Trump Takes Control of the Federal Reserve (2022)

Trump Takes Control of the Federal Reserve (1)

With less than 12 months until the 2020 U.S. Presidential Election, President Trump is harnessing the power of the Fed to ensure his victory. Despite Trump’s past Twitter attacks on Fed Chairman Powell, the two finally appear to be dancing to the same song—the Fed is back buying Treasury bills to the tune of $60 billion per month.

The Federal Reserve is by far the world’s most powerful financial institution. And it is now acting as an extension of the White House.

Despite a weakening economy from a GDP standpoint (1.9% in Q3) and a declining manufacturing sector, the Fed is reigniting the risk-on trade. For the first time in years, its balance sheet is rising at an alarming rate as it floods the system with liquidity.

Fed Unites with Trump as Balance Sheet Balloons to Shore Up U.S. Economy

Total Assets of the Federal Reserve I Balance Sheet (Trillions)

Trump Takes Control of the Federal Reserve (2)

$60 billion in quantitative easing per month is massive. Today, the Fed’s balance sheet is expanding as fast as it did back in 2013-2014. At this pace, it may surpass its all-time high of $4.5 trillion by June 2020. Below is a ten-year chart for some context.

Trump Takes Control of the Federal Reserve (3)

In a recent MarketWatch article, Ivan Martchev clarifies what repurchase agreements mean and why the Fed’s newest round of QE can have such a powerful effect on the markets and economy:

“Balance-sheet expansion is like printing money — but for financial institutions only. It does affect the monetary base (excess reserves plus currency in circulation), which is the narrowest definition of money supply (M0). It basically causes asset-price inflation without causing uncontrolled broad money supply growth, which is why [sic] it has not (yet) resulted in hyperinflation.”

(Video) Trump Takes Control of the FED - Leads the way for other leaders to follow - Michael Tellinger

Fed’s Winning Streak Continues With U.S. Expansion

The age-old adage “don’t bet against the Fed” is holding true. As we embark upon the eleventh year of this bull market, the longest in U.S. history, the resilience of short-sellers has been tested like never before.

ZeroHedge highlights the pain short-sellers have endured recently in an article titled Going Down Swinging: “World’s Most Bearish Hedge Fund” Loses 75% Of Its Assets After Worst Year On Record. The Horseman Global Fund is under severe pressure as the Fed continues to inject liquidity; the funds’ assets under management have declined from $581 million at the start of the year to just $150 million today—a loss of 75%, according to data compiled by ZeroHedge and Citco Fund Services.

Those who have bet against the Fed or Trump have been burned.

Trump’s All-in Bet on the Economy is Winning

On Monday, November 18th, 2019, ZeroHedge.com reported,

“Moments ago, the Fed announced that in a previously unannounced meeting that was not on the official White House calendar, Fed Chair Powell met with Trump and Mnuchin at the White House “to discuss the economy, growth, employment and inflation”, marking the second face-to-face meeting between the world’s two most powerful people amid Trump’s relentless criticism of the central bank.”

Furthermore, in a sign that Powell is cozying up to Trump,

“During his Congressional testimony last week, Powell called the U.S. economy a “star” performer and voiced solid confidence that its record expansion will stay on track even as, paradoxically, the Fed recently cut rates three times in the past four months and in October launched NOT QE (spoiler alert: it is QE) to purchase T-Bills in a move which Bank of America described is QE in all but name.”

Rarely does a Fed Chair tout the economy while slashing rates.

Jim Rickards Explains How Trump Took Over the Fed

American lawyer, financial commentator, and best-selling author Jim Rickards dubbed Donald Trump a genius in late October 2019. According to an interview with Rickards, Trump’s genius is in large part due to the fact that he “owns” the Fed:

(Video) Trump takes more shots at U.S. Federal Reserve

“Trump came in. There were two vacancies on the board of governors at the Federal Reserve. Why were there two vacancies?

Well, Obama was so sure that Hillary was going to win that he didn’t bother with the appointments. He said, well, I’ll give them to Hillary. She’ll appoint some strong hands. So, Trump got two seats right off the bat, then there were a couple of resignations, so there kind of went up to four seats, and then one more since then. Plus promoting J. Powell from a governor, where he already was a governor before Trump, to Chairman.

So, Lael Brainard is going to end up as the only non-Trump appointee on the Board of Governors of the Federal Reserve. She must feel like a hostage when she goes into the room.

