President who is a Congress hooligan on the bond market.
After weeks of a chicken game with the world economy, having started a thoughtless tariff war More than 180 countriesDonald Trump blinked. On Wednesday, Trump announced a 90-day pause at many (though not all) of these tariffs. This gave the stock market a short respite from its sharp decline over the past few days. However, as soon as the reality that China was still a rigid tariff became clear, the market attacked the next day.
Good news is that even as the uncertainty continues to sort through the global economy, the boundaries of Trump to specific sabotage global trade become clear. The bad news is that these restrictions are not imposed by a democratically elected body that has constitutional power to check the dangerous president – and the legal powers at the tariffs: Congress. In fact, Congress became even more irresponsible and cowardly, grabbing Trump and irresponsibly conveyed his tariff powers to the executive power.
In April, the budget resolution (which supported Chuck Sumer and nine other Democrats in the Senate), Congress is clearly abandoned the ability to stop the emergency power A declaration that signs Trump’s tariff policy. The budget resolution adopted by the House on Thursday was further. Like Sahil Kupar with NBC NEWS report On Wednesday: “Republicans’ chambers have drawn the language into the budget (resolution)” Rule “that prohibits the voting house to stop Trump’s extraordinary declaration used to introduce tariffs … The legislators who vote for it officially refuse their forces to recall their tariffs by October.”
As I noted in the previous columnThe tariff crisis is also a constitutional crisis. Constitutional powers are also constitutional duties. Congress, with the same revival of responsibility that made them convey responsibility for the commander -in -chief, now gave its responsibility for setting the tariffs, which further expanded the possibilities of the imperial presidency. Centralization of the authorities in the Oval Office is bad enough when the president is a hungry year like Nixon or George W., but even more catastrophic when the CEO is imperial in the sense of having the nature of such a crazy emperor as Nero or Caligula. Nero, as they say, stuck while Rome burned down. How much worse – Trump which dance During the lighting of the world on fire.
To the extent that the arson, which took place, was dushed from some of his incendiary activities, this is not due to the proper constitutional and democratic actions of the Congress, but by the actions of the ultra-establishments. Wall -Rate played a role not only in the origin of the stock market, but also the lobbying of the White House and Trump’s GOP allies. But much more important was the interference of bond owners who began selling Treasury bonds with a tariff, which could easily enlist the economic crisis for an order of depression. It should be remembered that bond owners are predominantly an economic elite – much more than in the stock market. While the stock market is unlikely to be a democratic institution, retirement funds give the majority a certain share of shares. On the contrary, the 2016 report find The fact that only 1.3 percent of the population is almost all rich – they just participate in the bond market.
Initially, the secretary of the Treasury Scott Baby and the Secretary of Trade Howard Lutnitsa advertise the possibility that the correction of the stock market will lead to more money in Treasury bonds, which will help the US government fight its debt, allowing to reduce rates. Suddenly there was a departure from the Treasury bonds. As Vilian D. Kohan Sharak explains:
On Monday, the 10-year Treasury supported from 3.89 percent to approximately 4.12-6-percent step in one day, and a clear signal that bond investors are very nervous about what the hell is in the White House. On Tuesday, it backed up even more, up to 4.25 percent – 9 percent for two days. By Wednesday, the 10-year-old Treasury gave 4.54 percent. (After Trump announced a 90-day pause, yields slightly decreased to 4.4 percent; I am sure he hoped for more.)
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In its meaning Graph On Monday, the historian of Colombian University Adam Tasu, who wondered about economic crises, posted the script Where the Treasury Bonds can lead to a broader economic crisis:
What if the liquidity does not cool panic? What if investors, both American and foreign, decide that they no longer want to attach their wagon to the mad king’s empire? What if they decided that the US is really exceptional, but what is extremely unpleasant? What to do if the report in the UK Telegraph is more than just rumors and German leaders are seriously considering pulling out the remaining gold reserves from the USDue to Trump’s risk? Well, in this case, the billions of dollars created by the Fed does not give you the safety you want.
So you sell dollars. You just want from a crazy house.
This, houses and gentlemen, would be a really big catastrophe. This would be sale not only from US shares. Not only us are fixed profits. But from dollar assets conducts trial. This would be a long declared crisis of the dollar.
While Tooze called this scenario “unlikely”, panic on Tuesday and Wednesday assumes at least the start of the nightmare crisis. That’s why Trump blinked. Having explained on Wednesday its 90-day pause, Trump – told reporters:
“Well, I think people jumped out a little out of line. They got the IPI … The bond market is very difficult. I looked it. But if you look at it now, it’s beautiful. The bond market is now beautiful. But, I saw last night, where people got misery.”
Certainly, Trump is not the first president to learn the difficult path that financial capital calls shots. In 1994, Bill Clinton quoted at Bob Woodward book Agenda start“You mean to tell me that the success of the program and has re -election depending on the federal reserve and a bunch of fucking traders?” In the same book Advisor Clinton James Carville quotes the memory: “I used to think that if it were reincarnation, I wanted to return as a president or pope or as a baseball attacker .400. But now I would like to return as a bond market. You can intimidate everyone.”
As powerful as bond traders, they are now even stronger. They were authorized both Trump (whose ill -advised policy gives them even more impact on the US government) and underwater congress. After all, this should not be the work of bond traders to hold the president out of control. This is the duty of Congress, but this August body went to Awol. The shameful force of the bonds did not need more power. But they have it now.
