A president bullies Congress in the bond market.
After playing the world economy and chicken by launching the Mindless Customs War for weeks Over 180 countriesDonald Trump blinked. On Wednesday, Trump announced a 90-day suspension on many (but not all) of these tariffs. This has given the stock market a short break from the sharp decline over the past few days. However, the market fell the next day when the reality that China was still subject to strict tariffs became clear.
The good news is that even if uncertainty continues to stumble the global economy, the limitations of Trump’s ability to whimper global trade are revealed. The bad news is that these restrictions are not imposed by democratically elected institutions with constitutional authority to check dangerous presidents. In fact, Congress has become even more irresponsible and coronavirus, coping in front of Trump, irresponsibly transferring its tariff power to enforcement.
Continuing resolutions on the April budget (backed by Chuck Schumer and nine other Democrats in the Senate), Congress explicitly states Abandoned the ability to terminate emergency power sources Declaration to assume Trump’s customs policy. The budget resolution passed by the House on Thursday went further. As Sahil Kupar on NBC News It has been reported Wednesday: “Hospital Republicans pushed language into the budget [resolution] The “rules” prohibit the House from banning the House from voting to end Trump’s emergency declaration, which is used to impose tariffs… Lawmakers voting for this have officially given up on their power to cancel his tariffs until October. ”
As mentioned in the previous column, the tariff crisis is also a constitutional crisis. Constitutional authority is also a constitutional obligation. Congress has the same liability that led them to hand over the responsibility of war production to the commander, and has given up on the responsibility of setting tariff fees, giving the Imperial President even more power. When the president is a power-hungry fool like Nixon or George W. Bush, the centralization of power in the oval office is bad enough, but even more tragic in the sense that the CEO has the character of a crazy emperor like Nero or Caligula. Nero messed around as he said saying while Rome was burning. How bad is Trump? dance While setting the world fire.
As far as the arsonist has been empirically stopped from some of his burning Cen activities, this is not due to the proper constitutional and democratic actions of Congress, but the actions of the ultra-rich people. Wall Street played a role not only in the stock market fall, but also in lobbying the White House and Trump’s GOP allies. But more importantly, the intervention of bondholders who began selling financial obligations that could easily cause economic meltdowns in the Great Repression order. It is worth remembering that bondholders are overwhelmingly economic elites. That’s more than the stock market. The stock market is rarely a democratic institution, but pension funds give a share interest to a large portion of the population. In contrast, the 2016 report Found Only 1.3% of the population (almost all of which are extremely abundant and participate directly in the bond market.
Initially, Treasury Secretary Scott Bescent and Commerce Howard Lutnick were promoting the possibility that stock market corrections could lead to more money. Unexpectedly, there was a move from the Ministry of Finance. As Willian D. Cohan pack explanation:
On Monday, the Treasury yields rose from 3.89% in 2010 to around 4.12, with a 6% move in one day and a clear signal that bond investors are very nervous about what’s going on in the White House. On Tuesday, we backed up to an additional 4.25%. This increased by 9% over two days. By Wednesday, the 10-year-old Treasury had scored 4.54%. (After Trump announced a 90-day suspension, yields fell slightly to 4.4%. I’m sure he had high expectations.)
Current Issues
With his substance Chartbook On Monday, Columbia University historian Adam Touse wrote extensively about the economic crisis. I laid out the scenario If Treasury bond execution could lead to a broader economic crisis:
What if the flux does not cool the panic even though it provides fluidity? What if both Americans and foreigners decided they no longer wanted to grab a wagon in the Empire of the Madness King? What if they decide that the US is in fact exceptional, but in a rather troublesome way, it is exceptional? What if the UK Telegraph Report is more than just a rumor? German leaders are seriously considering pulling the remaining gold reserves out of the USbecause of Trump’s risk? In that case, keeping the billions of dollars newly created by the Fed won’t give you the security you want.
So you’re selling dollars. You just want it from a crazy house.
This will really be a major disaster for women and gentlemen. It will sell out not only our stocks. It’s not just bonds. But the Advertising Court for Dollar Assets. This will be a long-announced crisis for the dollar.
Tooze described the scenario as “impossible,” but the panic on Tuesday and Wednesday suggests at least the beginning of a nightmare crisis. This is why Trump blinks. Explaining Trump on Wednesday his 90-day tariff suspension He told reporters:
“Well, I think people were popping out of the line a bit. They were getting Yippy… The bond market is very tricky. I was watching it. But if you see it now, it’s beautiful. But the bond market is beautiful.
Certainly, Trump, who had to learn the difficult way financial capital would call shots, is not the first president. In 1994, Bill Clinton was quoted in Bob Woodward Books Agenda Lament“Please tell me the program and my success in reelection depends on the Federal Reserve and the massive amounts of bond traders,” in the same book, Clinton adviser James Kerrville said, “I thought I would have hoped I would have returned as president or pope, or as a .400 baseball batsman. But now I want to return as a bond market.”
Just as bond traders have been strong for a long time, they are now even stronger. They have been empowered both by Trump (his reckless policies give even greater leverage than the US government) and the potential of Congress. At the end of the day, holding back an out-of-control president should not be the job of a bond trader. That’s the council’s duty, but in August my body became AWOL. The infamous bond vigilantes needed no more strength. But they have it now.