Trump owns the Federal Reserve.”

You can watch the full interview here: James Rickards: “Donald Trump is a Genius”

We will reserve judgement on the “genius” title for now…

Many people read Trump’s bombastic and sometimes ridiculous tweets and think Powell and the Fed must hate his guts. They don’t realize he hand-selected almost the entire Board of Governors. Despite claims otherwise, the Fed has always been political; we are witnessing this truth today, just as we did during the Obama years.

Trump’s Power Grows Beyond the Fed

While the media stays glued to Trump’s latest tweets and the ongoing impeachment proceedings, Trump is appointing what could become a record number of judges to America’s courts.

According to a New York Times article titled, Trump and Senate Republicans Celebrate Making the Courts More Conservative,

(Video) Trump says the Fed is 'out of control'

“We are going to be, I think, just about No. 1 by the time we finish — No. 1 of any president, any administration,” President Trump said.

In the same article, Brian Fallon, the head of progressive group Demand Justice, was quoted,

“Democrats have been caught napping on the courts for a while now, and we are going to pay the price for years to come.”

A Huffington Post article titled, Trump Has Confirmed 150 Lifetime Federal Judges. That’s A Lot compares Trump’s judicial appointments versus Obama’s and Bush’s,

“Trump is way ahead of everyone on appeals court judges ― the people who have the final say in nearly all federal appeals cases around the country.”

In fact,

“…nearly 1 in every 4 seats on U.S. appeals courts is now filled by a judge appointed by Trump.”

Trump Takes Control of the Federal Reserve (4)

While the numbers above have already grown, they are poised to grow even more substantially.

Earlier this month, Bloomberg Law confirmed,

(Video) Federal Reserve chief asked if he gave into Donald Trump

“So far, the Trump has appointed nearly 160 federal judges to lifetime seats to district and appeals court seats.”

And that,

“The administration is currently racing to surpass 180 judicial appointments in the next couple of months, a goal Trump recently announced.”

Trump Targets Supreme Court Domination

In a final comparison, Trump has already tied Obama by appointing two judges to the Supreme Court: Neil M. Gorsuch and Brett Kavanaugh. The importance of the U.S. Supreme Court is immeasurable. In July 2019, the U.S. Supreme Court approved $2.5 billion via military funding for construction of a wall on the southern border after a 5-4 ruling in Trump’s favor. Not coincidentally, there are 5 Republican appointed Supreme Court Justices and 4 Democrat appointees.

If Trump wins in 2020, it could mean two more conservative Supreme Court Justices. Two of the nine Supreme Court Justices with a more liberal-leaning track record are Ruth Bader Ginsburg, 86, and Stephen Breyer, 81. Both have served as associate justices since the mid-90s and will be unlikely to serve until the end of Trump’s potential second term in 2024.

Trump Eyes U.S. Justice System in Final Term

Trump is positioning himself to make significant moves in his second term—if he can get re-elected. After all, Trump-appointed governors are already running the Federal Reserve, and his influence is growing within the U.S. justice system.

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(Video) Trump says Federal Reserve is 'out of control'

FAQs

Which president shut down the Federal Reserve? ›

The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913.
...
Federal Reserve Act.
Enacted bythe 63rd United States Congress
Citations
Public law[63-43 Pub.L. 63–43]
Statutes at Largech. 6, 38 Stat. 251
Legislative history
5 more rows

Does the president of the United States control the Federal Reserve? ›

It is governed by the presidentially-appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks.

Who really controls Federal Reserve? ›

The Board of Governors, an agency of the federal government that reports to and is directly accountable to Congress, provides general guidance for the System and oversees the 12 Reserve Banks.

Can the president remove the Federal Reserve chairman? ›

The chair may serve multiple terms, pending a new nomination and confirmation at the end of each term, with William McChesney Martin as the longest serving chair from 1951 to 1970 and Alan Greenspan as a close second. The chairs cannot be dismissed by the president before the end of their term.

Why did Nixon take us off the gold standard? ›

President Richard Nixon closed the gold window in 1971 in order to address the country's inflation problem and to discourage foreign governments from redeeming more and more dollars for gold.

Why did Roosevelt take the us off the gold standard? ›

Soon after taking office in March 1933, President Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it.

