Hey Trump - *End the Fed*. Please. It's Killing Oil & Gas.

Interest Rate Hike Hits Oil Hard

Oil prices have been slammed over the past week, dragged down by a variety of forces, including soaring U.S. shale production, higher-than-expected output from Russia, and worries about global demand. On Wednesday, the U.S. Federal Reserve decided to pile on.

The central bank hiked interest rates by a quarter-point yet again, the fourth time this year. That was largely expected. But the details that market watchers were more concerned with were the Fed’s intentions for 2019. Fed chairman Jerome Powell, in the face of withering pressure from the White House, signaled his intention to hike rates two more times in 2019. To be sure, that was down from a previous plan of three rate increases, but it wasn’t exactly the pullback that President Trump had wanted. Powell dismissed questions about political pressure from the President, saying that “nothing will cause us to deviate from” the job at hand.

... It’s hard to overstate the influence that the Federal Reserve has over the global economy. The rate tightening impacts the macroeconomic outlook of most countries while also affecting prices over everyday items for billions of people.

... The hawkish approach from the central bank has created a series of forces that could negatively impact crude oil. First, oil is priced in dollars, so to the extent that interest rate hikes strengthen the dollar, they push down the price of oil. Second, a stronger dollar means that global investors are pulling their money out of other currencies and pivoting into the dollar. In other words, rate hikes put downward pressure on other currencies.

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Alternative to The Fed, proposed during the U.S. 108th Congress (2004 - 2005).  Supposedly, Trump is considering implementing some of the NESARA proposal, to curb The Federal Reserve.

nesara.pdf

NESARA

The National Economic Stabilization and Recovery Act

Executive Summary

Monetary Policy Reform

• Establishes three types of United States currency: standard silver coin, standard gold coin and treasury credit-notes (restores Constitutional currency)

• The United States Treasury buys and cancels all outstanding capital stock of the former Federal Reserve Banks

• The privately owned Federal Reserve System becomes a public entity, the United States Treasury Reserve System

• A new Board of Governors of the Treasury Reserve System uses a specific law-mandated plan to maintain and stabilize the exchange value of the currency

• The new Board assumes all powers and responsibilities of the former Federal Open Market Committee

• The existing regional Federal Reserve Banks become Treasury Reserve Banks and continue clearinghouse operations and other bank service functions under the direction of the Office of the Comptroller of the Currency

• All commercial banks must exchange their income-producing government obligations for treasury credit-notes (reduces the national debt)

• Only treasury credit-notes may be held as bank reserves

• Fundamental changes are imposed on the repayment of all outstanding fractional reserve loans on secured property—principal must be repaid before the monetizing-fee is paid (applies retroactively to existing mortgages reducing private debt)

• A progressive federal excise tax is imposed on the privilege of making commercial loans of currency for profit

• Commercial financial institutions such as credit unions are provided, subject to some restriction, with opportunities to operate with fractional reserves

Fiscal Policy Reform

• Amends the existing federal income tax system

• A national retail sales (excise) tax is imposed upon non-exempt retail activities of commerce (21 categories of exemptions covering most necessities of life)

• The Internal Revenue Service is reorganized as the National Tax Service to administer the collection of the new tax

What NESARA Does Not Immediately Do

• Eliminate all payroll taxes, such as Social Security and Medicare taxes

• Eliminate constitutional excise taxes on regulated activities

• Immediately eliminate the entire national debt

• Immediately halt inflation (the economy needs some response time before inflation will disappear)

 

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Trump could fire Powell, but given the way things have gone the last few days, I'm not sure he knows how.

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