CBS: Are the Fed’s Trumpflation fears misplaced?


Last month, the US Federal Reserve raised interest rates and stated that it intended to raise them at least three more times in 2017. Here is a report from CBS:

Are the Fed’s Trumpflation fears misplaced?

January 6, 2017

The Federal Reserve, after years of coming up with any and every excuse to keep monetary policy as loose as possible, has suddenly turned hawkish.

Last month, it raised interest rates for only the second time this cycle. It penciled in three more quarter-point hikes in 2017. And on Wednesday, with the release of the Fed’s latest meeting minutes, we learned policymakers are concerned the fiscally stimulative policies of President-elect Donald Trump could necessitate a more rapid pace of rate hikes in the new year and beyond.

Yet investors, based on futures market pricing, believe the Fed is overly concerned and that the risk of “Trumpflation” is actually lower than Fed Chair Janet Yellen and her cohorts fear. …

Traders believe the Fed is being overly sensitive, and they’re pricing in only two quarter-point hikes for the year, one around June and another in September.

For one, not all economists are convinced Trump’s policies — should they be implemented — will actually prove inflationary. Gluskin Sheff’s David Rosenberg doesn’t believe so, and he has a list of reasons:

  • Deregulation and lower corporate taxes will reduce business costs, protecting profit margins even if wages rise.
  • Infrastructure spending, if done right, should boost currently stagnant labor productivity and thus reduce unit labor costs.
  • Mr. Trump’s win has boosted long-term interest rates — on higher inflation and GDP growth projections — which is weighing on real estate prices.
  • Heavy holiday-season discounting in the retail sector has continued, suggesting consumers are more miserly than they seem.
  • The U.S. dollar’s recent surge will reduce commodity and import prices.
  • Bank credit creation and money velocity is slowing — both antecedents of inflation — suggesting higher interest rates are slowing the money markets.
  • And survey data show only 3 percent of small businesses see inflation as a major problem.

Another possible reason to believe the Fed will be more cautious in its rate hike tempo this year is the risk of political blowback. On the campaign trail, Mr. Trump accused Yellen of artificially holding interest rates down to help President Obama, and he warned that when Obama leaves she’ll raise rates and tank the stock market.

You can be sure that if Yellen’s Fed maintains its newly hawkish stance, Mr. Trump will notice and call attention to it.

Here is some information related to this that came out last year from Daily Reckoning (the source of the photo at the beginning of this post):

“Right now the world economy is on a knife edge,” says Jim Rickards.

“Extreme inflation and deflation scenarios are equally probable depending on how Trump’s economic policies are implemented, and on the Fed’s policy reaction to those policies.”

Outlets have spilled a fair amount of digital ink in recent days on “Trumpflation” — the president-elect’s colossal public-works spending proposal that would put Uncle Sam ever deeper in hock, with the Fed simply printing “helicopter money” to cover the new debt.

“The Trump team,” Jim explains, “claims this spending can be financed with higher growth from his proposed tax cuts and his plans to reduce regulation.”

So we’re back to “supply side” economics and the “Laffer curve” — which tells us the deficit won’t blow out as long as long as economic growth is strong enough to generate more tax revenue.

But that didn’t work out so well the last time it was tried, during the presidency of Bush the Younger.  …We caution that Trumpflation is no sure thing. The Fed might assert a bit of independence after all. 11/18/16

Well, as mentioned in the CBS piece, the Federal Reserve has pushed in a direction away from Donald Trump the month after the above article was posted..

Notice something that Donald Trump said last May:

If interest rates go up one percent, that’s devastating. What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country. (Egan M. Donald Trump: ‘I’m the king of debt.’ CNN, May 7, 2016)

The rates Donald Trump was concerned about are not outrageously high. And the Federal Reserve has announced that it plans to raise a total of one percent, which Donald Trump says will be “devastating.” Part of what the Federal Reserve has done is political, and part should have been done earlier.

The USA is walking a dangerous line on its debt that will not end well.

Yet, that does not mean all will be bad concerning the economy of the USA.

There are some reasons to have some temporary optimism. Technological and other developments may temporarily support the U.S. economy—as can reductions of regulatory burdens.

Consider the following:

In Obama’s Final Jobs report, A Record 95.1 Million People Were Not In The Labor Force

January 6, 2017

Having so many people not productively contributing to the economy means many are available to contribute under certain circumstances.

Some policies of Donald Trump may help. The stock market in the U.S.A. responded favorably in the weeks after the election of Donald Trump. Various ones see his policies and his cabinet selections as a refreshing pro-business change that will fuel economic growth, investment, and prosperity.

For many years, I have written that because of improvements in various aspects of energy technology (some of which Donald Trump seems to support), the U.S.A. may experience even more of an energy export boom, such as with oil and natural gas, etc. that may prolong its days of economic prosperity.

But prolonging is likely all that is possible as its destruction is prophesied (Daniel 11:39; Habakkuk 2:6-8).

Notice what was told to a king whose was prophesied to lose his kingdom:

27 Therefore, O king, let my advice be acceptable to you; break off your sins by being righteous, and your iniquities by showing mercy to the poor. Perhaps there may be a lengthening of your prosperity. (cf. Daniel 4:27)

Repentance can prolong prosperity, but promotion of sin leads to destruction.

The debt of the USA (which Donald Trump’s policies will increase, at least initially) is more dangerous than he or the Federal Reserve realizes.

Around 605-625 B.C. Habakkuk wrote a short book of the Bible that has a lot of implications for the time that we are now in. Notice something that God said in it:

2 Then the Lord answered me and said: “Write the vision And make it plain on tablets, That he may run who reads it. 3 For the vision is yet for an appointed time; But at the end it will speak, and it will not lie. Though it tarries, wait for it; Because it will surely come, It will not tarry.  Habakkuk 2:2-3)

So what did Habakkuk see in this vision that is so bad people should run/flee who read it?

