Trump is actually pretty smart about some things

Twitter Economy
Apr 5 65 Comments

“I personally think the Fed should drop rates... You would see a rocket ship.” -Trump

He’s actually right. If the fed dropped interest rates the stock market would soar. It would be like free cheap money for all the corporations which would use it to reinvest in themselves, acquire other companies, attempt riskier bets, increase hiring and grow across the board which would led to further growth in the economy.

Now whether this is good for the economy in the long term or not (basically we are continuing to inflate the bubble) is up for debate. But it is definitely good for the short term and will help Trump’s re-election chances. Basically as long as the economy is doing good in 2020 Trump is going to win re-election by a landslide. One way to keep inflating the bubble and prop up the stock market is to lower rates, and he knows this.

I’m not a Trump supporter or anything, I’m just stating the facts.

Quote source:
https://www.bloomberg.com/news/articles/2019-04-05/trump-says-fed-should-cut-rates-and-stop-shrinking-balance-sheet

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 TOP 65 Comments
  • Qualcomm dynasty001
    The fed should remain separate from the Presidents office. I think the Fed raisong rates is good now considering the amount of jobs we have been adding , people have a paychrck to support their expenses.

    If they lower the rates, then the Fed wouldnt have anything else to rely back on in case of a recession
    Apr 5 6
    • Qualcomm dynasty001
      @google. Care to explain ? I am always of the opinion that The Fed Res. Should always be out of political influences. They were created in the first place to resolve the liquidity crisis and are now overseeing bank actions as well.
      Apr 5
    • Google kts58Df
      The Fed was created by a banking cartel. How can it be apolitical? It is ridiculous.
      Apr 5
    • New PLover
      I hear this book always get thrown around when people talk about the Federal Reserve.
      Apr 5
    • Bandwidth Pynchon
      People accuse the Bilderberg group of planning the economy but at least the fed openly admits to manipulating it. Whether or not it's just is a political topic probably not suited for debate here.
      Apr 5
    • eBay / IT
      manorama

      eBay IT

      BIO
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       manoramamore
      Someone read this book ?
      Apr 5
  • Google Mmkaay
    This is correct but very short sighted. The Fed needs a margin of safety to bring interest rates down when recession hits. What would the Fed do when recession hits and interest rates are very low? Nothing. It would be crippled.

    It is like you are saying that if we keep interest rates down then all recession possibilities would vanish. Not true.

    In addition, very low interest rates in relatively strong economy means more people borrowing more money and maybe too much spending. This needs to be under control as this itself can cause economic crash.

    Trump maybe gets the basic idea but is absolutely ignorant about the details. That’s why presidents consult scientists and economy professors and academics. Trump thinks he knows it all lol
    Apr 5 4
    • Amazon TRuc81
      Lowering interest rates will just continue the massive stock and housing bubble we currently see, as people can’t find anywhere else to invest their money
      Apr 5
    • Twitter Economy
      OP
      “It is like you are saying that if we keep interest rates down then all recession possibilities would vanish. Not true.”

      I never said that.

      You are the typical arrogant armchair-economist keyboard warrior Googler who thinks he knows everything.
      Apr 5
    • Oracle oracl32
      Nothing wrong with negative interest rates. The problem is what does the fed do when inflation is high and hits a recession. That’s where they are screwed...
      Apr 5
    • eBay / IT
      manorama

      eBay IT

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       manoramamore
      If interest rates are low, and recession hits , Can’t Fed make interest rate negative, which will force people to spend the money instead of keeping in bank ?
      Apr 5
  • Netflix / Design wkVk72
    Lol
    Apr 5 0
  • Apple Hansel2
    “free cheap money for all the corporations which would use it to reinvest in themselves, “

    I stopped right there, oh you sweet summer child. You probably also believe in trickle down economics and the tooth fairy.
    Apr 5 4
    • Twitter Economy
      OP
      I don’t think you know what cheap money is.
      Apr 5
    • Apple Hansel2
      And you got just that from my comment ? ...
      Have a nice weekend- I really have nothing more to add. At least I know you are the “shifting goalpost” kind of troll and not merely a naive one.
      Apr 5
    • Twitter Economy
      OP
      U didn’t even read my entire original post. U don’t even know how the federal funds rate works and what it does.
      Apr 5
    • Amazon bFuY88
      It seems like it's YOU who doesn't know.