Does the President have any power over the Federal Reserve? ›

The President nominates the chair and is permitted to be vocal about the direction of the Fed, but the President cannot direct the Fed to raise or lower interest rates. Members of the Board of Governors of the Fed serve 14-year terms, which obviously has some presidential overlap and keeps the Board independent.

Do we need the Federal Reserve? ›

By performing all of its various duties—setting interest rates, supervising and regulating financial institutions, providing national payment services, and maintaining the stability of the nation's financial system—the Fed plays a crucial role in preserving the health of the economy, especially during periods of ...

How much money is in the Federal Reserve? ›

U.S. Reserve Assets (Table 3.12)
Asset2019
1Total129,479
2Gold stock111,041
3Special drawing rights2 350,749
4Reserve position in International Monetary Fund2 526,153
2 more rows

What do the Rothschilds own today? ›

Today, Rothschild businesses are on a smaller scale than they were throughout the 19th century, although they encompass a diverse range of fields, including: real estate, financial services, mixed farming, energy, mining, winemaking and nonprofits.

Who owns most of the world banks? ›

The organizations that make up the World Bank Group are owned by the governments of member nations, which have the ultimate decision-making power within the organizations on all matters, including policy, financial or membership issues.

Who prints money in the US? ›

The Bureau of Engraving and Printing produces United States currency notes, operates as the nation's central bank, and serves to ensure that adequate amounts of currency and coin are in circulation.

Can members of the Federal Reserve be removed? ›

We also concluded that the procedures for removing Reserve Bank FOMC members are constitutional. Reserve Bank FOMC members are subject to plenary removal and supervision by the Board of Governors, which tracks the default rule that an officer is subject to removal at will by the appointing official.

Can Federal Reserve Board members be removed? ›

The law provides for the removal of a member of the Board by the President "for cause". The Chair and Vice Chair of the Board of Governors are appointed by the President from among the sitting Governors.

Does president control interest rates? ›

How Short-Term Interest Rates Are Determined. Short-term interest rates are determined by central banks. A government's economic observers create a policy that helps ensure stable prices and liquidity.

What would happen if the dollar was backed by gold? ›

That means the US dollar would be “severely devalued,” causing inflation, and since global trade uses the US dollar as a reserve currency, it would “grind to a halt.” Conversely, returning to the gold standard at a low gold price would cause deflation.

What is U.S. dollar backed by? ›

Why Is Fiat Money Valuable? In contrast to commodity-based money like gold coins or paper bills redeemable for precious metals, fiat money is backed entirely by the full faith and trust in the government that issued it. One reason this has merit is that governments demand that you pay taxes in the fiat money it issues.

Is U.S. dollar backed by gold? ›

Federal Reserve notes are not redeemable in gold, silver, or any other commodity. Federal Reserve notes have not been redeemable in gold since January 30, 1934, when the Congress amended Section 16 of the Federal Reserve Act to read: "The said [Federal Reserve] notes shall be obligations of the United States….

When did the US make it illegal to own gold? ›

The passage of the Gold Reserve Act of 1934 signified that the American people could no longer hold gold, with the exception of jewelry and collectors' coins. After the passage of the Gold Reserve Act several people were indicted for violating the clauses that restricted gold ownership and trade.

What President confiscated gold? ›

FDR's 1933 Gold Confiscation was a Bailout of the Federal Reserve Bank. 20,000 metric tons of gold were 'circulating naked' in 1933.” President Franklin Delano Roosevelt's 1933 executive order outlawing the private ownership of gold in the United States was arguably unconstitutional. But why did he do it ?

What year did the US government confiscate gold? ›

May 1, 1933 – President Roosevelt's Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce.

Does the President control money supply? ›

The U.S. Federal Reserve controls the money supply in the United States, and while it doesn't actually print currency bills itself, it does determine how many bills are printed by the Treasury Department each year.

Where does the Federal Reserve get its money? ›

The Federal Reserve is not funded by congressional appropriations. Its operations are financed primarily from the interest earned on the securities it owns—securities acquired in the course of the Federal Reserve's open market operations.

Is the Reserve Bank independent? ›

As an independent central bank, the Reserve Bank is accountable to the Parliament for its actions.

Why are people against the Federal Reserve? ›

In The Case Against the Fed, Murray Rothbard argued in 1994 that, although a supposed core function of the Federal Reserve is to maintain a low level of inflation, its policies (like those of other central banks) have actually aggravated inflation. This occurs when the Fed creates too much fiat money backed by nothing.

