Trump Causes Dollar To Fall, Investors Worry He Will Screw Up Currency!

[Economy 52,844]

https://www.bnnbloomberg.ca/u-s-dollar-weakens-as-donald-trump-slams-fed-rate-hikes-1.1126401

 

Trump once again criticized the Fed for raising rates and "compromising growth". The dollar fell as investors worry Trump could start to get involved in a branch of Government he has no jurisdiction in and make a mess.

 

Interest rates have to go up when the economy strengths or unwanted imbalances and side effects occur including high inflation, and overheating (demand rising above productive capacity)

 

To give an example, Turkeys current crises in part has been created by the Federal government pressuring the Turkey Central Bank to keep rates lower than economy warranted resulting in overheating, inflation and other problems.

 

History has shown when the Government interferes in Central Banks affairs which are supposed to be independent, they have a hard time resisting the urge to keep rates low to fuel short term economic growth and to keep government debt interest rates low,  in some cases print money, but it doesn't take long for such wreckless policies to backfire! 

 

Such policies almost always destroy a currencies value

[Prada 1,200]

Just now, Economy said:

https://www.bnnbloomberg.ca/u-s-dollar-weakens-as-donald-trump-slams-fed-rate-hikes-1.1126401

 

Trump once again criticized the Fed for raising rates and "compromising growth". The dollar fell as investors worry Trump could start to get involved in a branch of Government he has no jurisdiction in and make a mess.

 

Interest rates have to go up when the economy strengths or unwanted imbalances and side effects occur including high inflation, and overheating (demand rising above productive capacity)

 

To give an example, Turkeys current crises in part has been created by the Federal government pressuring the Turkey Central Bank to keep rates lower than economy warranted resulting in overheating, inflation and other problems.

 

History has shown when the Government interferes in Central Banks affairs which are supposed to be independent, they have a hard time resisting the urge to keep rates low to fuel short term economic growth and to keep government debt interest rates low,  in some cases print money, but it doesn't take long for such wreckless policies to backfire! 

 

Such policies almost always destroy a currencies value

Turkey is an perfect example imo.

If Trump dares to threat other countries with their currency by interfering Central Bank affairs, and cause downfall on other currencies he can't expect China, Russia, or any other strong or weak country in the world to sit down and watch. With time people will get away from using dollar. What makes dollar strong is the fact that all the world uses it, but believe me, people won't sit and buy and sell with dollar while its being controlled by a child.

[Economy 52,844]

27 minutes ago, Adriana Lima said:

Turkey is an perfect example imo.

If Trump dares to threat other countries with their currency by interfering Central Bank affairs, and cause downfall on other currencies he can't expect China, Russia, or any other strong or weak country in the world to sit down and watch. With time people will get away from using dollar. What makes dollar strong is the fact that all the world uses it, but believe me, people won't sit and buy and sell with dollar while its being controlled by a child.

Unfortunately.

 

We've seen time after time in history what happens when a Government tries to Influence or control a central bank and it becomes politicized

 

The whole point of keeping Central Banks independent is so that their committee can analyze the economic data coming in and with their knowledge of macro-economics make a decision on where rates should be on the current economic climate without being influenced by political pressures or civilians general opinions (which usually are formed without much knowledge on an issue)

 

Politicians have too many political motives to think straight or to not give in to the temptation to make rash decisions that might lead to faster growth during their term but screw up the financial system later down the road