      We know corporations DON'T use low interest rates to reinvest in themselves. By observation (always better than ideology) they hoarde money and don't reinvest. They all just start sitting on huge cash piles which is counter productive.

      If you want money reinvested in the economy instead cut taxes for the poorest 25% of families while raising them on the richest 25%.

      The rich hoarde money while the poor spend every single cent.
      Apr 5
  • New cmdcl84
    Try to read something other than Paul Krugman's columns from time to time.
    Apr 5 3
    • Lyft wXfl07
      Agreed, economists have these "masters of the universe" egos but many successful economists are failed physicists, mathematicians, electrical engineers, etc. Most economists have no understanding of the laws of nature like control theory and feedback control and think they can play god with nature .... redefine up and down, etc.
      Apr 5
    • Twitter Economy
      OP
      I don’t read any of his work
      Apr 5
    • Twitter Economy
      OP
      @lyft but you an internet keyboard warrior at lyft know all the answers?
      Apr 5
  • Microsoft pJcW86
    Is this based on your Ph.D studies in economics or are you just oversimplifying something that you don't really understand?
    Apr 5 2
    • Twitter Economy
      OP
      All PHD Econ grads are losers that couldn’t make it in CS. I mean seriously if you major in Econ as an undergrad where can you find a job? Facebook does not hire Econ majors, they are useless, Facebook wants cs majors. Therefore Econ majors need to continue with further education and do a PhD. But everyone knows Econ, communication and international relations are the easiest majors at any school. The dumbasses and people that don’t work hard major in these.

      Econ PhDs are idiots. Just look at the government, full of them.

      This is based on 1000+ hours of reading financial books, blogs, and podcasts for the past 15+ years.
      Apr 5
    • Microsoft / Other poi3
      OP is right you know. I've met PhD economists who are often too over specialized within a narrow area of economics. Their grasp on the entire system is often as good as a well read non-PhD.
      Apr 6
  • Google wFatDuck2
    Not sure what your point is? That he is smart enough to know that a short term strong economy is good for his election chances? Everyone knows that :|
    Apr 5 1
    • Twitter Economy
      OP
      I don’t think the libs know that
      Apr 5
  • Oracle 5’2 indian
    Next post from OP: “did you know Trump can read?”
    Apr 5 1
    • Google wFatDuck2
      Hahaha exactly , op is impressed that he was able to understand a simple fact (most likely told to him repeatedly by his staff).
      Apr 5
  • Intel PokerFace8
    The fed should raise rates higher. Back in 1950's you could get a 20oz fountain drink for like 20 cents. Nowadays soda is $1 to $2 lowest price when bought in singles. Also bread and other daily insubstitutables were super cheap. Raising rates will help us decrease inflation. There was once a time that making $100K was a phenomenal salary. Yeah, back in 1995 that was an excellent salary, even year 2000, but now? No way!

    Wouldn't reversed inflation be better?

    Disclaimer: I do not have an economics degree so I can't say if there are any negative effects of reverse inflation.
    Apr 5 7
    • New / Ops
      tooQ10

      New Ops

      PRE
      Rakuten USA
       tooQ10more
      The Japanese _government_ doesn't like deflation because they ran up huge debts over the decades and we're counting on repaying then in devalued yen. The very mild deflation of the 1990s to 2012 has been great for regular people, who have been able to purchase daily goods more easily than before. And housing has become so reasonable that you can live within walking distance of your job in Tokyo!
      Apr 6
    • Intel PokerFace8
      Excellent point. Paying back past debts with devalued yen or dollars makes huge sense.
      Apr 6
    • New / Ops
      tooQ10

      New Ops

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      Rakuten USA
       tooQ10more
      @PokerFace8 - this is why the elites have been continuously pushing the inflation-is-good propaganda. It encourages regular people to get into too much debt in hopes of paying it back cheaply. Unfortunately this system only pushes asset prices too high, so the public loses again.
      Apr 6
    • Oracle oracl32
      A little Inflation forces people to invest to avoid losing value. Otherwise people would just sit on their money in the bank.
      Apr 7
    • New / Ops
      tooQ10

