JEFF CHILDERS HAS A TAKE ON THE POWELL REFUSAL TO LOWER RATES ISSUE…IT’S SO SIMPLE …I THINK HE’S RIGHT<\/p>\n
I AM READY TO DISCOUNT THE COMPLEX CONVOLUTED LUONGO THEORY…FOR THIS SIMPLE ONE<\/p>\n
OCCAM’S RAZOR SAYS THE MOST SIMPLE EXPLANATION IS USUALLY THE RIGHT ONE<\/p>\n
……………….<\/p>\n
The Times, on some kind of a roll, continued yesterday\u2019s news feast with an article headlined, \u201cTrump Steps Up Pressure Campaign on Powell With Handwritten Note.\u201d That\u2019s one way to put it. It was classic Trump. He\u2019s getting ready to do something.<\/p>\n
CLIP: Press Sec Leavitt shows reporters Trump\u2019s \u2018handwritten note\u2019 to Fed Chair Jerome Powell (0:58).<\/p>\n
https:\/\/x.com\/KarluskaP\/status\/1939737719673889107?<\/a><\/p>\n If ever there were a subject that blog authors avoid like the plague, a subject so mind-numbingly horrifying it sends readers fleeing for the cognitive safety of Dilbert cartoons and TikTok cat videos, that subject is interest rates on bonds. My fingers twitched nervelessly even as I typed those words in sheer authorial terror.<\/p>\n Here, with an uncontrollable shudder, are the basics. We, meaning Uncle Sam (with only our very best interests at heart), borrow money from foreigners by selling them \u201cbonds,\u201d which are like carnival coupons for future Florida Everglades oil revenues. There are all types of bonds, limited only by the demented imaginations of bankers and financial experts, the same ones who dreamed up the no-job-needed mortgage crisis of the aughts. But I digress.<\/p>\n We sell a lot of bonds, by paying investors interest. A lot of interest. The higher the interest rate, the more we pay. Billions. Trillions. The sky is the limit.<\/p>\n Now that President Trump has heroically wrestled the Biden recession under control, he wants the Federal Reserve to lower the price \u2014the interest rate\u2014 that the country pays investors who buy our bonds. But Fed Chair Jerome \u201cSnidely Whiplash\u201d Powell says nyet.<\/p>\n Powell claims we aren\u2019t yet out of the financial woods, so he\u2019s just playing it safe.<\/p>\n Delving into the details requires entering a Lovecraftian world of ten-syllable financial buzzwords and word salad so deliberately obscure that even international chessmasters quake when they see the vocabulary list. Every commonsense objection to lowering or raising rates is met by an equal and opposite response of incomprehensible gobbledegook, meant to make us feel like morons and simply sit down and let the experts do their work.<\/p>\n They can\u2019t just say, \u201cwe\u2019re keeping rates high.\u201d No, no. Instead, they: \u201cmaintain a restrictive policy stance to ensure inflation expectations remain well-anchored relative to the dual mandate under conditions of asymmetric labor market slack.\u201d They don\u2019t just talk about borrowing costs\u2014 it\u2019s \u201cterm premiums,\u201d \u201cyield curve inversions,\u201d and \u201cnonlinear transmission effects in the neutral rate regime.\u201d Powell whispers arcane incantations like \u201creal rates adjusted for forward guidance uncertainty within a confidence-weighted Taylor Rule\u201d that magically summon a dozen economists and two minor demons from the CBO.<\/p>\n These people never explain anything. They just obfuscate until the Blackhawks come home, piling on more and more incomprehensible gibberish until stroke-like symptoms appear in their victims, when they finally move on.<\/p>\n ? But there is a much simpler lens that lasers right through all the sulphuric smoke.<\/p>\n During Biden\u2019s entire term, Powell kept rates pinned to near zero, through record inflation, multi-trillion-dollar Biden spending sprees, and a labor market tighter than a native drum because, we were told, \u201cinflation expectations remained well anchored.\u201d They literally denied inflation was even happening.<\/p>\n But then \u2014poof!\u2014 with a new incantation, right after voters handed Trump a historic win in November 2024, the Fed suddenly rediscovered the lost country of inflation, and suddenly became a prudish paragon of restraint. All the high interest rates the Fed has so carefully and primly calculated as absolutely necessary came after the November 7th election.<\/p>\n It\u2019s almost like Powell kept a framed photo of Biden on his desk labeled \u201cIn Case of Progressive Agenda Threat, Break Glass Ceiling.