1051 Fed's attempt to oust Trump may put Sanders, Warren or Gabbard in by mistake

Fed's attempt to oust Trump may put Sanders, Warren or Gabbard in by mistake

Newsletter published on September 8, 2019

(1) Fed's attempt to oust Trump may put Sanders, Warren or Gabbard in by
mistake
(2) Fed & IMF may switch from $ to SDR as World Currency - William Engdahl
(3) Fed Banker says Fed should help defeat Trump in 2020 by keeping
interest rates high
(4) Most U.S. Companies Plan to Stay in China and Ride Out Trade Unrest

(1) Fed's attempt to oust Trump may put Sanders, Warren or Gabbard in by
mistake
- Peter Myers, September 8, 2019

Several months ago, F. William Engdahl postulated that the Fed might be
holding interest rates high as a strategy to cause recession, which
would be blamed on Trump, making his re-election unlikely.

He expressed such thoughts in his article  Did the Fed Already Decide
the 2020 US Election? http://www.williamengdahl.com/englishNEO30June2019.php

Item 2 is his latest update on that topic.

I think he's right, that the Fed is trying to get rid of Trump, by
inducing a recession that he will be blamed for.

But the consequences might be different from what they envisage.

It could be that voters, sick of the whole rotten pack of cards, will
turn to Sanders, Elizabeth Warren aulnd si Gabbard, in the belief that
only such candidates will bring real change.

Sanders has much in common with Trump. They are both outsiders, somewhat
isolationist (although Trump submitted to the Deep State when he
appointed Bolton).

At this stage, the above three 'Left' candidates look unlikely to win.

But the recession has yet to bite. When it does, voters might be more
appreciative of  their socialist (but non-Communist) ideas. They are Old
Left rather than New Left. They look to the North European kind of
Socialism.

Wall Street will oppose them as much as they oppose Trump.

If the Democratic Establishment (DNC) cheats these candidates as they
did Sanders in 2016, I hope that they consider running as Independents.

(2) Fed & IMF may switch from $ to SDR as World Currency - William Engdahl
http://www.williamengdahl.com/englishNEO1Sept2019.php

Is the Fed Preparing to Topple US Dollar?

By F. William Engdahl

1 September 2019

Unusual remarks and actions by the outgoing head of the Bank of England
and other central banking insiders strongly suggest that there is a very
ugly scenario in the works to end the role of the US dollar as world
reserve currency. In the process, this would involve that the Fed
deliberately triggers a dramatic economic depression. If this scenario
is actually deployed in coming months, Donald Trump will go down in
history books as the second Hebert Hoover, and the world economy will be
pushed into the worst collapse since the 1930s. Here are some elements
worth considering.

Bank of England speech

The about-to-retire head of the very special Bank of England, Mark
Carney, delivered a remarkable speech at the recent annual meeting of
central bankers and finance elites at Jackson Hole Wyoming on August 23.
The 23-page address to fellow central bankers and financial insiders is
clearly a major signal of where the Powers That Be who run world central
banks plan to take the world.

Carney addresses obvious flaws with the post-1944 dollar reserve system,
noting that, "…a destabilising asymmetry at the heart of the IMFS
(International Monetary and Financial System) is growing. While the
world economy is being reordered, the US dollar remains as important as
when Bretton Woods collapsed." He states bluntly, "…In the longer term,
we need to change the game…Risks are building, and they are structural."
What he then goes on to outline is a remarkably detailed blueprint for
global central bank transformation of the dollar order, a revolutionary
shift.

Carney discusses the fact that China as the world leading trading nation
is the obvious candidate to replace the dollar as leading reserve,
however, he notes, "…for the Renminbi to become a truly global currency,
much more is required. Moreover, history teaches that the transition to
a new global reserve currency may not proceed smoothly." He indicates
that means it often needs wars or depressions, as he cites the role of
World War I forcing out sterling in favor of the US dollar. What Carney
finds more immediate is a new IMF-based monetary system to replace the
dominant role of the dollar. Carney declares, "While the rise of the
Renminbi may over time provide a second best solution to the current
problems with the IMFS, first best would be to build a multipolar
system. The main advantage of a multipolar IMFS is diversification… " He
adds, "… When change comes, it shouldn’t be to swap one currency hegemon
for another. Any unipolar system is unsuited to a multi-polar world… In
other words he says, "Sorry, Beijing, you must wait."