      New Ops

      PRE
      Rakuten USA
       tooQ10more
      People always want a return on their money. The constant-inflation system forces people to take a risk just to maintain the value of past earnings, something that inherently discriminates against the working classes and in favor of the rich.
      Apr 7
  • Intel Act2016
    It would sore. But creat inflation. Only thing fed should do is to understand the issue with China. Trump can’t challenge them with higher rates here so keep them the same for now while he negotiates. Later raise rates
    Apr 5 2
    • Uber ipojesus
      sore->soar. And you’re right. The Fed’s goal is to control inflation.
      Apr 5
    • New / Ops
      tooQ10

      New Ops

      PRE
      Rakuten USA
       tooQ10more
      They pretend to want price stability but in fact they create constant inflation so that the government's debts are devalued at savers' expense.
      Apr 6
  • Google hwstr12
    Corporations are using liquidity to do buybacks. Not really job creation.
    Apr 5 1
    • Twitter Economy
      OP
      Then why does google headcount keep increasing every quarter? (Yes I know it’s not all because of cheap money. Mainly it’s because google has money in da bank to hire and grow)
      Apr 5
  • Cruise Automation / Eng upper222
    Yeah, doing things that look good in the short term and are terrible in the long term is the defining characteristic of Trump's policy goals. Dropping interest rates, erecting barriers to trade, tax cuts that mostly go to the rich, cutting food assistance to the poor, propping up the coal industry, etc etc etc. Everything he does ignores the long term, and it works because the average voter can't seem to think about the long term either. The worst part is that even if a dem gets elected in 2020, they'll get blamed for the fallout, just like Obama got blamed for W's economy, which he inherited.
    Apr 6 0
  • Dell / Eng
    .+

    Dell Eng

    PRE
    Dell EMC
     .+more
    A soaring stock market doesn't help middle America. 8% interest rate might actually get regular people a savings account that's worth a damn
    Apr 5 0
  • Lyft wXfl07
    We have been running the economy on artificial stimulus for so long, imho, we run out of good productive ideas for useful products and more stimulus just wastes more and more money on useless people like banksters and 1%ers. Think of weightlifters who shoot up with testosterone for too long. Their hair falls out, their bones get brittle, they get 'roid rage', they get acne, and die of an early heart attack. We are in the acne/roid-rage phase right now; our economic bones are already very brittle! That's what we've been doing since Ronsld Reagan!

    I'm not a Trump supporter or anything I'm just stating the facts.
    Apr 5 0
  • BlackRock wageslave
    OP: you should figure out what the Fed's mandate actually is
    Apr 5 3
    • Twitter Economy
      OP
      It’s called maintaining a fed funds rate to keep inflation at 2%. Duh.
      Apr 5
    • BlackRock wageslave
      Lol you don't even know what their mandate is
      Apr 5
    • Microsoft / Other poi3
      It has a target inflation mandate. If lack of unemployment causes inflation, then Fed will increase rates.
      Apr 6
  • Yahoo Genius
    Also don't forget INFLATION folks. It matters a lot and could hurt the middle class biggly. Fed needs to make sure inflation is well controlled.
    Apr 5 2
    • Twitter Economy
      OP
      For the record I watched the video 10x over. For an unbiased view, he actually said big league. The leftists just want to attack him on any fault possible, true or not.
      Apr 5
    • Yahoo Genius
      I am not a leftist and I am not disparaging anyone. I talk about the Fed importance in keeping the economy balanced. I don't know how you draw your conclusion about me. Too bad OP
      Apr 5
  • Western Digital TSaK55
    Ask AOC, she's got a degree in economics
    Apr 5 1
    • Amazon bFuY88
      It shows, she's generally been right
      Apr 5
  • HBO sea hbo
    Total crock of shit. Corporations have more money than they know what to do with. Most of the tax cut money went to stock buybacks ffs.
    Apr 5 1
    • Twitter Economy
      OP
      I don’t think you know how the economy works nor understand anything of what I said. I never talked about tax cuts ret ard.
      Apr 5
  • eBay / IT
    manorama

    eBay IT

    BIO
    Coder
     manoramamore
    @OP what is your view about having negative interest rate incase recession occurs ?
    Apr 5 0
  • Amazon bFuY88
    The result would be a bubble which would eventually lead to a nasty crash. Did we learn nothing from 2008?
    Apr 5 0

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