What would happen if we abolished the Fed? ›

Global markets would also need some sort of economic direction from the U.S. The Fed manages the dollar — and as the world's leading currency, a void left by a Fed-less America could throw those markets into chaos with uncertainty about who's managing U.S. interest rates and the American economy.

Who opposed the Federal Reserve Act? ›

The House of Representatives passed the Federal Reserve Act by a vote of 298 to 60. The Senate also passed the measure 43 to 25. In both chambers of Congress, it was the anti-banker Democrats that overwhelmingly supported the Act, while for the most part the pro-banker Republicans opposed it.

How much does it cost to make a $1 bill? ›

Printing a one-dollar bill costs 5.4 cents while printing a $100 bill costs 15.4 cents. Surprisingly, the most expensive bill to print this year will be the $50 bill at 19 cents a piece. Smaller denominations are generally less expensive to print because of fewer security features.

Why U.S. can print money without inflation? ›

“The short answer is because the U.S. dollar is the global reserve currency. In other words, most countries and companies from other countries usually need to transact business in U.S. dollars, making them exposed to the value of their currency relative to U.S. dollars.

How many US dollars are in existence? ›

This amount includes notes, coins and all kinds of currencies. If you are searching for the total amount of physical money — notes and coins — you can expect to have around $40 trillion in the world right now. This figure only includes the “narrow money” that is, M1 — M0 and demand accounts.

Are the Rockefellers and Rothschilds related? ›

The transatlantic union brings together David Rockefeller, 96, and Lord Rothschild, 76—two family patriarchs whose personal relationship spans five decades. The Rockefeller group traces its roots back to 1882 when John D. Rockefeller established one of the world's first family offices dedicated to investing his wealth.

Are the Rothschilds the richest family in the world? ›

Yes. With a private fortune of over $500 billion dollars, the Rothschild family is considered the richest in the world.

Who control the money in the world? ›

To ensure a nation's economy remains healthy, its central bank regulates the amount of money in circulation. Influencing interest rates, printing money, and setting bank reserve requirements are all tools central banks use to control the money supply.

Is Russia part of the World Bank? ›

The Russian Federation joined the World Bank after the collapse of the Soviet Union, which led to the formation of a new state and economy as a constitutional republic. The federation joined the World Bank on June 16, 1992.

Which country has the highest loan from World Bank? ›

Of this, the World Bank has disbursed $73 billion, with India repaying $37 billion. India is followed by Brazil ($58.8 billion), China ($55.6 billion), Mexico ($54 billion) and Indonesia ($50.5 billion).

What countries are not part of the World Bank? ›

The five United Nations member states that are not members of the World Bank are Andorra, Cuba, Liechtenstein, Monaco, and North Korea.

What is the average life of a $1 bill? ›

6.6 years

Can states print their own money? ›

Section 8 permits Congress to coin money and to regulate its value. Section 10 denies states the right to coin or to print their own money. The framers clearly intended a national monetary system based on coin and for the power to regulate that system to rest only with the federal government.

How much money did the U.S. government print in 2021? ›

In 2021 $13 trillion was printed. Breaking down to $5.2 for COVID + $4.5 for quantitative easing + $3 for infrastructure.

Who owns the Federal Reserve? ›

The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.

Who heads the Federal Reserve? ›

Jerome H. Powell first took office as Chair of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term.

How much do members of the Federal Reserve make? ›

How Much Does Federal Reserve Pay? Federal Reserve pays an average of $91,007 per year, or $43.75 an hour. Federal Reserve pays those in the bottom 10 percent $47,000 a year, and the top 10 percent over $173,000.

Is the Federal Reserve owned by the US government? ›

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public.

What is the salary of the Federal Reserve chairman? ›

Salary Jerome Powell

- Forbes Oct 2021: The Board chairman, currently Jerome Powell, makes $203,500. - Fox Business Jun 2020: Congress sets the salaries of the Fed board members. In 2019, the chair's annual salary was $203,500. The annual salary of the other board members, including the vice chair, is $183,100.

Can the chairman of the Federal Reserve be fired? ›

The chair may serve multiple terms, pending a new nomination and confirmation at the end of each term, with William McChesney Martin as the longest serving chair from 1951 to 1970 and Alan Greenspan as a close second. The chairs cannot be dismissed by the president before the end of their term.

