The real reason Trump wants the Fed to lower interest rates

> President Trump stands to save millions of dollars annually in interest on outstanding loans on his hotels and resorts if the Federal Reserve lowers rates as he has been demanding, according to public filings and financial experts.

> In the five years before he became president, Trump borrowed more than $360 million via four loans from Deutsche Bank for his hotels in Washington, D.C., and Chicago, as well his 643-room Doral golf resort in South Florida.

https://www.washingtonpost.com/politics/trumps-company-could-save-millions-if-interest-rates-fall-as-he-demands/2019/08/24/5e5df684-c5a9-11e9-b5e4-54aa56d5b7ce_story.html

This, of course, wouldn't be a conflict of interest had the president divested his personal businesses like every president is supposed to...

Tiggity®

Oculus Spirit [97676]

TigerPulse: 100%

Posts: 64819

Joined: 7/13/02

Yes, on two fronts. Helps keep wages down

Sep 11, 2019, 3:38 PM

and helps keep the price of goods cheap. Both are massive hedges against inflation in the face of massive debt issuance. It's how we've managed it for decades now.

Historically, 4%, 6%, 8%, 10%+ inflation is not unheard of, nor really that uncommon. It has been totally uncommon since the 1980's, about the same time illegal immigration jumped, our trade deficit skyrocketed, our national debt skyrocketed, and interest rates started a slow downward trajectory, all the while real average wages when adjusted for (whatever the inflation rate), have remained absolutely unchanged.

But when you get to low rates like we have today, whatever you're paying at 1% DOUBLES at 2%. Quadruples at 4%, and so on. If real wages climb 5-10%, we're toast. If rates rise to 6% or higher, we're toast. That isn't the case when you don't have $22 trillion in debt. But if a 1% rise in the fed lending rate equates to $110 billion MORE the government pays in interest, you better fear a scenario where that 2% jumps to 5%, 7%, etc. And with our budget now, how does the government pay its debt obligation if it increases 5-10 fold? More debt of course.

If you kicked out every illegal alien tomorrow, and slapped equal tariffs on every trading partner we have (free trade right?), we would have inflation. We'd have to make our happy meal toys here or pay more to have them imported. Everything we get cheaper with foreign labor now has to be made with limited domestic labor. WAGES CLIMB. Therefore, interest rates climb. We'd go broke in 2 years, tops. Probably faster than that.

We run on cheap debt, and we keep our debt cheap with illegal domestic labor and cheap imports to offset the inflation our debt spending would otherwise create. That and keeping it in places like the market, and OUT OF PEOPLE'S POCKETS. Another trick. Keep capital gains low to spur the flow of debt into markets for investment and out of pockets where it is spent in exchange for labor.

Point is we're not as rich or wealthy as we think we are now, and we weren't as poor in the past as we thought we were. It's all relative to your perception. Our trade numbers, wage numbers, manufacturing numbers, all in the 1970's would be considered the numbers of a booming economy today. Back then they were seen as bad because they caused inflation and made debt expensive. It's all based on how you look at it. But this game we've been playing for decades can't go on forever.

flag link

military_tech

thumb_down

thumb_up

The real reason Trump wants the Fed to lower interest rates

Re: The real reason Trump wants the Fed to lower interest rates

Wouldn't be an issue if lowering interest rates wasn't

Yes, the lower the rates, the more likely inflation rises.

Unless you offset that will illegal cheap domestic labor and

That has certainly helped?***

Yes, on two fronts. Helps keep wages down

As an American with zero debt

Re: The real reason Trump wants the Fed to lower interest rates

The interest payments on our national debt have gone up

TigerBoard POTD