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To: A Cyrenian

Monetary policy is really complex, and the moment you start to understand it, you find out there are always exceptions to every basic rule.

In the simplest terms I know...

Trump wants low interest rates and a “weak” dollar.

Low interest rates encourage Americans to buy homes, buy cars, and use their credit cards. A weak dollar encourages foreign counties to buy our export products.

USA interest rates are currently near record lows. The Federal Reserve fears that low interest rates will create inflation.

Consequently, the Fed wants to raise rates. The Fed also wants a “strong” dollar. A strong dollar means products from foreign countries are less expensive for Americans.

This same monetary battle has been fought all over the world for centuries.

The “winners” are always temporary.


8 posted on 09/11/2019 12:17:22 AM PDT by zeestephen
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To: zeestephen
Great explanation.

Thank you for taking the time to help me understand things a little better.

9 posted on 09/11/2019 11:35:41 AM PDT by A Cyrenian (Send everyone back to their states and let the states pay for their congress electives.)
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