\u201d Rates stayed flatter than NPR\u2019s ratings curve until the very moment Trump clawed his way back into the Oval Office. Suddenly, the Fed \u201cremembered its mandate,\u201d strapped on its fiscal chastity belt, and began fanning itself about financial overheating. Weird!<\/p>\n While serving Biden, it was spend, print, repeat. Powell played along like a cocktail pianist on the deck of the Titanic. But under Trump\u2019s deregulation, growth, and tax reform, suddenly the Fed transformed into the ghost of Andrew Mellon, sternly warning that the economy must be disciplined, lest it enjoy itself too much.<\/p>\n Jerome, nobody is buying it.<\/p>\n The pi\u00e8ce de r\u00e9sistance of this monetary opera was unveiled yesterday when Press Secretary Karoline Leavitt, barely suppressing a smirk, held up a piece of paper like it was the Zapruder film. On it appeared a printed list of global bond rates, ranked from lowest to highest \u2014Switzerland, Japan, China, even Russia\u2014 which are all paying less on their national debt than the United States.<\/p>\n And in the corner, like a note passed in study hall, Trump\u2019s unmistakable handwriting: \u201cJerome \u2014 you are, as usual, too late. You have cost the USA a fortune. You should lower the rate \u2014 by a lot.\u201d The underlying point was brutally effective: Why is the strongest economy in the world paying more to borrow than countries with capital controls, censorship, and exchange rates backed by slave labor and violence?<\/p>\n Of course, it wasn\u2019t intended to be a message to Chairman Powell. I read Trump\u2019s note as a classic Trumpian chess move, to pave the way for political possibility: removing the Fed Chair, something no president has ever tried, though many have pined for the opportunity.<\/p>\n ? Powell is standing on thin political ice. An appeals court recently upheld (for now) Trump\u2019s removal of the Director of the inaptly named Institute for Peace, another supposedly \u201cindependent\u201d agency created by Congress.<\/p>\n The legal logic is the same: if agencies exercising executive power answer to no one, who\u2019s really running the country? The courts, now stocked with Trump-era judges who understand the assignment, have started to shift away from the old gospel of sacred institutional independence toward something more grounded\u2014 like democratic accountability.<\/p>\n If the President must answer to voters for the economy, why should a Fed Chair get to derail the whole train while citing \u201cmarket expectations\u201d in a dialect even judges can\u2019t understand? The era of unabashed deferral to unelected experts is over.<\/p>\n The Fed doesn\u2019t get to play shadow government anymore\u2014 insulated from consequence, immune from accountability, and cloaked in a fog of jargon so thick you\u2019d need a hedge fund intern and an exorcist to translate. The days when \u201cbecause markets\u201d was a complete sentence are gone. Trump\u2019s handwritten note wasn\u2019t just a jab at Powell\u2014 it was a shot across the bow of the entire technocratic class that has run U.S. fiscal policy like an invitation-only country club for the last thirty years.<\/p>\n When the people elect a president who wants to cut rates, create growth, and unshackle the economy, the Fed doesn\u2019t get to veto that from behind frosted glass. Not anymore. Not after covid. Not after inflation. Not after the American public watched in real time as expert after expert confidently delivered disaster.<\/p>\n \u201cIndependence\u201d is not a blank check. Not anymore.<\/p>\n And if Powell thinks he can hike his way into historical sainthood while the rest of the world is trying to breathe again, he shall soon find out what real accountability looks like. Stay tuned.<\/p>\n …………..<\/p>\n I am convinced Jeff Childers has a conduit to the White House . <\/p>\n He is Brilliant but he cannot keep Breaking these kinds of theories without some “Intel” IMHO<\/p>\n","protected":false},"excerpt":{"rendered":" JEFF CHILDERS HAS A TAKE ON THE POWELL REFUSAL TO LOWER RATES ISSUE…IT’S SO SIMPLE …I THINK HE’S RIGHT I AM READY TO DISCOUNT THE COMPLEX CONVOLUTED LUONGO THEORY…FOR THIS SIMPLE ONE OCCAM’S RAZOR SAYS THE MOST SIMPLE EXPLANATION IS … Continue reading