jakiro
Source: The rich man’s surplus grain
In the past week, Trump has made two more big news.
The first big news was of course that he shouted a pause button for the Sino-US tariff war.
On the 17th local time in the United States, Trump said:
“I think we will reach an agreement with China, and we will reach an agreement with everyone. If we can’t reach an agreement, then we will set a goal and then set it like that, which is also good. It should be done in the next three to four weeks.”
In other words, he believes that the “tariff war” with China may be better handled and resolved in the next few weeks.
Unfortunately, I think this may be his personal wishful thinking. With his changing policies and the grass-roots team structure of the Manchu Mansion, no one knows what will happen next.
Another incident, which is what I want to talk about today, is that Trump once again intensively attacks Federal Reserve Chairman Powell.
Anyone who has been reading my article knows that I have always been sarcastic about the successive Federal Reserve Chairmans except Walker, including the current Powell. I always think they pretend to be profound and manipulate the market…
But suddenly, Trump was despicable and said that Powell “manipulates politics” and asked him to resign as soon as possible. At this time, I felt that he could support Powell.
Just last Thursday, Trump criticized Powell three times.
Early in the morning, Trump said:
I agreeFor Powell, he did not do his job well.If I ask, he has to leave.Powell couldn’t make me happy.He is always slow to move.
During the lunch break of the US stock market, Trump said:
I agreeFor Powell, he did not do his job well.If I ask, he has to leave.Powell couldn’t make me happy.He is always slow to move.
After a few dozen minutes, Trump “blame” Powell again, saying that the Federal Reserve should cut interest rates, which is what the Federal Reserve owes the American people.Powell will face great political pressure.
In short, Trump has been very dissatisfied with Powell recently. He kept saying that the rate cuts were “always too late and wrong”, accusing him of “manipulating politics” and “too bad”, and putting pressure on interest rate cuts again, believing that Powell “should have lowered interest rates as long ago as the European Central Bank” and calling on Powell to “resign as soon as possible.”
This is Trump’s usual black and white trick.
It’s so funny. Anyone on the earth with eyes and brains can see it.Manipulate politicsNo one in the world has done more than Trump himself, and what’s more shameless is that he has also manipulated policies and constantly made efforts in the cryptocurrency and the US stock market, allowing his family and people in the surrounding circle to make billions or even tens of billions of dollars in profits.
Trump has repeatedly issued statements in self-media, saying that US inflation is falling, Federal Reserve Chairman Powell should take action to lower interest rates, but his actions are always slow and fail to do his job well. He also gave Lao Bao a nickname similar to “Sleepy Joe”.
Trump’s usual style is to blame the victim for being a criminal.
What’s more, when he was running for president in 2024, he kept warning Powell that you can’t cut interest rates, you can’t cut interest rates, otherwise you are helping the Democratic Party, otherwise you are betraying the people…
As a result, he has just come to power for less than three months and has urged Powell to cut interest rates countless times. This is not political manipulation. What is political manipulation?
Although Trump’s criticism of Powell has become very common, this time it has made the market feel the danger of “reality” and is not just casually speaking like before.
Because, this time, the news that “is studying whether to remove Powell” was provided by Hassett, the current director of the White House National Economic Commission, which means that Trump has become angry with the entire team in the matter of firing Powell, and his team is likely to be working on it at the moment.
Just a few days ago, Powell also specifically emphasized that the independence status of the Federal Reserve Chairman was determined by Congress and a legal issue. He believed that Trump did not have the power to fire him – and he also emphasized that it was because of the surge in inflation expectations and various uncertainties caused by Trump’s tariff policy, so the Federal Reserve decided to wait and see what the interest rate cuts.
As you can imagine, Trump was of course furious when he heard these words, so he attacked Powell three times a day on Thursday.
The only provision in U.S. law specifically targeting the removal of Fed board members can be found in Section 10 of the Federal Reserve Act:“Each member of the Fed’s board of directors is 14 years unless the president removes him early for some reason.”
It’s very reliable to understand this sentence,“The president has the right to remove any director of the Federal Reserve”, and Powell understood it as“You can’t dismiss me without a reason”.
“For reasons”This term, in US legal rulings, will be interpreted as“Serious misconduct, negligence, malfeasance or abuse of power”, so Trump must find evidence of Powell’s dereliction of duty or dereliction of duty.
But the problem is that from 2023 to date, Powell has done a very good job. On the one hand, he has brought the ultra-high inflation that has not been seen in 40 years to the level of over 2%. There has been no large-scale unemployment and economic recession, and the stock market has not fallen sharply.In 2025, when the economy is slowing down, the Federal Reserve still holds a good hand of 4.25% federal interest rate. Slow rate cuts can smooth out the economic cycle. What reason do you find to say that it is dereliction of duty?
Alas, don’t say that, with the Trump team’s ability to confuse black and white with small braids, they have really found a “reasonable reason” to remove Powell:
1) During Trump’s first term, the Fed’s actions aimed at helping the Democratic Party (re-taking power);
2) During Biden’s tenure, the Federal Reserve (debt) did not warn Biden’s out of control of spending will bring serious inflation.
Because this matter has come to the team’s execution, the market really feels the risk.
Regardless of the next result, after this incident, the Federal Reserve’s credibility was damaged and the credit foundation of the US dollar was shaken.
If Trump’s “dismissal” fails and the Federal Reserve withstands the pressure and does not cut interest rates, the financial market will have to continue to endure high interest rates, which is extremely unfavorable to the capital market.
If the Fed cannot withstand the pressure to cut interest rates, the market will think that it is under pressure from Trump and will no longer trust the Fed. The crisis triggered by this is more serious than not cutting interest rates, because the Fed may really be “political manipulation”. From then on, the Fed’s godly position in the financial market will be shaken, and the market will no longer believe in the Fed’s so-called “dollar value” promise.
If Powell is really fired by Trump through legal procedures, then it will be a mess in the world, because it will prove that the “central bank independence” that the Federal Reserve has claimed over the past 40 years is a joke, which means that the US dollar may issue additional additional funds at any time due to presidential requests like Trump. The US dollar, which is originally a credit banknote, will fall to the same level as Zimbabwean and Venezuelan currencies.
In short, the damage to the US dollar credit system is a horizontal knife, a vertical knife, and another knife is a half knife.
Perhaps because of feeling the danger of this matter, gold soared as soon as the market opened today, up 3%.
Further considering that in the past 10 days, gold has risen by 6%, and in just two weeks, gold has soared by 14%, which is a reflection of the extreme distrust of the financial market in the US dollar currency.
You should know that even when the Federal Reserve announced QE after the global financial crisis in 2008, gold did not soar like this. Even when the epidemic crisis came and the Federal Reserve announced unlimited QE (unlimited printing of money)!
This shows how much damage Trump’s credit foundation to the dollar is.
However, just five days ago (April 16), Powell issued another statement emphasizing that Trump has no right to dismiss him-
“The independence of the Federal Reserve is a legal issue.”
The US President and the Federal Reserve can be said to be the two most powerful people in the world. Now, gods are starting to fight, and all assets are affected except for gold as the mirror of the US dollar.
If you want to further understand the evolutionary relationship between the independence of the Federal Reserve and the power of the US president, please click on an article I wrote 5 years ago:
Chuan Diudhi, can you fire Boss Bao?
