The Fed Can’t Stop What’s Coming

YOUGHAL, IRELAND – The show is Donald Trump. And it plays to sold-out audiences, 24/7.

Meanwhile, in the back of the crowd, the Deep State goes about its work – picking pockets.

The political world thus unchanged… we move back to the financial world.

King of Debt

But wait… here comes politics again, sticking its big nose in.

From CNBC:

Stocks fell on Thursday amid criticism of the Federal Reserve by President Donald Trump.

The Dow lost 134 points.

In a stinging and historically rare criticism, Donald Trump expressed frustration with the Federal Reserve and said the central bank could disrupt the economic recovery.

Fed officials, including Chairman Jerome Powell, have raised interest rates twice this year and have pointed to two more before the end of 2018.

Trump, in an interview with CNBC, said he does not approve, even though he said he “put a very good man in” at the Fed in Powell.

“I’m not thrilled…” said the man who once described himself as “the king of debt” and a “low interest” guy.

Donald Trump is the last person who wants to see interest rates go up. Not only does his personal business empire depend on low rates… so does his political empire.

Per The Wall Street Journal:

The Trump administration expects the annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.

Just Numbers

Well, well… Who saw that coming?

Larry Kudlow, Trump’s top economic advisor, said the tax cuts were going to light a fire under the U.S. economy. It would be a “supply-side” boost, he said.

This would decrease the size of deficits, he forecast. Don’t worry about the debt, he assured us.

But you can do the calculation yourself: Lower tax receipts (because of the tax cuts) + rising spending (budget increases) + more borrowing (to cover the larger deficit) + higher interest rate expenses (more debt at higher rates) = $1 trillion deficits.

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