Notice that the prophecy that is being discussed is specifically for the appointed time of the end. It is a prophecy for our time–and will affect the proud. What will happen is so bad “That he may run who reads it.” What is so bad? Habakkuk continues with the following:

4 “Behold the proud, His soul is not upright in him; But the just shall live by his faith.
5 “Indeed, because he transgresses by wine,He is a proud man,And he does not stay at home. Because he enlarges his desire as hell, And he is like death, and cannot be satisfied, He gathers to himself all nations And heaps up for himself all peoples. 6 “Will not all these take up a proverb against him, And a taunting riddle against him, and say, ‘Woe to him who increases What is not his — how long? And to him who loads himself with many pledges’? 7 Will not your creditors rise up suddenly? Will they not awaken who oppress you? And you will become their booty. 8 Because you have plundered many nations, All the remnant of the people shall plunder you, Because of men’s blood And the violence of the land and the city, And of all who dwell in it. (Habakkuk 2:4-8)

Actually, with an admitted debt of nearly $20 trillion dollars and plans by President-elect Donald Trump to increase that much further, the USA has increased pledges more than any nation in the history of the planet.

It will end worse than any ‘Trumpflation’ scenario that I have yet read about.

Since the prophecy in Habakkuk 2 will be fulfilled at the time of the end (cf. “The message was true, but the appointed time was long…in the latter days, for the vision refers to many days yet to come”, Daniel 10:1,14). Daniel 8:19, 11:27,29,35 uses the same Hebrew term for “appointed time” as Habakkuk 2:3, while Daniel 10, using a different term, ties the latter days to the time in Daniel 8:19. Habakkuk 2 was not fulfilled in its entirety anciently.

I, personally, have taught the end time risks of Habakkuk 2 longer and in more detail than any living COG leader that I am aware of.

The time will come when the economy of the USA will be totally devastated and those who ignore Habakkuk’s warning will suffer because of it!

Some items of possibly related interest may include:

America’s Day of Reckoning 2017 Dollar Collapse? Economist James Dale Davidson says that a financial bloodbath will hit the USA and there is nothing that Washington can do to stop it. He claims that at least 57 nations have gotten together to dethrone the US dollar as the world’s reserve currency. He claims this can happen any day or in a few months. He mentions China, Russia, the AIIB, and gold. He claims his track record in predicting massive shifts in the past should assure people that he is right about this. He claims that there will be massive unemployment, near elimination of social security benefits, and more. Is James Dale Davidson possibly right on any of this? Dr. Thiel goes over many of his claims and explains what the Bible shows related to the coming collapse of the US dollar. This is a video.
Twelve ‘grey swan’ events to watch for in 2017? The Japanese financial firm Nomura put out a list of ‘ten grey swans’ events to look out for in 2017. Indirectly based upon ‘black swan’ theory, these are events that Nomura believes could greatly impact financial markets in 2017–some of which are related to the election of Donald Trump. Dr. Thiel expounds on each of these ten and adds two additional ones. What is a ‘grey swan’ and how may events in 2017 impact the future? What were two events in 2016 that look to have significant impact in 2017? Dr. Thiel brings out biblical prophecies that Nomura did not refer to so that you can better understand what will happen, as well as when certain events will not happen.
Collapse of the Euro and Dollar? War in 2020? Larry Edelson of Money and Markets described aspects of current economic difficulties and explained why he felt matters would get a lot worse. He said war, like World War III, could break out as early as 2020. What did he call the ‘granddaddy of all cycles”? Will matters go as he said? What does the Bible teach? Dr. Thiel provides biblical insights that secular sources often miss. This is a video.
Preparing for the ‘Short Work’ and The Famine of the Word What is the ‘short work’ of Romans 9:28? Who is preparing for it? Here is a link to a related video sermon titled: The Short Work.
The Final Phase of the Work What is the final phase of the work? Who will lead it? Do you have the courage to support it? Here is a related YouTube video titled The Final Phase of the Work. The written article has been translated into Spanish La Fase Final de la Obra.
Christian Repentance Do you know what repentance is? Is it really necessary for salvation? A related sermon is also available titled: Real Christian Repentance.
Is the USA now an Evil Empire? Dr. Thiel gives many reasons to consider. A related video is also available: Is the USA an Evil Empire?
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. A related sermon is titled: Do these 7 prophesies point to the end of the USA?
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin?
When Will the Great Tribulation Begin? 2017, 2018, or 2019? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2016 o 2017? ¿Es el Tiempo de los Gentiles? You can also see the English language sermon videos: The Great Tribulation from the Mount of Olives and Can the Great Tribulation begin before 2020? A shorter video is: Will the Great Tribulation Start in 2017?
World War III: Steps in Progress Are there surprising actions going on now that are leading to WWIII? Might a nuclear attack be expected? What about WWIV? Does the Bible promise protection to all or only some Christians? How can you be part of those that will be protected? A related video would be Is World War III About to Begin? Can You Escape?
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2023 or 20xx? There is also a video titled The 6000 Year Plan: Is the end of humanity’s reign almost up?
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be Barack Obama and the State of the Apocalypse.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to three related sermons: The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Donald Trump in Prophecy Prophecy, Donald Trump? Are there prophecies that Donald Trump may fulfill? Are there any prophecies that he has already helped fulfill? Could a Donald Trump presidency be apocalyptic? A related video is titled: 13 Ways President-Elect Trump is Apocalyptic.

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