IS Trump Using Tariffs To "Strong Arm" The Fed Into Cutting Rates? The Nasty Meme (And Truth) Is Now Afoot

On Thursday Trump squealed in a deranged tweet:

"One would think I would be thrilled with our very strong dollar. I am not!  The Fed's high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers to compete."

Anyone who knows the extent of Trump's chronic derangement knows he'd be all too happy to pursue a sordid policy of dollar debasement to try to get a few market brownie points.  Also, they'd know what's making life more difficult for manufacturers - as well as farmers (and soon U.S. consumers) - are Trump's idiotic tariffs, which are really a tax on domestic interests.  But the malicious buffoon is savvy enough - in a twisted sense- to grasp he can use tariffs to pressure the Fed to lower rates.

It's a fair bet that few,  if any,  citizens are aware of the appalling degree to which American farmers are being put through the economic wringer for Trump.  The tariffs he's now increased on China - causing it to retaliate- will have devastating consequences on farmers as they are unable to sell hogs to the biggest pork consumers, or soybeans.

Less likely is that many would have seen what I read a few days ago in the Business & Finance section of The Wall Street Journal (p. B14,  Aug. 7) i.e.  that many economics experts and finance mavens now believe our nutso occupant of the Oval Office is using tariffs to "strongarm the Fed"  into cutting interest rates.

Look, we already know Tyrant Trump has been on Fed Chair Jerome Powell's case the past year to cut rates.  We know the swine has berated the Fed incessantly about lowering rates,  going so far as  to try to tilt the Federal Reserve Board with two unqualified lackeys: Herman Cain and Stephen Moore.  Fortunately, after much media heat centered on their woeful and clown -like backgrounds both backed out. 

But Donnie Dumpsterfire  never let up on his Fed attacks and search for leverage so pushed a new toady - Judy Shelton  (see photo above)- who, wait for it:   Yearns for the resurrection of the gold standard.   As a recent (July 3rd) Reuters report  described her:

"She has long advocated a return to the gold standard for the U.S. dollar, something most economists regard as a deflationary regime that would curb the Fed’s ability to respond to an economic downturn. She has also criticized the central bank’s post-crisis policies of zero interest rates and bond buying.

She has changed her tune in recent weeks, arguing that the Fed should be cutting rates to allow the administration’s tax cuts and deregulation to benefit the economy. That seems expedient, perhaps indicating that Shelton will in fact reflect the president’s views at the Fed."

Well, we all ought to worry if she succeeds in getting  a place on the Federal Reserve board, especially if this vapid virago still believes the gold standard is an answer. And also if she practices the financial philosophy of "political winds' directions", i.e. criticizing Fed near zero interest rates when Obama was president, but now ready to go against them with Dotard having seized the office with the Russkies' help and an archaic Electoral college. 

But the percipient will see her as yet another Trump pawn to try to push the Fed to fulfill his will, i.e. to lower interest rates to try to stimulate the economy when it doesn't need it. The increased tariffs (up to 10 % on all Chinese goods now)  are an even more potent force in this direction, because they tend to create weakened economic conditions for the U.S. which need addressing and for which few other options exist. The problem is that they are destroying the livelihood and  financial stability of the nation's ordinary (non-corporate) farmers. See e.g.

https://www.cnbc.com/2019/08/10/trump-is-ruining-our-markets-farmers-lose-a-huge-customer-to-trade-war----china.html


Key takeaways from the piece:

• U.S. farmers lost their fourth largest customer this week after China officially cancelled all purchases of U.S. agricultural products, a retaliatory move following President Donald Trump’s pledge to slap 10% tariffs on $300 billion of Chinese imports.
• China’s exit piles on to a devastating year for farmers, who’ve struggled through record flooding and droughts that destroyed crop yields, and trade war escalations that have lowered prices and profits this year.
• “It’s really, really getting bad out here,” Bob Kuylen, a farmer of 35 years in North Dakota, told CNBC.
• “There’s no incentive to keep farming, except that I’ve invested everything I have in farming, and it’s hard to walk away.”

Process that, and then the meme that Trump is using tariffs to strong arm the Fed.  They are not mutually exclusive. Indeed, in the WSJ Op-ed 'A Fed Reversal Will Store Up Trouble' (July 30, p. A17) we learned:

"The escalating U.S. - China trade war had led bond markets to price almost three rate cuts by the end of 2019 at one point, signaling the Federal Reserve will do whatever it takes to maintain GDP growth"

This after already observing (ibid.), the action has been spawned by "Trump's increasing criticism and calling for rate cuts and another round of quantitative easing."    Put the two together and what do you get?  Well,  that Trump is stoking the trade war with his escalating tariffs and will continue to do so to try to strong arm Powell's Fed into giving rate cuts.    But as the authors (Danny Yong and Nikhil Srinivasan)  also warn:

"By folding to these external pressures and cutting interest rates while U.S. equity markets are at all time highs and unemployment is at multi-decade lows the Fed is putting its credibility at stake."

