating in 1968 with a bachelors degree. He took undergraduate classes at Penns famed Wharton School of Business."
Yeah, how could he possibly know anything about economics with a degree from U Penn and classes at Wharton? /s
Can they every Drastically differ?
let’s say overnight is a quarter point. Could 1 year ever be 4 points or 10 years 6 points?
Hard to respond to such a simplistic illogical comment.
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