Donald Trump’s Useful Idiot

Written by Jason Simpkins
Posted March 29, 2019

The Fed was already a shadowy cabal that acted on behalf of banking interests. But now it’s becoming something worse — a shadowy cabal that acts on behalf of political interests.

That is, the Federal Reserve, which is supposed to be independent, is being infiltrated and manipulated by politicians.

Namely, President Donald Trump.

Now before I go any further, let me give you a trigger warning...

What I’m about to say may, in fact, be incredibly unpopular among the readers of this newsletter.

So if you think Donald Trump is a Godsend and can do no wrong…

Stop reading right now.

Don’t hate-read this editorial.

Only continue reading if you’re actually interested in facts and a genuine analysis of our current political climate from someone who really doesn’t like or trust any politician on the planet.

Sound good?

Okay...

Now, I can tell you something important that affects your financial future in a profound way.

Which is that President Trump is appointing an unqualified lackey to the Federal Reserve board in an effort to manipulate monetary policy.

For months, Trump has bashed the Fed for raising rates — a decision that he blamed for stock market drops and economic weakness.

Back in October, as the stock market plunged, Trump said Fed chairman Jerome Powell "almost looks like he's happy" to be raising interest rates.

"Every time we do something great, he raises the interest rates," he said. "I'm paying interest at a high rate because of our Fed."

Trump Fed Tweet

Trump’s attacks on the Fed were unprecedented, but ultimately, ineffective.

So now, he’s seeking to tilt the scales in his favor by installing a loyalist to the Fed’s board.

That’s Stephen Moore.

One might take issue with the fact that Stephen Moore is a “supply-side economist.”

Not me, though.

I take issue with the fact that Moore, by his own admission, has no idea what the Federal Reserve does.

“I’m kind of new to this game, frankly, so I’m going to be on a steep learning curve myself about how the Fed operates, how the Federal Reserve makes its decisions,” Moore said of his nomination. “It’s hard for me to say even what my role will be there, assuming I get confirmed.”

Well then…

I guess I have to ask: If Stephen Moore doesn’t know how the Fed works, or what it is he’ll be doing there, why is he being nominated to such an important position within its ranks?

It’s because, like Kim Jong-Un, Moore has curried favor with the president by flattering him.

In fact, Moore co-authored an entire book that was a love letter to the president, called “Trumponomics.”

At a Young America’s Foundation event, Moore praised Trump’s physique, saying he “looks like a football player, in incredible, great shape.”

“I was really angry” about the Fed’s December rate increase, Moore told The New York Times. “I was furious — and Trump was furious, too. I just thought that the December rate increase was inexplicable. Commodity prices were already falling dramatically.”

“The other day I was on a panel with media reporters and I suggested in all seriousness that Donald Trump deserves the 2018 Nobel Prize in Economics,” Moore said last year.

And two days after Trump’s Christmas Eve tweet slamming the Fed, Moore piled on:

“In one of the most remarkable Abbott and Costello routines in modern times, the economic wizards at the Fed again raised interest rates the week before Christmas,” Moore wrote in an op-ed. “Their crackerjack logic for doing so is to steer America on a course toward recession so they have the tools in hand to end the recession that they themselves created.”

“Trump wants to fire the Fed chairman, though it is doubtful he has the authority to do that,” he went on. “Much better for Powell to do the honorable thing and admit that his policies have had disastrous economic and financial consequences and resign.”

Okay… So maybe Moore’s just a dove?

NOPE.

In 2015, he sang a much different tune...

Moore Fed Headline“The Fed is expected to bid farewell to seven years of its zero interest rate policy,” he wrote. “Wall Street is petrified because investors have become hyper-dependent on this zero rate scheme and the floods of dollars injected into the economy just as an addict craves crack cocaine.”

“The printing press, alas, is not a job creator,” he went on. “If it were, Mexico and Argentina would be the richest countries in the world, and people would be lining up at the U.S. southwest border to get out rather than to get in.”

And then, he mercifully concluded: “Micromanaging the economy through the lever of money creation at the grand fiefdom within the Fed doesn’t work and that should be the enduring lesson of the last seven years’ failed interventionist experiment.”

So basically, Moore, who is NOT a Ph.D. economist, has somehow managed to take both sides of the interest rate debate.

In his opinion, the Fed’s decision to slash rates to historic lows was an abject failure that did nothing to boost the economy. However, Moore argues simultaneously, the Fed’s decision to raise rates is a crackerjack scheme aimed at driving the economy into a recession.

And again, Moore himself has said he doesn’t even know exactly what the Fed does.

This is alarming.

I don’t care how anybody feels about President Trump. Love him. Hate him. I don’t care.

But appointing an ignorant sycophant like Stephen Moore to the Federal Reserve board is a terrible idea. It erodes what little credibility the central bank had left and it endangers the economy only to ensure that President Trump’s political interests are represented.

It’s a move that’s designed for one purpose alone: To keep stocks rising as we head into the 2020 election.

So here’s what I’d suggest: Buy gold.

If the Fed wasn’t already on the path to slashing rates back down, it will be now.

The dollar is a liability at this point.

That’s why gold is already starting to rebound, and when investors catch on, it’s going to spike.

There’s even a possibility gold prices could shoot as high as $9,500 per ounce.

And you can find out more about that here.

Fight on,

Jason Simpkins Signature

Jason Simpkins

follow basic@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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