Trade war or not New York bankers will have it their way

President Donald Trump is seen at his desk in the Oval Office. Sometimes he works hard, for the…bankers. (Official White House Photo by Shealah Craighead)

The US and China agreed to hold talks on 7-8 January in Beijing to settle their trade differences, which have already eaten into both economies and disturb the global financial universe. If they fail to agree this week, the impact will be worse. It seems things are so bad, that the US Federal Reserve Chairman Jerome Powell was forced to back down from his long term plans to further raise Fed’s interest rates.

According to Reuters, he said “the Fed would be flexible in deciding future interest rate hikes, balancing the steady flow of strong economic data against an array of risks, from slowing global growth to worries about trade, that have spooked investors”. Before discussing the Chino-American trade war, let’s dig a bit into the American monetary developments.

Powell changes course

Right from his nomination as Fed Chairman, Powell has been defending the need for more interest rates hikes because of the “steady flow of strong economic data”. This reality may lead to strong inflation pressures. Nevertheless, last Friday, he bowed before the screams of ‘investors’ and left it to be understood he will “be patient” with Fed’s monetary policy, signalling a hold of interest rates increases. Actually, he went as far as to say “We are always prepared to shift the stance of policy and to shift it significantly, if needed”. This means instead of increases the Fed may launch rate cuts.

Clearly, it was the mammoth New York banks, who forced Powell to think twice before making them pay a bit higher interest on around $4 trillion the Fed has pumped into the banking system (it should have been real loans if the banks paid any noticeable interest rate for that). Even worse, the banks now demand that the Fed even lowers its 2.25% rate. For years – from 2008 to 2016 – this rate had been flat zero, to ‘help’ the banks recuperate from the financial meltdown their insatiable greed for money had inflicted upon the real economy.

Again it’s the banks

Yes, the New York banks feed on other people’s money. Last Friday 4 January, just the possibility of lower or at least steady Fed interest rates sent the S&P and the Dow Jones – the Wall Street stock market main indexes – to the sky up by 3.43% and 3.29% respectively. The Fed’s money is American people’s money which the major US banks get for free or for a token interest rate. Then, they lend it at interest rates averaging of more than 10%, making huge profits without sweating or any proper risk taking. If they fail, the taxpayers will certainly bail them out.

This is exactly what happened in 2008 and will happen again soon. Free or cheap money in the hands of bankers still continues being ‘invested’ in all and every grey derivative or high risk markets. For example, Turkey pays the New York bankers 14% on dollar loans. However, the country may not be able to continue doing so in the future. Then, it will be the US taxpayers who will undertake the burden to save the imprudent bankers, acting as their insurer of last resort. No charge for that whatsoever.

Trump backs bankers

Of course, the banks are not alone in exploiting the real economy and the real people. The impossible ‘America First’ President, Donald Trump is spearheading the bankers fight against Jerome Powell’s efforts to get something back, from what the Fed has freely given them. The White House has repeatedly attacked Powell for continuing to apply the absolute necessary monetary measures which his predecessor Fed head Janet Yellen introduced in 2016.

Trump has repeatedly threatened to fire the Fed Chairman and now the White House war against him has started paying…dividends for bankers. So, last Friday Powell finally accepted to back down from his own policy choices and succumbed to the demands of bankers and Trump for cheaper money.

The Wall St. sharks

The political harlequin of Washington D.C., who promised the ‘left behind’ Americans to actively work for them, is now doing whatever he can to support the major US banks and the Wall Street sharks to continue feeding on the real American economy. At the same time, Trump’s unprecedented trade attacks, mainly against China, have started affecting the real US economy. This brings us to the meeting point of global trade grievances and the Fed’s interest rates.

For weeks, even months, the New York Stock Exchange has been plummeting, with the Wall Street magnates blaming global trade troubles. Last Friday, however, a Powell statement, announced preparedness for a significant shift in monetary policy. This means cheaper charges for the $4 trillion banks have got from the Fed. That’s why the NYSE partied. As noted above, S&P rose by 3.43% and the Dow by 3.29% celebrating the new era of cheaper money.

The trade wars

This is all the banking sharks care about; pocketing Fed’s money, that is, American people’s money, cheaply or even free of charge. They don’t care if Trump’s trade attacks against China have started eating into the US real economy. Theirs is the financial universe preying on the same real economy. Their ‘earnings’ stem not from labor or industry or risk taking of any kind, but rather from their sovereign grip and absolute control of whatever has to do with money. Actually, they create their own money, piles of it.