Does the president have power over the Federal Reserve? ›

The president has the authority to pick each of the seven members on the Fed's board of governors, who have permanent voting positions on the rate-setting Federal Open Market Committee.

Does the president has direct control of the Federal Reserve Board? ›

The Fed is independent in the sense that monetary policy and related decisions are made autonomously and are not subject to approval by the federal government. However, its governors are appointed by the President and must be confirmed by Congress.

How much control does the president have? ›

The President has the power either to sign legislation into law or to veto bills enacted by Congress, although Congress may override a veto with a two-thirds vote of both houses.

Why are presidents of 2 Federal Reserve Bank branches resigning? ›

The Boston and Dallas Federal Reserve Bank presidents announced their resignation following mounting scrutiny over their trading activity. Records reveal that the policy makers' trading activity met regulatory requirements but raised possible conflict of interest concerns.

Did Biden renominate Powell? ›

President Joe Biden on Monday renominated Federal Reserve Chairman Jerome Powell to another term as chairman of the nation's central bank. The president also named Fed board member Lael Brainard as vice chair.

How much is Jerome Powell worth? ›

Based on public filings, as of 2019 Powell's net worth was estimated to be in a range between $20 million and $55 million. Powell has served on the boards of charitable and educational institutions including DC Prep, a public charter school, the Bendheim Center for Finance at Princeton University, and The Nature ...

Is the Federal Reserve owned by the government? ›

Myth: Private sector banks own the Fed

Some observers mistakenly consider the Federal Reserve to be a private entity because the Federal Reserve Banks are organized similarly to private corporations. In truth, the Fed is not "owned" by anyone.

What is the Fed trading scandal? ›

In September, 2021, the Fed became embroiled in scandal amid reports that two Federal Reserve Bank Presidents – both of whom have since stepped aside – had actively traded individual stocks and other financial assets while helping set key Fed policies at the height of the pandemic.

What 6 men created the Federal Reserve? ›

Sections. In November 1910, six men – Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg – met at the Jekyll Island Club, off the coast of Georgia, to write a plan to reform the nation's banking system.

How many Federal Reserve members are there? ›

The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate.

Who did Biden put in charge of the Federal Reserve? ›

Biden nominates Federal Reserve Chairman Jerome Powell to 2nd term.

Who did Biden nominate to Federal Reserve? ›

WASHINGTON (AP) — President Joe Biden said Friday he plans to nominate Michael Barr, the dean of the University of Michigan's public policy school, to be the Federal Reserve's vice chairman of supervision.

Who did Biden appoint for economy? ›

Key Takeaways. President Biden won the 2020 election and nominated former Federal Reserve Chair Janet Yellen to be his treasury secretary. Shalanda Young was confirmed as the first Black woman to lead the Office of Management and Budget. The chair of the Council on Economic Affairs is labor economist Cecilia Rouse.

What is the salary of Joe Biden? ›

Biden's pay will increase to $231,900.

Is the Federal Reserve chair the most powerful person in the world? ›

The chair is considered one of the most powerful positions in the entire world, and any change to long-term interest rates has a pronounced economic effect that ripples through all world markets.

What is Donald Trump's net worth? ›

Why are people against the Federal Reserve? ›

In The Case Against the Fed, Murray Rothbard argued in 1994 that, although a supposed core function of the Federal Reserve is to maintain a low level of inflation, its policies (like those of other central banks) have actually aggravated inflation. This occurs when the Fed creates too much fiat money backed by nothing.

Who owns the Reserve Bank? ›

So is the Fed private or public? The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends.

What do the Rothschilds own today? ›

Today, Rothschild businesses are on a smaller scale than they were throughout the 19th century, although they encompass a diverse range of fields, including: real estate, financial services, mixed farming, energy, mining, winemaking and nonprofits.

Videos

1. What Does the Federal Reserve Do?
(TD Ameritrade)
2. President Trump's Full, Unedited Interview With Meet The Press | NBC News
(NBC News)
3. Trump takes credit for strong stock market
(Washington Post)
4. Trump ramps up criticism of Federal Reserve over interest rates
(CNBC Television)
5. Trump takes on the Fed
(Fox Business)
6. Trump attacks Fed independence
(Financial Times)

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