The Bank of England Governor proposes in effect that the IMF, with its
multi-currency Special Drawing Rights (SDR), a basket of five
currencies—dollar, Pound, Yen, Euro and now Renminbi—should play the
central role creating a new monetary system: "The IMF should play a
central role in informing both domestic and cross border policies. …
Pooling resources at the IMF, and thereby distributing the costs across
all 189 member countries…" For that to work he proposes raising the IMF
SDR funds triple to $3 trillions as the core of a new monetary system.

Then Carney proposes that the IMF oversee creation of a new payments
infrastructure based on an international "stablecoin." Referring to the
private Libra, he clearly states a "new Synthetic Hegemonic Currency
(SHC) would be best provided by the public sector, perhaps through a
network of central bank digital currencies." Note that Carney, a former
Goldman Sachs banker, is mentioned as a leading candidate to replace
Christine Lagarde as IMF head. Is his speech open admission of what is
being planned by the world’s leading central bankers as the next step to
a world currency and global economic control? Let’s look further.

Lagarde to ECB

The Carney speech, when deciphered from its central bank language, gives
us for the first time a clear roadmap where the powers that control
world central banking would like to take us. The world reserve role of
the US dollar must end; it must be replaced by some form of IMF SDRs as
basis for a multi-currency reserve. That in turn would ultimately be
based on digital money, so-called block chain currencies. Such
currencies, make no mistake, would be completely controlled by central
bank authorities and the IMF. That would require their often-proposed
elimination of all cash in favor of digital money where every cent we
spend can be monitored by the state. This cashless society would also
set the stage for the next great financial crisis and the confiscation
by governments of ordinary citizens’ bank deposits under new "bank
bail-in" laws now on the books since 2014 in every major industrial
country including the EU and USA.

The IMF is fully behind the turn to global blockchain digital currencies
and use of SDR to replace the dominant US dollar. In a little-noticed
speech in November 14, 2018, IMF chief Lagarde strongly indicated that
the IMF was behind central bank digital currencies as well as cashless
societies. She noted very carefully, "I believe we should consider the
possibility to issue digital currency. There may be a role for the state
to supply money to the digital economy." She added, "A new wind is
blowing, that of digitalization…What role will remain for cash in this
digital world? … demand for cash is decreasing—as shown in recent IMF
work. And in ten, twenty, thirty years, who will still be exchanging
pieces of paper?"

Dudley Remarks

The introduction of this central bankers’ new digital currency world
will require, as Carney suggests, dramatic upheavals of the status quo,
upheavals that would lead to the end of the dominant role of the US
dollar since the 1944 Bretton Woods agreement. As that dollar reserve
currency role is a pillar of American power in the world, for that to
happen would require nothing short of catastrophe. Is this in fact what
the Federal Reserve is quietly planning with its money policies?

A remarkable hint of what might be in the works came in an OpEd by the
person who until 2018 was the very important President of the New York
Federal Reserve Bank, Bill Dudley, who like Mark Carney is a senior
Goldman Sachs alumnus. Dudley is no minor actor in the central bankers’
world. Until last year he also was a member of the Bank for
International Settlements Board of Directors and chaired the BIS
Committee on Payment Settlement Systems and the Committee on the Global
Financial System.

Dudley, pointing to the Trump trade war policies and economic dangers of
same, then issues the following rare undiplomatic declaration: "Trump’s
re-election arguably presents a threat to the U.S. and global economy,
to the Fed’s independence and its ability to achieve its employment and
inflation objectives. If the goal of monetary policy is to achieve the
best long-term economic outcome, then Fed officials should consider how
their decisions will affect the political outcome in 2020." While it
shocked many, Dudley is merely making public what the Fed has done since
its creation in 1913 — influence the course of world and US politics
stealthily behind the cover of "neutral" monetary policies. Dudley
suggests not "Russian interference" but rather Fed interference.

