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Trump on Interest Rates

slo1
Posts: 4,330
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9/13/2016 3:26:13 AM
Posted: 2 months ago
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump

Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.
Greyparrot
Posts: 14,256
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9/13/2016 3:43:50 AM
Posted: 2 months ago
At 9/13/2016 3:26:13 AM, slo1 wrote:
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump


Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.

Better than waterboy obama, or is it you that carries his water? I can never tell.
Stymie13
Posts: 2,162
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9/13/2016 6:06:07 AM
Posted: 2 months ago
Keeping interest rates artificially low doesn't allow for the reduction in the money supply. It is not a good thing.
slo1
Posts: 4,330
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9/13/2016 11:32:04 AM
Posted: 2 months ago
At 9/13/2016 6:06:07 AM, Stymie13 wrote:
Keeping interest rates artificially low doesn't allow for the reduction in the money supply. It is not a good thing.

It is a good thing when you have a jobs problem and wage deflation is a constant threat. It is a problem when inflation takes off.

All the inflation bugs abandoned that line of reasoning years ago after inflation never materialized. A recovery can never be taken out of context of the bust proceeding a recovery and that Great Resession was a doozy.

Also it is not artificially low when the open market supports the purchase of government debt. When countries and institutions stop buying debt that is when we have serious problems.
slo1
Posts: 4,330
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9/13/2016 11:34:22 AM
Posted: 2 months ago
At 9/13/2016 3:43:50 AM, Greyparrot wrote:
At 9/13/2016 3:26:13 AM, slo1 wrote:
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump


Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.

Better than waterboy obama, or is it you that carries his water? I can never tell.

Oh...OK....yep..sure...good stuff.
Stymie13
Posts: 2,162
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9/13/2016 12:16:38 PM
Posted: 2 months ago
As the money supply increases demand goes down and bond yields fall. A stable money supply keeps inflation in check.
slo1
Posts: 4,330
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9/13/2016 12:54:57 PM
Posted: 2 months ago
At 9/13/2016 12:16:38 PM, Stymie13 wrote:
As the money supply increases demand goes down and bond yields fall. A stable money supply keeps inflation in check.

Huh? Money supply does not decrease demand. It increases it.

Yes, Treasury yields fall when the Fed buys Treasuries on the open market. That is simply a function of increased demand for US Treasuries when it issues new debt. It however does require that other countries and banks continue to buy US Treasuries or the overall aggrigate demand for Treasuries would fall thus cause increase in the interest rate.

When the Treasury sells it's assets on the open market institutions can buy them creating less demand at Treasury auctions thus increasing interest rates on the issued Treasuries.

This recovery disproves your statement, "A stable money supply keeps inflation in check"

In a general sense it may be accurate, however this recovery increased liquidity (money supply) in extreme amounts yet inflation has been stable for the past 7 years.

That is not to say that monetary policy can't cause inflation, rather that there are macro economic conditions that are greater and can influence the effectiveness of monetary policy.

Back to the OP, Trump trying to create a conspiracy around a process that has been used for 60 plus years to aid in recovery is pathetic.
Stymie13
Posts: 2,162
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9/13/2016 2:29:43 PM
Posted: 2 months ago
First I don't buy into a conspiracy. And when money supply increase outweighs production it definitively leads to inflation. We are arguing different technicalities and I don't arbitrarily dismiss many of your contentions but money supply does factor into inflation and artificially holding down interest rates, especially during QE 1-3 didn't help the overall economy, it increased bank reserves. As we've slowed down the last couple of years, if government reports, and continual revisions are even to be trusted anymore, the glut of false liquidity created by the Fed will lead to a very ugly correction.
lannan13
Posts: 23,050
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9/13/2016 3:32:26 PM
Posted: 2 months ago
At 9/13/2016 3:26:13 AM, slo1 wrote:
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump


Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.

LOL, he knows nothing about the Fed nor monetary policy. His ignorance makes me die of laughter. Not to mention that all interest rates increases are always super low.
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slo1
Posts: 4,330
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9/13/2016 4:53:28 PM
Posted: 2 months ago
At 9/13/2016 2:29:43 PM, Stymie13 wrote:
First I don't buy into a conspiracy. And when money supply increase outweighs production it definitively leads to inflation. We are arguing different technicalities and I don't arbitrarily dismiss many of your contentions but money supply does factor into inflation and artificially holding down interest rates, especially during QE 1-3 didn't help the overall economy, it increased bank reserves. As we've slowed down the last couple of years, if government reports, and continual revisions are even to be trusted anymore, the glut of false liquidity created by the Fed will lead to a very ugly correction.

It is not false liquidity. IE: a bank holding a Treasury can not count that asset in its reserve. A bank who sells a Treasury to the Fed gets credit in its reserve account, which is a reserve. That gives a level of liquidity they can create loans against.

Granted the Fed historically reduces money supply too late in the cycle, which can arguably make bigger boom and bust cycles. It is important to know that when the correction as you forecast hits, the Fed will increase liquidity via quantities easing and interest rates will go down.

The recent meeting in Jackson hole the Fed was presented with removing the zero interest rate floor so the concerns of entering a resession with low rates could be addressed.

This concept that Fed operations are innately evil and fake is a notion perpetuated by gold bugs and other conspiracy theorists. Is it fraught with risk, yes. Are there arguments for and against, absolutely. Is it a system that is fake and is guaranteed to collapse in time. Absolutely not.
Fly
Posts: 2,044
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9/13/2016 9:03:10 PM
Posted: 2 months ago
At 9/13/2016 3:26:13 AM, slo1 wrote:
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump


Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.

He already said awhile back that he intended to replace the Fed chair because Yellen is "yanno, a Democrat appointee." So, his fears seem a moot point.

Of course, this is just one subject among many where he changes his stance.
"You don't have a right to be a jerk."
--Religion Forum's hypocrite extraordinaire serving up lulz
twocupcakes
Posts: 2,748
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9/13/2016 10:28:16 PM
Posted: 2 months ago
At 9/13/2016 3:26:13 AM, slo1 wrote:
"Any increase at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy " raise interest rates " and watch what happens in the stock market."
Donald Trump


Donald Trump has bemoaned that the Great Recession recover has been anaemic, yet he proposes a conspiracy that the low interest rate environment is to screw the next President.

The conspiracy proposal is right up his supporters alley since the evil Establishment is messing with Trump, however, the obvious answer that the recovery has been very shallow and the continued threat of deflation over the past 7 years and in particular the global slow down that hit and is keeping pressure to keep rates low is more likely why rates remain low.

It is just another example of how his economic knowledge is subpar. Running a business he should understand the value of low rates and how it impacts investment and jobs.

His comment that low rates destroy savings is only applicable in inflationary periods. The low inflation of the last 7 years has not ruined savings. Lower wage inflation compared to overall inflation however has hit incomes.

He really is on the JV team when it comes to economics.

lol Donald Trump Typical...saying he is on the JV Team is generous.