In conclusion, the NYSE and mammoth banks don’t care if a real trade war erupts with China or the European Union, as long as it doesn’t touch their ability to feed on other people’s money. Trump does his best in this direction, possibly not without important personal gains. Trade war or not, the New York bankers will have what they want.

 

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

FROM THE FIELD: India’s plastic waste revolution

Integration of migrants: Commission launches a public consultation and call for an expert group on the views of migrants

Human rights: breaches in Russia, the Rakhine State and Bahrain

How upskilling could help cities rebuild after Coronavirus

EntEx Organises 5 Summer Schools for Young Entrepreneurs across Europe in June/July 2014

The female struggle in the face of medical devaluation

‘The welfare of the Libyan people’ the UN’s sole agenda for the country, says Guterres in Tripoli

Dare to be vulnerable, and three other lessons in leadership

How businesses can create an ethical culture in the age of tech

The challenge to be a good healthcare professional

Act now to prevent Desert Locust catastrophe in Horn of Africa: UN agencies

The most unlikely innovators are changing ICT for development – it’s time we took notice

What is environmental racism?

Climate change: cutting the good by the root?

Guterres condemns killing of Bangladeshi peacekeeper in South Sudan, during armed attack on UN convoy

Venezuela’s needs ‘significant and growing’ UN humanitarian chief warns Security Council, as ‘unparalleled’ exodus continues

More than speed: 5G could become the next big economic driver

Asylum: more solidarity among EU member states and funds for frontline countries

European Commission requests that Italy presents a revised draft budgetary plan for 2019

Greener tourism: Greater collaboration needed to tackle rising emissions

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

Europe, US and Russia haggle over Ukraine’s convulsing body; Russians and Americans press on for an all out civil war

The “Colombo Declaration” adopted at the World Conference on Youth 2014

IMF: World cup and productivity

Cameron postpones speech in Holland

‘Great cause of concern’ UN chief tells Security Council, surveying ‘bleak’ state of civilian protection

1.1 billion people still lack electricity. This could be the solution

5 leadership lessons I learned from doing my own ‘undercover boss’

If we want to solve climate change, water governance is our blueprint

The World Health Organization has called on countries to ‘test, test, test’ for coronavirus – this is why

EU budget: Commission helps prepare new Cohesion programmes with Regional Competitiveness Index and Eurobarometer

Catalonia secessionist leader takes Flemish ‘cover’; Spain risks more jingoist violence

Marriage equality boosted employment of both partners in US gay and lesbian couples

Europe had a record year for Measles – and it’s partly down to anti-vaccine campaigners

From Policy to Reality: Discrepancies in Universal Health Care Systems across the EU

AI looks set to disrupt the established world order. Here’s how

Early healthcare investment is our best chance at healthy ageing

The EU sides with China against the US; but has Germany capitulated to America?

Preserving biodiversity vital to reverse tide of climate change, UN stresses on International Day

Educate children in their mother tongue, urges UN rights expert

Russia and the West to partition Ukraine?

GDPR and the World Cup have these 4 things in common

Your chocolate can help save the planet. Here’s how

ECB embarks on the risky trip to Eurozone banking universe

New rules to help consumers join forces to seek compensation

Thinking like Leonardo da Vinci will help children tackle climate change

Parliament approves EU rules requiring life-saving technologies in vehicles

World Bank downgrades global growth forecasts, poorest countries hardest hit

What we need is more (and better) multilateralism, not less

International Women’s Day 2019: more equality, but change is too slow

How to fix our planet: the pioneers fighting to bring nature back

How China Mended My Heart

Children are forgetting the names for plants and animals

Labels for tyres: deal for greener and safer road transport

Commission presents its response to Antisemitism and a survey showing Antisemitism is on the rise in the EU

The Ecofin deceives the SMEs with the EIB €10bn capital increase

Consumers suffer three defeats

Sexual exploitation and abuse: latest UN quarterly update

The economic effects of the COVID-19 coronavirus around the world

New VAT rules in the EU: how a digital sea could have become an ocean

More Stings?

Trackbacks

  1. […] Continue reading full story: Trade war or not New York bankers will have it their way […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s