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June 11, 2019 | Who Will Determine Fed Policy Going Forward? Trump or Powell?

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian:

Does Jay Powell bow to the Trump tweets and his mental pressure? Mr. Trump desires that our Fed inaugurate a new QE program (what I call official counterfeiting of our dollar) and then also lower interest rates by 1%. Mr. Trump continues with the mantra that our Fed must expand credit/debt and lower interest rates to keep our economy pumped-up. Will his mental pressure cause Jay Powell to act on his desires? Who will determine policy (going forward)?


My sense is that Mr. Trump will get his desires met soon (probably starting in July, 2019). Our real economy is slowing and the only tools left for our central planners is more of the same (low interest rates and official counterfeiting of the dollar – called QE). Personally, I expect that Jay will bow to the Trump mantra in the very near future (most likely in July).


Will this change in policy solve our issues with debt and a slowing economy? I don’t think so! You can discern the problem by looking here: Our problems will likely grow as the only game in town is more of the same. Keynesian economics (that which our leaders follow) is based upon expansion of debt to infinity. It’s the model which our politicians created back in 1933 and after.


Now that our money is a ‘digit’ in the computer screen it is easy for our central planners to continue the heroin of more QE (mental digits) until the system pukes all this debt up (which is coming). There is no viable solution to our debt problem and our deficit problems. The system is built upon debt, credit, borrowing, lending, and then more of the same. Again see the numbers here:


The Wall Street Journal (today) had a couple of interesting articles on our Fed and their dilemmas. The topic for discussion is what will the Fed do as our markets slow and demand wanes. Will Jay Powell adopt the policy issues based upon his mindset or will the desires of Mr. Trump prevail. We all know that the Donald wants more liquidity in the markets. He also wants much lower interest rates.


Mr. Trump needs this outcome to survive politically and to advance his Presidency come 2020. The economy is key to his re-election chances. But our markets may not give Mr. Trump the opportunity to glow come this fall. It is rather likely that our economy will be in recession by this fall. It’s the economy stupid (say those who oppose Mr. Trump).


Watch the actions of our Fed this June and especially in July. These two meetings could set the policy for some time. Money rules and politicians need a perception that the economy is sound to get re-elected. We live in interesting times. Who actually rules over the policies of our central planners? Are they really INDEPENDENT? Think for yourself. Have a good day.


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June 11th, 2019

Posted In: Kingdom Economics

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