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How the Establishment Plans to Torch Trump’s Economic Plan: Part 1

The warning was buried on the inside pages of the economic journals and merited barely a line on Drudge, but liberal establishment Progressives deeply burrowed into the government are about to try to torpedo President-elect Donald Trump’s economic plan. 

And their strategy for doing so is simple: Do something that probably should have been done a long time ago – raise interest rates. 

Janet YellenAfter keeping interest rates at near-zero for Obama’s entire tenure as President and subsidizing a vast run-up in the stock market and Obama’s disastrous “stimulus package” Federal Reserve Chair Janet Yellen signaled the U.S. central bank is close to lifting interest rates. 

A rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Yellen said in the text of testimony she is scheduled to deliver Thursday in Washington before Congress’s Joint Economic Committee. 

Yellen, who made no mention of the prospective policies of the incoming administration of President-elect Donald Trump, reiterated the expectation of Fed officials that future rate increases will be “gradual.”  

Bond prices have fallen and stocks have risen as investors anticipate that Trump’s proposals to cut taxes and boost infrastructure and defense spending will lead to faster inflation and stronger growth, said Bloomberg Markets reporter Christopher Condon. 

“A rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist. “But the pace of firming is likely to continue to be glacial because the funds rate will then be within about a percentage point of the FOMC’s estimate of neutral,” he said, referring to the level of rates that neither spurs nor slows the economy. 

Yellen said the decision not to raise rates earlier this month didn’t reflect a lack of confidence on the economy. 

“I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the committee’s 2 percent objective over the next couple of years,” she said. “In addition, global economic growth should firm, supported by accommodative monetary policies abroad.” 

While the recent pace of jobs gains “cannot continue indefinitely,” Yellen said she still saw room for further strengthening of the labor market. 

In other words, after eight years of doing everything possible to prop-up Obama’s failed policies the Fed has now gotten religion and decided to implement a policy to keep employment growth neutral and slow wage growth at a time when working Americans haven’t had a real pay increase in a decade. 

And the idea that under the Obama – Yellen policies the labor market is actually strengthening is a complete fantasy, because with more than 93 million Americans out of the workforce the proposition that the unemployment rate is 4.9 percent is little more than a political fabrication. 

But Yellen did reveal a kernel of truth in the remarks she delivered Thursday in Washington before Congress’s Joint Economic Committee: Involuntary part-time employment, she noted, “remains elevated.” 

No kidding? 

Of course a major factor in the rise in involuntary part-time employment is Obamacare, and employers doing everything they can to avoid triggering the employer mandate and the associated costs. 

But the real reason economic growth and job creation are lagging is that private sector employers are simply not creating enough jobs to accommodate new entrants to the job market and re-employ those 93 million who have left the labor market. 

Last month, the Obama economy created approximately 161,000 jobs, many in the government sector, and in the same month that Obama issued a record number of new regulations we might add. 

This level of job creation doesn’t even begin to make a dent in the number of people who have been unemployed for more than six months or who have left the workforce entirely. 

What level of job creation would it take to get those workers who have left the workforce back into jobs? 

At 161,000 jobs a month our economy is actually losing ground. With the “civilian labor force participation rate” at its lowest level in 36-years it would take filling the 174,000 seats at NASCAR’s Talladega Superspeedway every week for more than a year just to get us back to even. 

And now the Obama-appointed Chairman of the Federal Reserve Board wants to make the bonds necessary to fund Trump’s infrastructure plans more expensive? 

After subsiding Obama’s failed economic agenda for eight years Yellen’s plan to raise interest rates as soon as Trump takes office, if not before, is nothing less than political sabotage.

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Feds bomb is intentional and planned

I am retired from accounting and business systems but I have not forgotten what I learned over forty years of experience and college. I have been expecting this to be this administration's last parting shot at this country and Trump. Obama would have done this to his dem replacement too. I feel certain Trump has been expecting this and it will cause the stock market, the housing market and anything else dependent on low interest rates or tied to variable interest rates to fail horribly. But this is a bullet that should have hit years ago. We have been on borrowed time since the federal government lowered the rate to this unbelievably low rate and then manipulated the financial markets to keep the normal rise in interest from happening. Just like every time the stocks have tried to crash and then would have normalized this administration and many others in the world Like China have fixed it, or more aptly said, prevented a crash in the stock markets and pushed it weakly along.

Well, the feds and Obama know what raising the rates will do. They do not care. Here the desire is to make mischief and this may hurt for a bit but it is also Trump's silver lining too. I am betting the pain will be short lived and when the country comes roaring back it will be much healthier. However, there may be as much as a year of pain in the industries that developed a dependency on cheap low interest.

So get rid of anything with a variable rate, be able to move your investment in stocks very, very fast and follow a conservative financial plan through it. Low fixed mortgage on your properties and find places to shelter your funds. Preferably things that do not take you into a negative. And watch out for the banks, many have been quietly pulling the Greek bank's little routine. The FDIC insurance may have already been taken out of practice so the funds those banks manage are not insured. Your account may be treated as a loan to the bank and they will use it if they decide they need to. In that case, there may be no money in your account because it has been borrowed, you are an investor, not a client liability. Beware, they have been maneuvering to this point for years.

And the too big to fail still have a get out of debt free card to use because congress failed to pass the one bill in 2014 I think that said we would not bail them out again. I think the senate can take most of the credit for that set up. And I would point out that the democrats and rinos set us up for that. So since I have been expecting this and so have may other financial people you all should not be surprised, we have been discussing this for a year.

I still laugh when I see the polls saying Obama's people rating in anywhere near 50%. And what he is planning with the FEDs is despicable but utterly in character for him. We will ride this one out too but everyone needs to know this is not being done innocently, IT IS PLANNED WITH MALICIOUS INTENT BY THE DEPARTING PRESIDENT AND HIS BEST PALS!