Worse, the meme is out that a prime Trump Toady, Peter Navarro, in league with Trump, will trigger another recession with this madness. (cf.  WSJ, 'A Navarro Recession?',  Aug. 8, p. A14).  The Journal editors had a clear warning for Trump, writing:

"The irony, and a dangerous one, is that Mr. Trump doesn't seem to understand that his trade policy is contributing to exchange rate instability and a rising dollar."

Which is interesting given that Dotard - from his tweeting rant (see top quote)- accused the Fed and Powell of the rising dollar.  It's clear even the WSJ perceives he really is the dumbass we all suspected, certainly  in terms of  his inane  economic policies. The editors go on:

"When he slaps tariffs on China he reduces the demand for Chinese yuan. He also encourages capital flight to safe havens like the dollar, which encourages more capital into dollar instruments and the U.S."

In other words, Trump is acting the part of a mentally deficient kid playing with matches near a gas stove. The moron has no conception of cause and effect- i.e. between his tariffs and the flight to the dollar (raising the greenback's value).  As the editors conclude:

"If Mr. Trump can't strike  a broader trade deal with China before the election, he should at least call a trade truce to reduce the damage...Trump's willy-nilly trade offensive could be the mistake that turns a slow down into the Navarro recession'"

Let's also note that in an earlier editorial ('The Confusing Federal Reserve', July 30, p. A16) the WSJ editors were alarmed enough by the Fed's quixotic moves re: rate cuts that they noted: "This contributes to the suspicion in markets that the Fed is really trying to accommodate Mr. Trump's public demand for rate cuts."

In other words, Powell and the Fed have shown - and likely will further show  - even with rate cuts into negative interest territory they they are at the beck and call of the narcissistic autocrat in the White House.

This elicits the question: Does Powell even know that he and his compadres are being strong armed into rate cuts?   To quote the WSJ editors (ibid.):

"We'd like to think that's not true and it's dangerous for the Fed's credibility if it is.  But as long as the Fed bounces from tightening to easing based on inconsistent logic, the suspicion will persist."


See also:

China | Donald Trump | Trade

Trump’s Sudden Surrender in His Trade War with China Shows He Still Has No Idea What He’s Doing

Kudos To Justin Trudeau For His Smack Down Of Traitor Trump

This photo of the 71 year old brat facing an "intervention" by REAL world leaders, said all you needed to know about the G7 summit over the weekend. When I asked Janice  what Angela Merkel was likely saying she replied: "I'm going to bash your fat orange face in if you don't act your age!"

"To our allies: Americans stand with you even if our president doesn't."  - Sen. John McCain

"Why is Donald Trump acting like a snowflake on the international stage? Why is he acting like the ultimate snowflake when Justin Trudeau gives a blandly Canadian response? It was not that tough. He was being kind, eminently reasonable." Joe Scarborough this morning.

The ending of the G7 meet in Quebec was supposed to be a non-drama. Basically, all seven member nations had agreed to signing the final statement --  which was crafted by the U.S. delegation though with some disagreements noted.  Reporters on Air Force One had even been told that the United States would sign the joint statement. But then the unthinkable occurred, as Traitor Trump - our illegitimate resident - unleashed a broadside on Canadian Premier Justin Trudeau.  The orange- hued mutt didn't even have the courage to broach opposition (to a Trudeau speech) to his face, but  in a remarkable pair of acrimony-laced tweets after sneaking away on Air Force One.. But this is the coward twerp we've come to know:

A fucking disgrace and rank embarrassment  to the nation and a blight on the world.  A blight because this feral swine - by his puerile actions-   upended two days of global economic diplomacy late Saturday.    He did this by having  a hissy fit and refusing to sign a joint statement with America’s allies, threatening to escalate his trade war on the country’s neighbors and deriding Canada’s prime minister as “very dishonest and weak.”

Imagine that! This Do-TURD calling Justin Trudeau 'dishonest and weak' when already Trump had spieled off over 3, 300 lies by his 500th day as resident.  A zero who is so weak he has to recruit lackeys to do his firing for him (such as for Comey and Tillerson)  and hasn't the balls to criticize a man to his face but has to resort to tweet attacks on Trudeau on his plane. . Like a little tweety bird, all twitters, no substance...and no balls.  Rather like the "ultimate snowflake" to use Joe Scarborough's phrase.

