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
5 - No Easy Way Out: Trump’s role in the impending crash
With the
roots of the next crisis established prior to Trump’s assumption of
the presidency, combined with the ineffectiveness of post-2008
regulations, the Trump administration faces an uphill battle —
especially if the next crisis takes place during the next four years.
All of the news coverage and comments from prominent figures in the
financial establishment once again seem to be shifting the blame from
central bank policy to Trump’s review of banking regulations,
suggesting that the financial elite’s scapegoat for the next crisis
has already been selected.
Schiff said
the financial establishment “will try to pretend that everything
else was great under Obama and then act like Trump ruined it.”
This isn’t
to say that Trump’s potential removal of banking regulations won’t
exacerbate or speed up the onset of the coming crisis. James Rickards
told MarketWatch it’s likely that a crisis can only be prevented by
reinstating the Glass-Steagall Act, which separated investment and
commercial banking, breaking up the big banks, banning most
derivatives, and enacting tougher law enforcement of bank wrongdoing.
But considering the makeup of his Cabinet and team of economic
advisors, Trump is unlikely to push for any of these changes.
Writing for
the Libertarian Institute in November, Eric Schuler noted, “The
next recession is likely to commence during Trump’s tenure. But
while he may prove to be an unwitting catalyst of the next crisis,
his policies will not be the primary cause.”
Instead,
Trump is more likely to focus on loosening existing banking
regulations than imposing any new ones. Though they do not account
for the root cause of the crisis, the president’s actions in this
regard could potentially accelerate the bursting of the bubble.
However, this is difficult to gauge due to the fact that this new,
looming crisis is long overdue.
Trump is
ultimately faced with no easy choices. He can either allow the Fed to
further inflate the bubble or he can try to bring about a market
correction by forcing interest rates to increase in order to
establish the foundations for positive economic growth. Both
possibilities promise to bring unemployment and economic difficulties
for the average American – particularly in the short term.
Regardless of how Trump proceeds, he is likely to encounter major
conflicts in fulfilling his campaign promise to “Make America Great
Again,” as any major economic downturn could potentially lead to
widespread, popular unrest throughout the nation.
Trump can
either “bite the bullet” now if he really wants to improve the
American economy, Schiff said, or he can “kick the can down the
road” like his predecessors have.
Even if
Trump chooses to delay the inevitable, the next crisis, already long
delayed, is increasingly likely to unfold regardless of any action
the president may take. And that crisis is likely to define his
presidency.
***
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