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The Trump Presidency 15

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The Don said:
That's true. In the UK our interest rates are still low because we're attempting to recover economically from the effects of the 2008 crash, 9 years of government austerity and the economic effects of the Brexit referendum.

OTOH the US economy has been growing strongly for the best part of a decade - that would tend towards higher, rather than lower interest rates to keep inflationary pressures in check.
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Australia has not had a recession in 3 decades. They are at 1%.
 
BobTheCoward said:
Australia has not had a recession in 3 decades. They are at 1%.
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Australia's interest rates were considerably higher until relatively recently. The Australian economy had been roaring along, a significant part of this success was the sale of raw materials to China.

Recently the Australian economy has been facing some pressures and growth is at low rates. The Australian government has taken steps to address this:

The Australian economy grew by just 0.4% in the March quarter, contributing to a seasonally adjusted growth rate of 1.8%. The result contrasts with real GDP growth of 2.25% forecast in the budget, meaning the economy would have to grow by 1.3% in the last quarter of 2018-19 to meet the forecast.

The Australian Bureau of Statistics figures, released on Wednesday, also show that GDP per person fell for the third consecutive quarter, by 0.03%, extending the “per-capita recession” declared after last quarter.
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https://www.theguardian.com/busines...owest-in-10-years-amid-calls-for-swift-action
 
There is no linear connection between your country's interest rates and that of other countries. Indeed, there can be cases where economists would prefer them to be reverse-correlated.
So even if Trump is right on the fact, this doesn't mean in the least that the current Fed policy isn't the best for the US.
The discussion hinges almost entirely on domestic factors (such as a bizarre tax policy), not what other central banks are doing.
 
I thought one problem with excessively low interest rates is that there's nothing to cut them to should the need arise.

Personally, as a saver rather than a borrower I don't see why everything should be run to cater to people and businesses and banks borrowing all the time. Why can't they use their own money? I remember when a humble savings account earned 3% interest, and there wasn't a depression on with banks failing and businesses going under from the strain of interest rates.
 
TragicMonkey said:
I thought one problem with excessively low interest rates is that there's nothing to cut them to should the need arise.

Personally, as a saver rather than a borrower I don't see why everything should be run to cater to people and businesses and banks borrowing all the time. Why can't they use their own money? I remember when a humble savings account earned 3% interest, and there wasn't a depression on with banks failing and businesses going under from the strain of interest rates.
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The thing is that interest rates have been well below long-term trend since the 2008 crash and as a result, business has become habituated to those low interest rates.

Of course President Trump has a business which relies on cheap debt to make ends meet. Ideally he wouldn't be calling for policy solely to line his own pockets - but that's not really his style at all....
 
The Don said:
Australia's interest rates were considerably higher until relatively recently. The Australian economy had been roaring along, a significant part of this success was the sale of raw materials to China.

Recently the Australian economy has been facing some pressures and growth is at low rates. The Australian government has taken steps to address this:



https://www.theguardian.com/busines...owest-in-10-years-amid-calls-for-swift-action
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What is your point with this reply exactly? That governments set rates based on national macroeconomic concerns? Obviously.
 
BobTheCoward said:
What is your point with this reply exactly? That governments set rates based on national macroeconomic concerns? Obviously.
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You seemed to be saying "Australia has low interest rates and hasn't had a recession in ages - so it's fine to cut interest rates when an economy is growing nicely". My apologies if I read too much into your comment but I was pointing out the Australia had recently cut interest rates as part of a package of measures to stave off a recession.

President Trump is calling for a cut in interest rates at a time when there appears to be no good national macroeconomic reason for it. Instead it seems to be based on his own desire for cheap money to further his own business interests.

Edited to add....

Don't worry, I'll try not to make the mistake of replying to one of your posts again :)
 
So...

Trump did a whole "go back where they came from" rant about 4 non-white Congresswomen, told lies about one of them in order to stir up a live crowd who chanted "send her back" at him, and when asked about this situation Kellyanne Conway's response was to ask the reporter asking the question what their ethnicity was.

Is it fair to say that even the people most prepared to give the benefit of the doubt must now admit that we've gone from "dogwhistles" to "unabashed racism"?
 
Oh, and this is quite fun:

vjH2w7s.jpg
 
Trump Tweets

I like New York Fed President John Williams first statement much better than his second. His first statement is 100% correct in that the Fed “raised” far too fast & too early. Also must stop with the crazy quantitative tightening. We are in a World competition, & winning big,...

....but it is no thanks to the Federal Reserve. Had they not acted so fast and “so much,” we would be doing even better than we are doing right now. This is our chance to build unparalleled wealth and success for the U.S., GROWTH, which would greatly reduce % debt. Don’t blow it!

There is almost no inflation!
 
President Trump is just trying to protect us from a poisonous, murderous ideology (socialism), and dirt-world citizens from importing a failed, low-IQ mentality incubated in crime-infested, ****-hole countries. The antidote for the existential threats of communism and horde-immigration is fascism. Real Americans will pick up a sign and start chanting.
 
TragicMonkey said:
I thought one problem with excessively low interest rates is that there's nothing to cut them to should the need arise.
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Yes, that is a problem.

It means that if/when the next recession happens, it will be much harder for the government to deal with it. (The same goes with the deficit.... The republican tax cuts and deficits mean that the governments will have less flexibility to stimulate the economy.)

Trump has really left a ticking time-bomb for his successor.

Personally, as a saver rather than a borrower I don't see why everything should be run to cater to people and businesses and banks borrowing all the time. Why can't they use their own money?
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Because if they tried that, businesses and people wouldn't have enough money to make big purchases (like houses) and the economy would collapse.
 
Cain said:
President Trump is just trying to protect us from a poisonous, murderous ideology (socialism), and dirt-world citizens from importing a failed, low-IQ mentality incubated in crime-infested, ****-hole countries. The antidote for the existential threats of communism and horde-immigration is fascism. Real Americans will pick up a sign and start chanting.
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But only nice, Evangelical, apple-pie, salt-of-the-earth, morally sound, pro-life fascism.
You know, the good kind.
 
Segnosaur said:
Because if they tried that, businesses and people wouldn't have enough money to make big purchases (like houses) and the economy would collapse.
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Perhaps people shouldn't buy what they can't afford? Perhaps being able to borrow so easily is what makes the prices of big purchases so high?
 
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