Trump
can either ‘bite the bullet’ now if he really wants to improve
the American economy or he can ‘kick the can down the road’ like
his predecessors have, noted financial commentator Peter Schiff tells
MintPress.
by
Whitney Webb
Part
2 - Trump vs. the financial establishment
Trump has
long made his disdain for the Dodd-Frank Wall Street Reform and
Consumer Protection Act public knowledge, recently announcing his
intentions to “do a number” on the bill and promising to loosen a
large part of the restrictions it put into place. Immediately,
members of the neoliberal political and financial establishment
lashed out, arguing that Trump’s potential deregulation will
directly cause another financial crisis.
Reuters
reported that Mario Draghi, president of the European Central Bank
and former vice chairman and managing director of Goldman Sachs
International, argued during a Feb. 6 press conference that easing
banking rules and regulations was not just troublesome but dangerous.
He warned that doing so threatens the global economy’s “slow but
steady recovery” from the 2008 crisis.
Draghi’s
concerns were echoed by other prominent bankers in Europe, including
Andreas Dombret, a board member of Germany’s powerful central bank,
Bundesbank, who said that weakening or removing regulations would be
a “big mistake” that would create a new economic crisis.
Major media
outlets have followed this narrative with headlines like “How
Donald Trump could create a financial crisis,” “Is
President Trump about to unleash another financial crisis?” and
“Why Donald Trump’s financial policy could recreate a 2008
crisis scenario.” These reports similarly point to Trump’s
plan to lift or weaken Dodd-Frank regulations as a likely instigator
of a coming crisis. Even Barney Frank, one of the bill’s
co-authors, has said as much.
Yet Trump
and his advisors hold a starkly different view of the situation,
arguing that Dodd-Frank’s regulations are holding the economy back
— a fact that Frank admitted last year when he called key elements
of the bill “mistakes.”
While
Trump’s plan to loosen regulations has been labeled a catalyst for
another financial crisis, the Trump administration has taken to
blaming central banks and their manipulation of interest rates and
the money supply as major factors leading to economic instability. In
addition, Trump’s chief trade advisor, Peter Navarro, recently
accused Germany of currency manipulation, arguing that the country
uses the euro to “exploit” the United States and European Union.
He told the Financial Times that Germany’s trade surplus was due to
the nation’s exploitation of the euro being “grossly
undervalued.” Draghi, during his most recent press conference,
rejected these claims outright, saying, “We are not currency
manipulators.”
Aside from
the partisan rhetoric, there remains little doubt on either side that
another massive financial crisis is on the horizon. For instance,
James Rickards, an economist who advises the Department of Defense
and U.S. intelligence community, told MarketWatch: “[T]he crisis
is coming and the time to prepare is now. It could happen in 2018,
2019, or it could happen tomorrow. The conditions for collapse are
all in place.”
Other big
names in economics, such as Martin Wolf of the Financial Times, have
voiced similar concerns, arguing that another financial crisis is
“inevitable.”
Even Alan
Greenspan, the former chairman of the Federal Reserve, warned in 2009
that “the [2008] crisis will happen again but it will be
different.” Trump himself expressed these same concerns in an
interview with the conservative news site Newsmax in 2011, telling
Americans to prepare for “financial ruin” resulting from
the massive national debt and overall weak economy.
With such a
massive crisis looming, it’s clear that Dodd-Frank, at the very
least, has fallen quite short of its stated mission of preventing
another economic calamity. This leads to an important question: What
has brought us to this point — the weakness of Dodd-Frank or the
policy of central banks?
Source,
links, videos:
http://www.mintpressnews.com/making-america-broke-again-trump-the-inevitable-financial-crisis/224950/
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