Timothy Birdnow

Donald Trump's impatience with Federal Reserve Chairman Jerome Powell is boiling over, and there is talk that he may sack him after the Christmas/New Years break.

Since Trump, acting on the advice of Godlman Sachs Establishmenteer Steve Mnuchin, appointed him Powell has presided over four rate hikes since he assumed the position, and Powell's mentor Janet Yellin hiked rates three times in the previous year and a half (while failing to raise rates when Obama was President) making for a total of seven hikes. Powell has signaled he will probably raise rates another four times next year.

Which, of course, will mean the economy should hit a nice, nasty recession going into the general election season. How convenient Naturally, Powell and his buddies at the central Committee, er, bank claim this is to prevent inflation. But is it? CNN Money makes the following point:

" Powell said that central bankers have heard a "rising chorus" of concerns from businesses about the US-China trade war. But he said that the economic impact of US tariffs is "still relatively small."

He warned that tariffs could lead to higher consumer prices, but said policymakers don't see that in the numbers just yet."

End excerpt.

So Powell himself admits tariffs are doing the work of interest rates, and yet he is pushing rates up anyway. Wouldn't it have made more sense to hold rates stable while the impact of the tariffs were shaken out int he economy?

The CNN article continues:

" But for 2019, Fed officials expect growth to slow to 2.5% amid worries about the growing trade rift between the United States and China. The revised estimate is slightly higher than what policy makers expected last quarter, at 2.4%.

The FOMC also gave its first look of what it expects for the economy in 2021. Policy makers anticipate economic growth will shrink to 1.8% in that year.

Investors and former Fed Chairman Ben Bernanke have warned of an economic slowdown in 2020. "

End excerpt.

So, if the economy is going to slow down, why on God's Green Earth is Powell driving rates up?

There is only one answer; he wants to strangle the recovery and that for political purposes.

Look; you don't raise interest rates when the stock market is wobbling about like it has been. Either Powell is incompetent - something I do not believe - or he has an ulterior motive. As there is a full court press on President Trump, with desperate efforts to drive his poll numbers down so he could be impeached, one cannot help but suspect that Jerome Powell - a consummate insider - is laboring to sour the American People on the President.

Powell was appointed to the Fed by Barack Obama. While ostensibly Republican, Powell was born and raised in the District of Columbia and attended Princeton and then Georgetown Law. Wikipedia lists his net worth at 112 million dollars, making him not only not a man of the People but a rather fat fatcat. His father was a lawyer and his maternal grandfather a law school dean, so the man is a generational insider. He's moved back and forth between government service and private investment and law corporations. He is a member of the Establishment RINO Bipartisan Public Center, a "bipartisan" left of center think tank that promotes socialized medicine, "renewable" energy, and open borders.

Powell was managing partner in the Global Environment Fund, a company investing in wind and solar power. In 2011 he worked to raise the U.S. debt ceiling (which defeated the whole point of having one.) He's also on the board of directors for the left wing Nature Conservancy.

In short Jerome Powell is a typical Washington insider, left of center, and a man with his snout in the trough. Trump should never have appointed him, but he listened to Mnuchin, who himself is no different from Powell and should likewise never have been appointed by someone who claimed to want to "drain the swamp". Mnuchin and Powell ARE the swamp.

So Trump should not be surprised that Powell is trying to undermine him. When you lay down with dogs you get flees. Trump enraged the Swamp, and they are fighting back. Sadly, the President put them in positions of authority even while promising to eradicate them.

Washington D.C. needs to be carpet bombed with DDT.

Anyway, the President can remove board members if he so chooses, and that likely includes the Fed chairman. Of course, there will be a lawsuit and some Obama judge will issue a restraining order to prevent Powell's removal. And many investors warn that such a move could cause great consternation in the market since it would suggest the Federal Reserve could be brought to heel by political power. But so what? The Powell Fed is going to wreck the economy anyway; Trump may as well take the risk rather than allow the Swamp rats to win out.

Everyone should understand that we are in a situation where there is no middle ground, and the Establishment sees real threats to their power. There is nothing that matters more than the retention of power. As Orwell stated "the purpose of power is power". People like Jerome Powell will do anything to protect their own.

Posted by: Timothy Birdnow at 12:25 PM | No Comments | Add Comment
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