Tag: Jerome Powell

Will Trump Take Down The Fed?

By Mark West | United States

Since October the stock markets have been on a ride of ridiculous levels of volatility enough to make those closing in on retirement squeamish. Volatility showcased its’ unpredictable nature as the Dow Jones Industrial plunged more than 600 points on Christmas Eve only to rebound with a more than 1000 point surge to close out the holiday week.

During this insanely cataclysmic trading week, President Donald Trump was cozy with his cell phone and his television as the tumultuous market events unfolded. You see, the government has been shut down since the Saturday before Christmas so President Trump has some extra time on his hands, especially during the holiday season, to enjoy his favorite activity…tweeting.

In the midst of President Trump’s Christmas Eve tweet storm, I found a jewel. He tweeted something that some people hope signals not necessarily a change in policy but a modification for how our economic and financial systems operate as a whole. I’m giving you advance warning, wading through our President’s Christmas Eve tweets can be a treacherous journey that isn’t beneficial for the timid at heart.

So, what did President Trump tweet that could be at least encouraging, at most inspirational, to certain segments of our political society?

Our President narrows all of our economic issues down to only one problem: The Fed. For those who aren’t sure what this Fed is that Trump is referencing, it is the Federal Reserve Bank, which is not a government bank, but rather a private bank that sets our federal monetary policy. It was invented out of thin air by Congress in 1913, although many of its concepts were already working in the economy in an unofficial capacity.

The Fed functions in a sort of private-public collaboration that is designed to prevent recessions and curb inflationary pressures that hurt the economy. Basically, the Fed can affect our economy and is practically unaccountable to Congress, or the President, for the decisions it makes. The Fed’s driving concept is that a politically independent Fed will lead to solutions that aren’t politically motivated and thus better for the nation in its entirety.

President Trump’s tweet threatens and undermines the state of independence the Fed has enjoyed since it’s inception. I think this, and President Trump’s Syria move, expose what may be a secret relationship which could generate a lot of excitement in the liberty movement. Taking on the Fed would be a move right out of Senator Ran Paul’s playbook, just like a less-interventionist foreign policy.

Maybe Senator Paul has been working behind the scenes to shift President Trump toward more libertarian solutions to the variety of issues our nation faces. Paul has been working on Trump about auditing the Fed since the bill began working through Congress in the Spring.

If President Trump’s tweet signals his desire to bring the Fed under Congressional oversight and accountability, then it is definitely a threat to the autonomy under which the bank has operated.

A turning point in how our elected leaders deal with the Fed could lead to more unstable and volatile markets in the days to come since those markets are naturally uncertainty-averse. However, the long-term benefits of restoring control of our monetary policies to a more accountable and constitutional process could secure our economic stability for generations to come.

Yet, we have to leave the possibility open that President Trump’s tweet was just a momentary ventilation of his frustration with Fed chair Jerome Powell’s rate hikes and their impact on the markets. If so, this means that nothing will change structurally in that relationship and that President Trump will rely on the bully pulpit he has as President that includes his Twitter account to influence the future monetary decisions of the Fed.


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Jerome Powell: The Name All Libertarians Should Remember

By Michael McCosker | United States

Jerome Powell sounds like he could be the head of your local home owners association or the banker that works off your main street. Jerome Powell, however, is not that person. Powell is a name that all Libertarians should remember at least until 2028. Jerome Powell is important to know because he is the current Chair of the Federal Reserve. With his Chair term ending in 2022, and his position on the Federal Reserve Board of Governors ending in 2028, the American people will feel the effects of Jerome Powell’s leadership for years to come.

Most Libertarians may have just lost interest once the Federal Reserve was mentioned, due to the fact that as a “central bank,” the Reserve is a monopoly and has control of the American financial system, and is enforced by government violence. However, it is important to understand the present head of the Federal Reserve, so that we may understand where investment opportunities lie.

Jerome Powell was both a lawyer and banker for 32 years, in which he managed several funds. Most recently, he managed the Global Environment Fund, a private investment firm that invests solely in sustainable energy. (1)( 2) Powell served for three years as the Under Secretary of the Treasury for Domestic Finance under George H. W. Bush, in which he was responsible for fishing out and purging corrupt and illegal business practices of the Salomon Brothers bank. (3)  One of his most notable achievements is that he was the first person supported by the opposition party since 1988, with President Barack Obama nominating Powell, a known Republican. (4)

In a 2013 speech, Powell made a speech in which he spoke about ending “too big to fail,” a policy in which the federal government promises to financially prop up businesses whose closure would be possibly catastrophic to the American economy. (5) Powell has also voiced his displeasure with Fannie Mae and Freddie Mac, publicly traded government agencies that specialize in selling debt by way of mortgages to the American people, saying that their current methods are “unsustainable.” (6) Despite the fiscally conservative stance that Powell often takes, he is in favor of most of the Consumer Protection Act, the Obama era response to the 2008-2009 economic collapse, although Powell believes to “do it more efficiently.” (6)

What does all this mean? Yes, most of this does seem like random irrelevant information, but it is important.

Powell is a Republican, but he is the worst kind and the biggest threat to Libertarian beliefs. Powell plays both sides of the aisle, and he truly believes that both sides have something to offer. Libertarians, while sharing some beliefs with either side, should acknowledge that both Republicans and Democrats both seek the same end, and that is the further enslavement of the American people by means of increased taxation, increased inflation, and an increase in the number of laws in effect. Powell, being the Chairman of the Federal Reserve has the ability to raise and is in favor of raising interest rates, as he did three times in 2017. (7)

While I am not an investment specialist of any kind, it is easy to understand that the continued devaluation of the American dollar makes investing into any sort of commodity or crypto-currency during this financial period appealing.