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Another Trump Disaster?

….As Trump’s Takes Control Of Federal Reserve…

Trump screwed up. Then he ordered the Federal Reserve to fix the problem. And they are obeying Trump. They will reduce interest rates to “juice” domestic consumer spending. This way Trump hopes he does not have to address the real problem facing the USA. Other countries are “boycotting” the USA.

Trump’s tariffs, coupled with his attacks on our trading partners, resulted in other countries shying away from USA products and services at an ever accelerating pace. Foreign tourism and investments in the USA has also declined sharply. And we likely lost this business forever. Our old trading partners are not going to blow off their new trading partners once the trade war ends.

So why hasn’t the USA economy declined? The answer is we, the USA consumer, are on a spending spree. That wouldn’t be a problem except many of us are running out of borrowing power, are behind on our monthly payments or have already defaulted on our loans. For example, 7 million people are 90 or more late on their auto loans.

Trump is hoping people follow his policy of “Borrow, borrow, spend and spend, then file bankruptcy in the end” at least until after the 2020 elections. And it appears Trump has the Federal Reserve on his side. They are pumping air into a bubble that is already about to burst rather than letting the air out slowly. And when this bubble bursts, the resulting recession will revel that of the Great Recession of 2008.

 

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