Federal Reserve's Coming Rate Cut Makes No Sense

[KingsX]

There is some kind of weird psy-op between Trump and Powell [who Trump appointed as Federal Reserve Chairman.]

Trump has repeatedly attacked Powell, demanding he lower the federal funds rate. Trump wants Powell to lower the federal funds rate so the all time high stock market will rise even higher [at the same time it would hurt pension funds, seniors and others who can't put their money at risk.] Now it *appears* Powell has caved and the stock market is again at an all time high just on the *speculation* that Powell will not just lower rates... but will lower rates more than once this year [which is stupid and Powell knows it.]


Here is an interesting news article that explains this further:

Here's why the Fed's coming rate cut makes no sense

https://finance.yahoo.com/news/why-f...174010496.html

[Davy Crockett]

Below true market rates are the only thing keeping this economy going..

Cheap money is helping Wall Street more than Main Street.

[KingsX]

Maybe the baby-boomers have reduced their spending [I know I have.]

In a consumer-driven economy, TPTB need the masses to buy, buy, buy... even on credit and in spite of already sky-high personal debt.

Reducing interest rates will entice more people to buy, buy, buy on credit. It will also foster them buying already over-priced real estate and other commodities... creating bubbles to burst down the road [including the way overpriced stock market !]

[Davy Crockett]

Credit card rates haven't dropped.
They're still 15-30%.
These rate cuts will benefit Wall Street more than Main Street

[KingsX]

Powell lowering interest rates will also entice *greater fools* to chase higher yields and returns into the already historically high stock market. After all, the powerful wealthy elite who may realize a collapse is coming... needs *greater fools* to buy their over-priced stocks.

https://en.wikipedia.org/wiki/Greater_fool_theory

[Lenno]

The Illusion of the Keynesian Multiplier

Mises.org - July 15, 2019 -
Not only will easy money policy not lift production, it will impoverish us be inflating away real wealth

[KingsX]

Below is an interesting news article from 2016 [not sure the link is still good]

Japanese author Kiyosaki wrote a book in 2002 that said when the first wave of baby boomers turn 70 1/2 in 2016 and must take the mandated RMD from their tax-deferred accounts it will negatively affect the stock market.

Ironically....

This well-known Japanese author, Kiyosaki,
also co-authored another book with Trump !

Why We Want You to Be Rich: Two Men - One Message - 2006

by Donald J. Trump and Robert T. Kiyosaki


Trump also turned 70 in 2016... like the baby boomers mentioned in Kiyosaki's book.


'Rich Dad' author says the 2016 market collapse he foresaw in 2002 is coming

*

" In 2002, Kiyosaki wrote that the stock market would crash in 2016 as the first wave of baby boomers began to hit 70 1/2 in 2016 and started taking required-by-law distributions from traditional individual retirement accounts.

He still believes that: "Demography is destiny."

According to U.S. Census Bureau data, more than 76 million individuals were born between 1946 and 1964; researchers at the Population Reference Bureau determined in 2014 that 65 million of them were still living. After immigrants are added in, according to that 2014 report, the number of living U.S. baby boomers was back above 76 million.

"Interest income or cash flow on savings is virtually nonexistent, and capital-gains plays in the stock market are thwarted because stock prices are at record highs," he said.

Whatever burden millions of boomers might put on the market, he said, the situation is being made worse by events overseas, where one big country is wielding the monkey wrench.

" China has been in a bubble for 20-something years," said Kiyosaki. " It has propped up the U.S. economy falsely. When [China] stops importing, the world crashes with them. "


more at link

http://www.marketwatch.com/story/ric...ing-2016-03-23


August 2018 Trump issued an Executive Order to research raising the RMD age !

June 2019 the House overwhelmingly and bipartisanly passed a bill [SECURE Retirement Act] that does raise the RMD age a couple of years !

But this month, stupid Senator Ted Cruz put a hold on that bill which may kill it in the Senate !!


Also ironic is Trump's current trade war with China !!

[jimmyb]

Below true market rates are the only thing keeping this economy going..

Cheap money is helping Wall Street more than Main Street.

I agree..With the amount of money this administration is spending and keeping interest rates at almost nothing anyone who thinks Trump is looking out for anyone but the elite should think hard about their feelings on that.

[kytom]

Below true market rates are the only thing keeping this economy going..

Cheap money is helping Wall Street more than Main Street.

this is it! all the QE's have done straight into the market! thats why its at its all time high!

[jimmyb]

this is it! all the QE's have done straight into the market! thats why its at its all time high!

QE is still in play today. I'm not saying there's a better choice out there,because there isn't..But Trump is pushing policies to keep this illusion of a bustling economy going.Just another snake oil salesman from what I can see..