Who Can Win The Federal Reserve And Trump? Brewing The Next Crisis

Although the US economy has been recovering continuously since the outbreak of the financial crisis in 2008, the negative impact of this financial disaster on the global economic development continues to this day.

Many international organizations and banks have published a number of articles to analyze the causes of financial crisis, which are weakening the responsibility of the Federal Reserve in this financial disaster.

Now, President Trump has just taken office. The joint action appears to be a preview of the possible conflict between the Federal Reserve and the US government in the future.

In this contest, who can win the Federal Reserve and Trump?

Most of the institutions that support globalization believe that Trump inherited a thriving US economy and that the economic recovery was due to the Obama administration.

But this view is biased, because many basic indicators of economic development have declined since the financial crisis in 2008, even though the Fed has been printing large amounts of money since then.

Some economists believe that because of the failure of the Fed's monetary policy choices, the US economy has started brewing the next crisis years ago.

If the US economy again has problems in the future, Trump will become the first object of public and media criticism.

But in fact, the Fed is not totally innocent, but should be responsible for many economic problems.

Recently, many mainstream media in the United States and those supporting liberalization have begun to widely praise the achievements made by the Federal Reserve in promoting the recovery of the US economy.

At the same time, these institutions scoffed at Trump's efforts to revoke the Dodd Frank act.

Although Trump believes that the Dodd Frank act has led many large banks to freeze loans, it is also considered to be a disguise for the interests of giants.

If the Fed does not talk about it, the Fed's contribution to the US economic recovery is also very limited.

Although the scale of American commercial loans is increasing, the scale of loans for small businesses is not as large as that of the Fed.

Since the implementation of the Dodd Frank act, the scale of small business loans has fallen by more than 6%.

In Chicago, the size of loans granted to small businesses in the community has fallen by 49% since 2008.

Yellen, chairman of the Federal Reserve, said in 2015 that the scale of small business loans continued to decline because small business owners no longer wanted to apply for loans.

But analysts say this is like saying that the 95 million unemployed Americans are ridiculous because they do not want to work and are not counted as unemployed.

Such remarks only attempt to divert public attention while concealment the fundamental problems of the US economy.

Therefore, in the contest of propaganda, Trump called the United States small.

There is a big difference between the scale and the growth of personal loan scale, rather than that giant enterprises and banks do not get enough loan support.

The Fed and the mainstream media in the United States tried to refute Trump's argument on the growth stagnation of small business loans through the growth of US commercial loans.

In fact, large enterprises and banks in the United States have already received large amounts of loan resources. A large part of this is due to the relaxed Federal Reserve.

And printing money in large quantities.

According to the audit results of the Troubled Asset Relief Program, enterprises received a total of $16 trillion in loan support.

Meanwhile, over the past few years, many companies have bought large shares through low-cost loans to boost the US stock market.

Once the Fed begins to raise interest rates, stock repurchases will also decrease rapidly, which is a big disadvantage for stock investors.

Fisher, chairman of the Dallas fed, has said that since 2009,

A large quantity of ammunition was provided for the sharp rise in the stock market.

So, after the Federal Reserve announced the rate hike in December 2015, almost all stock index began to fall.

Considering the high valuation of the stock market, the callback from 10% to 20% is not surprising.

The problem is not whether banks are lending, they are lending, but these loans are not delivered to the most needed groups.

The Federal Reserve's loose monetary policy has opened up the era of a large number of cheap loans, but this policy can only bring limited benefits in the short term.

In this way, the US stock market is inevitable, and the Federal Reserve is only looking for a scapegoat.

Previously, the Dodd Frank act was launched to avoid the collapse of the financial market, mainly to control the scale of financial derivatives.

But now that these big banks have received more than $476 billion in aid, they are still trading large quantities of financial derivatives.

Therefore, the Dodd Frank act did not achieve the original goal, which was intended to divert public attention.

Ultimately, the focus of this contest is not the abolition of the Dodd Frank act, but the impression that Trump's policy is not effective.

Otherwise, if the US economy falls into crisis again, Trump and his conservative supporters will be scapegoats for the economic crisis.

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