But it didn't stop there. In addition, Trump sent off his little pet monkeys, including economic adviser Larry Kudlow and senior trade adviser Peter Navarro,  to spout even more disparaging adjectives on the Sunday talk show circuit. These included the following descriptors of Justin Trudeau: “amateurish,” “rogue,” “sophomoric” — while also accusing Trudeau of a “double-cross” and “betrayal.”

But the most incendiary remark was unleashed by the pretentious buffoon, Navarro:

“There’s a special place in hell for any foreign leader that engages in bad-faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door.”

Making one wonder what this imp would say if Trudeau had really stabbed Dotard in the back.  Somehow I think these two assholes-  Kudlow and Navarro -  have their perspectives inverted. They need to reverse the mirror because they are the dregs who betrayed the Canadian PM and the G6.  Why? Because literally moments after Mr. Trudeau’s government proudly released the joint statement, again drafted and approved by the UNITED STATES -  and agreed to by all seven countries -  Trump blew it apart with his deranged tweets.  As Ian Bremmer put it this morning on CBS, "this was the geopolitical equivalent of the Comey firing".  And he traced it to Trump's inability to control his emotional impulses in a critical setting.

Trump  also, by his classless fit, shattered the veneer of cordiality that had prevailed throughout the two days of meetings in a resort town on the banks of the St. Lawrence River.  That fit, perhaps triggered by the worry he would soon be meeting a superior opponent in Kim Jong Un in Singapore,  led him to tweet:

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” 

 

Of course, all of this is horse manure, given that when goods and services are factored into the trade equation, the U.S. is actually coming out slightly ahead of Canada.

 And WHO is Trump anyway, that he can't be challenged or confronted-  especially by a PM defending his own country from the ravages of a Hitler wannabe, e.g.


Hyperbole? Hell no!  Recall that Bill Eddy-   who wrote the definitive book on high conflict personalities -  observed that Trump is  “…potentially the most dangerous person in politics since Adolf  Hitler.”  Got that? The most dangerous politico since Adolf Hitler. Indeed, he's already shown himself to be a traitor to this Republic  and even former Director of National Intelligence,  James Clapper,  now concedes (in the latest TIME, June 11, p. 45), that Trump definitely got shoehorned into office by Russian hacking into U.S. election systems. As he put it:

"Of course the Russian efforts affected the outcome. Surprising themselves, they swung the election to a Trump win. To conclude otherwise stretches logic, common sense and credulity to the breaking point.  Less than eighty thousand votes in three key states swung the election, I have no doubt that more votes than that were influence by this massive effort by the Russians."

So despite Trump incessantly calling the Mueller probe a "witch hunt" and "a hoax" he knows damned well he had the assistance of an alien, hostile state to get into high office. In other words, he is a traitor:
One can then plausibly conjecture that a prime reason for Trump's rage against Trudeau is that he knows in his heart of hearts Trudeau is legit, legitimately elected, while he needed the help of Putin and Co. to grab enough electoral votes. (And as I noted in previous posts, had the electoral college done its due diligence as opposed to rubber stamping, Trump never would have been installed, e.g.

http://brane-space.blogspot.com/2016/12/why-hamilton-electors-would-be-right-to.html

In an alternate universe where law is respected, this bitch would have been hung already or put before a firing squad. He most certainly wouldn't be sowing discord and chaos, alienating our closest allies and slandering the Prime Minister of the host nation for the G7 meet..  All appalling actions, behavior more in synch with a mentally unbalanced 12 -year old than a U.S. president. But wait, he isn't a real president, only a pretender, a fake. A Traitor!

 In an interview with a San Diego journalist two years ago,  referencing the earlier quote, Bill Eddy was asked: "Clearly a terrifying opinion — yet we do remember the ardent hordes of Hitler’s followers. Can you elaborate?"

Eddy replied:

"There are similarities regarding how he connects with his followers, so that they become more passionately connected when he and they are criticized. It strengthens their bond. It’s a major part of my book. In a nutshell, it’s because he uses emotions instead of logic, and uses repetition on a greater scale than most politicians since Hitler. He has conditioned his followers to his simple arguments from day one. Hitler was known for spewing ten times as many words as any other politician, and he used modern media for voice (daily speeches  on the radio) and face (movies of him speaking at his huge rallies). These emotional media projecting face and voice are much more powerful on our brains than printed words."