The Fed could easily tip the US into crisis. The debt levels of the US
economy are at record high levels for private households, Federal
government, and US corporate debt. Most US corporations have used
growing debt, well over $9 trillion, to make stock buybacks rather than
invest in new plant and equipment, fueling an unprecedented bubble in
the S&P stocks. The rising stocks are not a sign of economic health but
of a dangerous speculative bubble vulnerable to collapse.

Were the Fed now to resume rate rises and continue its less-publicized
Quantitative Tightening into 2020, a domino-style series of debt
defaults, corporate bankruptcies, home mortgage foreclosures, default on
car loans and student loans could quickly make a second Trump Presidency
in 2020 more than doubtful. However that would be no grounds for the
rest of the world opposed to Trump policies to cheer. It would also
trigger collapse in major emerging market countries who have borrowed
hundreds of billions denominated in US dollars, including Chinese state
companies, Turkey, Argentina, Brazil to name a few. EU banks from Italy
to Germany to France would fail.

If this Dudley scenario comes to pass in 2020 or not, only the key
central bank actors know for sure. It is clear that, after almost eleven
years since the 2008 global financial meltdown, the unprecedented
central bank zero interest rate policies in the EU and until recently
the US, have fueled creation of what some call an "everything bubble",
not only in stocks, in corporate and public bonds, in home prices. Is a
new Fed intervention to raise rates and tighten credit the event– the
deliberate central bank rupturing of this inflated bubble using the
excuse of the Trump danger to the world economy– that Carney has in mind
when he says, "transition to a new global reserve currency may not
proceed smoothly,"? Let us hope not. The coming months will tell.

F. William Engdahl is strategic risk consultant and lecturer, he holds a
degree in politics from Princeton University and is a best-selling
author on oil and geopolitics, exclusively for the online magazine "New
Eastern Outlook"

(3) Fed Banker says Fed should help defeat Trump in 2020 by keeping
interest rates high

https://www.news.com.au/finance/work/leaders/us-fed-should-help-defeat-trump-in-2020-former-official-says/news-story/2665479c4df0680c022b76ed3b7ac321

Fed should help defeat Trump in 2020

A former top US central banker has sparked a firestorm with an opinion
piece calling on the Federal Reserve to do something truly outrageous.

AFP AUGUST 28, 2019 8:38AM

A former top US central banker leapt into the political fray on Tuesday,
calling on the Federal Reserve to oppose President Donald Trump’s
re-election effort next year.

Bill Dudley, the influential former president of the New York Federal
Reserve Bank, also said the Fed should not "enable" Trump’s escalating
trade war with China by lowering interest rates.

The stunning arguments in a Bloomberg opinion column flew in the face of
efforts of current Fed officials to remain strictly neutral, above the
political fray, despite Trump’s intense year-long campaign to demand
easier monetary policy.

But Dudley said the outcome of the 2020 presidential elections was
arguably "within the Fed’s purview" because a second Trump term
represented a threat to the global economy as well as the Fed’s
political independence and policy mandates.

"If the goal of monetary policy is to achieve the best long-term
economic outcome, then Fed officials should consider how their decisions
will affect the political outcome in 2020," he wrote.

Trump already blames the Fed, rather than trade policy, for the slowing
economy and has demanded drastic cuts in interest rates in his
relentless, nearly daily attacks.

Last week he called Fed Chairman Jerome Powell an "enemy" and on Tuesday
tweeted that central bankers loved "watching our manufacturers struggle"
to export to markets with easier monetary policy.

Powell, when asked, has consistently brushed off Trump’s near-daily
invective, saying Fed officials do not take politics into account when
deciding on policy.

Earlier this month, the Fed cut interest rates for the first time in
more than a decade even though unemployment remains at historic lows,
amid growing concerns about the global economy.

Investors overwhelmingly expect the Fed to deliver at least a
25-basis-point rate cut next month as the economy slows and the US-China
trade war drags into its second year.

