Category Archives: Dollar
King Dollar Rate Hike
President Trump doesn’t want the Fed to raise interest rates. And he said so. Which is frowned on since the Fed is supposed to be independent.
It’s also awkward for Trump’s chief economic advisor Larry Kudlow, a strong advocate for a strong dollar. Or King Dollar as he likes to say.
Trump hired Kudlow in March. But in February here’s what Kudlow had to say on CNBC:
A strong dollar is an essential pillar of economic prosperity with minimal inflation, but we worry that the White House has not adopted this strategy. So we urge the Trump administration to return to the successful “King Dollar” policies that worked in the 60’s, 80’s and 90’s.
Uh oh. He went on to say:
We also worry that the recent widening trade deficit numbers will further tempt the administration into a weak dollar strategy.
Trump’s Animal Spirits
James Fallows, in the October Atlantic, says Jane Goodall told him that Donald Trump reminds her of a chimp:
In many ways the performances of Donald Trump remind me of male chimpanzees and their dominance rituals,” Jane Goodall, the anthropologist, told me shortly before Trump won the GOP nomination. “In order to impress rivals, males seeking to rise in the dominance hierarchy perform spectacular displays: stamping, slapping the ground, dragging branches, throwing rocks. The more vigorous and imaginative the display, the faster the individual is likely to rise in the hierarchy, and the longer he is likely to maintain that position.”
Animal Spirits
The elite made a monkey of Trump before the election. But since then he’s released the stock market’s animal spirits. Oil and the dollar dig The Donald too.
Many 401-k investors are bullish because stocks have hit record highs. But Clinton Foundation investors – not so much.
Well, at least one Clinton supporter has done ok. Warren Buffett’s Berkshire Hathaway is up 8% since the election.
Ayatollah Banking Behavior
IBD had an editorial and the WSJ had an op-ed on Ayatollah banking behavior. Zany authoritarians worth billions who aren’t Donald Trump – I thought it was worth a cartoon.
Now that the mullahs are getting their moola back, possibly 100 billion in frozen assets thanks to the Iran nuclear deal, they want to be able to move it through the U.S. banking system. That’s been a no-no in the past. Apparently it would make it easier to launder money for terrorism. On the other hand it could make it easier for U.S. intelligence to keep track of Iran’s money.
Ayatollah Banking Behavior
Anyway, last summer Adam Szubin of the Treasury Department told Congress, “Iran will not be able to open bank accounts with U.S. banks, nor will Iran be able to access the U.S. banking sector.” Now Treasury Secretary Jack Lew seems less committal saying the administration is trying “to make sure Iran gets relief.”
Since the Iran nuclear deal isn’t a signed treaty, Iran could walk away if it doesn’t get what it wants.
Yellen Takes Off Training Wheels
Janet Yellen took the training wheels off the economy on Wednesday. After seven years of near zero percent interest rates, the Fed hiked rates a quarter percent.
Meanwhile, Congress passed a 2,000 page, 1.2 trillion dollar budget. That tacked another 157 billion onto the 18.5 trillion dollar national debt.
Yellen
On Friday the Dow dropped 370 points.
David Stockman says, “sell the bonds, sell the stocks, sell the house”. IBD wonders if the markets know something the Fed doesn’t.