It is noteworthy that in the interest of comity Justin Trudeau had sought to play down personal clashes with Trump as he wrapped up the summit, calling the meeting “very successful” and saying he was “inspired by the discussion.”.   Why wouldn't the PM who is the host of such a meeting want to at least put a positive accent on it at the end?  The same way (well, not quite) Dotard is trying to put a positive spin on the Singapore meeting with Kim, before even having met him.  A "summit" which from all indicators will be more like a glorified photo op.

Trudeau was also justified in pledging to retaliate against the United States tariffs on steel and aluminum products in defense of Canadian workers.  Again, this is eminently natural to do  for a nation's leader and only a spineless, worthless wuss and loser would punt.   He also said this to Trump's face, as well as on assorted Sunday shows last week, so it was never "behind" the orange baboon's back.  But see, Trudeau didn't realize fully he wasn't dealing with a mature adult male but a sick, narcissistic, egomaniacal coward who sees every robust defense of others' interests as a threat to his own.  Hence, the urge - like a 12 year old who needs a serious intervention - to 'punch back",   even when others are merely defending their own turf and principles. 

But like the alley cats  the 14 year old Trump used to stab with his specialty switchblades while growing up in Queens, he expects no one to fight back. Trudeau did and the bellyaching litte yellow belly couldn't take it.

 Trump, who apparently saw Trudeau’s news conference on television aboard Air Force One en route to Singapore, lost it at the sight of a fearless leader.  His only recourse then was to again emulate a petulant twelve year old, and project his own insecurities and defects onto Trudeau, e.g.

“PM Justin Trudeau of Canada acted so meek and mild during our @g7 meetings,only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around.’ Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”

Not long after that childish expulsion, John "Ripper" Bolton -  Trump's top national security stooge.....errr adviser  -   tweeted out a photo of Trump, with arms crossed and pouting, as the leaders of the other nations stood in a circle around him.  Evidently DOLT-on believed the image (seen at the top) would convey Trump in a defiant pose facing down the G7 allies trying to get him to rescind "America First".

In fact, all the photo did is confirm the truth most already knew: The U.S. is being led by a 71 year old, navel -gazing man baby who conducts government business like a dyspeptic toddler who shits his diapers every two minutes and expects quick changes.

Mr. Trudeau’s office responded to Dotard’s Twitter barrage with a carefully worded statement, making clear the U.S.'  maggot leader had lied again.   As Trudeau spokesman Cameron Ahmad put it:

 “The prime minister said nothing he hasn’t said before — both in public, and in private conversations with the President.”

Meanwhile, President Emmanuel Macron of France had left an indelible imprint of his thumb on Trump's right hand after a particularly vise-like hand shake. (Google "Trump bruised right hand from Macron" or some such, and you'l see it.) As Janice put it when the image flashed across the news last night: "Too damned bad Macron didn't break his hand!"  Ouch!

That  power hand shake (Macron got the jump on him) was followed by 48 hours of tense and often confrontational closed-door discussions between Trump and the leaders of America’s closest allies — France, Britain, Canada, Japan, Italy and Germany — in the hopes of resolving a brewing trade war among friends. Instead, the gathering   to further inflame Dotard's belief that the United States is being treated unfairly by countries with which prior presidents had long ago negotiated trade agreements for the flow of goods and services.

Exhibiting his full range of ignorance and stupidity, Trump railed about what he called “ridiculous and unacceptable” tariffs on American goods and vowed to end them.  Like the disruptive, ignorant  brat he is, he whined:

“It’s going to stop, or we’ll stop trading.with them. And that’s a very profitable answer, if we have to do it.”

Awww, Bwaahahahahahaaa!   Poor little baby Doturd. Give him a sippy cup, and another diaper change. Wouldn't want him going into that meeting with Kim Jong Un with a full load.

The other six leaders were defiant in the face of Trump’s threats, accented by Justin Trudeau's end comment:
 

“I have made it very clear to the president that it is not something we relish doing, but it is something that we absolutely will do. As Canadians, we are polite, we’re reasonable, but also we will not be pushed around.”

Goof for you, sir! And be ready to level the full 'boom' of the planned $12.8 billion tariffs on Trumpdom come July 1st.

Emmanuel Macron himself  said that trade debates ought never be conducted via angry emotional outbursts, Adding:

 “There is no winner, there are only losers when you take that strategy.”

Next time, sir, please do crush Trump's tiny hand. It would make wifey's day.

See also:

http://www.smirkingchimp.com/thread/p-m-carpenter/79588/america-first-more-like-america-dead-last