But Dudley, who also served as the vice chairman of the Fed’s
rate-setting Federal Open Market Committee, said in his op-ed that
providing more stimulus could encourage Trump to escalate a "disastrous"
trade war with China, which deteriorated sharply last week.

NOT POLITICISING

"The central bank’s efforts to cushion the blow might not be merely
ineffectual. They might actually make things worse," he wrote.

Instead the Fed should clearly state that it will not cut rates to send
a signal that Trump will own the risks created by his trade wars —
"including the risk of losing the next election," Dudley said.

Dudley retired from his post as New York Fed president last year and is
currently a senior research scholar at Princeton University.

Richard Fisher, former president of the Dallas Federal Reserve Bank,
said Tuesday the Fed’s moves were decided purely on the merits and were
not reactions to Trump’s actions.

"I am convinced that they are not politicising," he told CNBC, adding
that he felt Dudley had gone "a little too far" in his opinion piece.

On the other hand, Fisher warned that policymakers who bent to the will
of the White House risked the scornful judgment of history.

He cited the example of former Fed Chairman Arthur Burns who, was
bullied into easing policy by President Richard Nixon, helping ignite
runaway inflation.

Burns "prostituted himself" to Nixon and became "the least respected of
all former Fed chairs," Fisher said.

(4) Most U.S. Companies Plan to Stay in China and Ride Out Trade Unrest
https://www.bloomberg.com/news/articles/2019-08-29/most-u-s-companies-plan-to-stay-in-china-ride-out-trade-unrest

By Jenny Leonard

August 30, 2019, 1:31 AM GMT+10

When President Donald Trump ordered American companies last week to
break off ties with China, he gave a directive that conflicts with the
plans of a vast majority of large U.S. firms doing business there.

That’s according to a new survey of U.S.-China Business Council members.
Eighty-seven percent of respondents said they neither have moved nor
plan to shift operations out of China, compared with 90% in a 2018
survey. Only 3% said their China operations were unprofitable, unchanged
from a year ago.

"The majority of American companies surveyed remain committed to the
China market and few are currently divesting existing operations,"
according to the survey results released Thursday in Washington.

The survey, reaching about 100 members of the council, was conducted
over three weeks in June. The relationship between the U.S. and Chinese
governments has soured since, with on-again, off-again negotiations that
have created uncertainty for investment plans.

The survey was taken before Trump’s Aug. 23 tweet, which said: "Our
great American companies are hereby ordered to immediately start looking
for an alternative to China, including bringing your companies HOME and
making your products in the USA."

....better off without them. The vast amounts of money made and stolen
by China from the United States, year after year, for decades, will and
must STOP. Our great American companies are hereby ordered to
immediately start looking for an alternative to China, including
bringing.. — Donald J. Trump (@realDonaldTrump) August 23, 2019

Craig Allen, president of the council, said he didn’t interpret Trump’s
tweet as pushing American companies that serve the Chinese market
domestically to leave the country.

"We do not believe that he wishes to encourage other American companies
that have successful operations in China to leave," Allen said. "Our
members are in China for the long term, none of them are anticipating
orders to leave."

The council’s survey showed that the overwhelming majority of its
members invest in China to access the domestic market and "less than a
quarter of companies invest in China to export regionally or to the
United States."

Read more: Trade War or Not, U.S. Companies Follow the Consumer to China

The survey alluded to a cautious review of companies’ supply chains in
China and paints a grim picture of the effects of a trade war that’s now
in its second year. Eighty-three percent of respondents said they didn’t
curtail or stop planned investments over the past year, down from 92% a
year ago.

"Nearly half of respondents report lost sales and ceding market share to
foreign competitors," the survey stated. "The primary contributor to
lost sales is the implementation of both U.S. and Chinese retaliatory
tariffs, as evidenced by lost price competitiveness, shifts in supply
chains, and uncertainty of continued supply."

Allen said loss of business in the Chinese market from the trade war
could have long-term, negative impacts for American companies.

"Losing market share is easy," he said. "Gaining it back is very, very
difficult."