Another Day, Another Shattered Rule; Interest Rates 101
The independence of the Federal Reserve is one of the key features of our economic system. To keep near term political pressure off of the Fed, the President NEVER publicly comments on monetary policy or meddles in decisions made by the agency. Well, never until yesterday. Yesterday, Trump (as usual) shattered another decades-long practice by publicly complaining to CNBC that he was “not happy” about the Fed raising interest rates, and that rising rates damaged “all the work” that he’s putting into the economy.
Jesus. After careful consideration and years of observation, I have determined that Trump is an idiot. His spouting off about interest rates on CNBC certainly demonstrates (for the thousandth time) that he has no understanding or respect for his responsibilities of the office he infests; worse, said spouting also demonstrates that he has no understanding about how interest rates actually work. So, I’ve decided to help; let’s talk to Trump about Interest Rates 101:
Dear Donnie…HEY! YOU!
First, sit down and shut up. Zip it and listen. You need to UNDERSTAND THIS. You’re bitching about interest rates, but you clearly have the knowledge of a chimpanzee about the subject. So, let’s talk interest rates; I’ll keep this simple so even you can understand it. Why is it important that we get this concept through that big hair weave? Because, dumbass, even as you complain about interest rates going up, YOU are making interest rates go up! Your idiotic and unneeded tax cut to billionaires accomplished two things: 1) You overheated the economy, fueling inflation, and the Fed is having to raise the Fed funds rate to slow down spending, and 2) You exploded the deficit, forcing the Fed to sell more debt. To sell more debt, INTEREST RATES HAVE TO GO UP TO GET INVESTORS TO BUY IT. When you blew a gigantic hole in the deficit with your tax cut, YOU caused the problem. Also, because of your idiotic and erratic leadership, demand for US bonds internationally is down, especially in China. Again, dropping demand forces higher interest rates to get investors to buy US debt. Simple.
A debt rate primer: US debt rates are determined by the demand for government bonds. US Government debt is how we finance deficit spending. You remember that, right, way back when deficits used to matter when the Black Guy was in the White House? Right? Anyway, I digress. When demand for bonds exceeds the supply of bonds, interest rates go down until demand is reduced. If demand for bonds is less than the supply of bonds, then interest rates go up until demand increases and the bonds sell. Interest rates are increasing now because we’re having to finance more debt. So, here’s what YOU can do, Donnie, (I know your orange head is going to explode) to lower interest rates, you should:
- RAISE TAXES. This will raise revenue and lower the need to issue more US debt. Interest rates will go down.
- STOP YOUR ASININE TRADE WAR. Confidence and stability in the US increases demand for US debt, and interest rates will go down.
- Stop commenting publicly on Fed monetary policy, labor numbers, and Hillary Clinton (Hillary comments have nothing to do with interest rates, but they do make you look like a moron.)
Now, go back up to the residence, but turn off Fox Noise and go play with your Legos.
Sincerely,
El Jefe, Interest Rates 101 Instructor
There is a place for anger, and THIS is it.
Would love to believe Trump would see this. Maybe his head really would explode!
1I had a colleague who got through college probably the way Donnie did. First, a pretty young woman in electrical engineering was probably something of an anomaly and she did a lot of cleavage and winking just in case the fellas didn’t notice. Somehow that blinded them to the fact that she had absolutely no clue. She plagiarized. And paid for papers. And copied team members’ homework. And cheated. I imagine it’s even easier to get that degree if you’ve got a whole lot of money to throw around as well. I wouldn’t trust this dame to wire an outlet. I wouldn’t trust Donnie to balance my checkbook.
2“The late Professor William T. Kelley, who taught marketing at Wharton for 31 years and had Trump in his classroom, said, “Donald Trump was the dumbest goddamn student I ever had,” in a conversation with his close friend Frank DiPrima, Daily Kos reports.”
https://politicaldig.com/former-wharton-professor-trump-was-the-dumbest-goddamn-student-i-ever-had/
Donnie, “always the best” especially at being dumbest. Would love to hear what the faculty at Donnie’s fancy little NY reform school had to say about the brat, after Fred and Mary gave up on the little monster. Senator Duckworth certainly nailed Donnie: Cadet Bone Spurs. Anyone more intelligent that the Stable Genius would have felt the burn.
3A most excellent rant and tutorial.
But ~60 million+ MAGAots don’t give a ratsass. Anything that RAT45 says or does is a message from their god. They will follow him and the rest of the Repukes off of cliffs, into volcanoes, tornadoes, financial disasters, it doesn’t matter; they lap it up and whimper for more as their brains rot and their synapses short out.
Wait until the MAGAotty Teabaggers have their SS and Medicare gutted and quartered, their 401k’s and IRA’s hollowed out. They ain’t seen “death panels” quite yet.
TX-23, send Will Hurd to the outhouse:
4https://ginaortizjones.com/
El Jefe you write as if Donny were trying to make the economy better. Thanks to Putin, Donny knows serious economic damage will also have a great effect in weakening a country. Stuffing the Fed with political hacks could speed up his efforts for Vlad.
5Sandridge, I wish they would follow him off a cliff. The rest of us would have a country with a much higher average IQ and good sense and could actually accomplish something.
6Oh that Nasty Edumacation stuff…..Banned for Penn Ave since 2016….. I heard the Clip of the interview on the radio and to me, the scariest part, and most telling “….I am not happy about it. But at the same time I’m letting them do what they feel is best.” he’s LETTING them……..for NOW…….Ooof..
7The WaPo just did a story on interviews with large numbers of YOUNG trumpets – that would be under 50. None of them mentioned things such as the Fed, the FBI, etc. Only one of them professed to being a college grad. A few would like to see someone other than Trump run on the Repub ticket in 2020. These are the lost souls of America. And, no, they do not want to be saved.
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