Guide on Disrupting the US Dollar's Monetary System
In a recent turn of events, former US President Donald Trump has publicly called for the resignation of Jerome Powell, the current Federal Reserve chair, on his Truth Social platform. This public humiliation is reportedly unprecedented among previous Federal Reserve chairs.
Trump's relationship with Powell has been strained, with the former president referring to him as "Mr Too Late", "a numbskull", and an "average mentally person...Low IQ for what he does". This public attack may be driven by Trump's desire to weaken the US dollar, as a weak US dollar could potentially promote "Made-in-America" exports.
During Trump's tenure, the US engaged in a trade war with China, imposing tariffs on billions of dollars in Chinese goods. This led to retaliatory measures and volatility in financial markets, affecting sectors reliant on global supply chains. In his second term, Trump further increased tariffs, including "universal baseline tariffs" on all imports, which has led to significant market volatility.
The economic implications of these policies are evident. The US dollar has dropped more than 10% against the dollar index since Donald Trump returned to power. This depreciation has resulted in a journalist being paid in Hong Kong dollars to exchange HK$5.8-plus for one Canadian dollar, compared to the previous average of HK$5.4. The difference in exchange rate translates to approximately 6 to 7 additional visits to a favourite grocery store for the journalist and their wife on a monthly basis.
The real inflation rate for some items in the grocery store is suspected to be 10 times the headline Canadian rate of under 2%. This is concerning, as the Federal Reserve, led by Chair Jerome Powell, focuses on monetary policy to manage inflation and stabilize the economy. The Fed's decisions are guided by economic indicators, including GDP growth, inflation rates, and employment figures, which can be influenced by the president's policies.
However, the Fed's actions, such as interest rate adjustments, aim to mitigate the effects of economic uncertainty caused by Trump's tariffs. The search results do not specifically address the extent to which the US dollar's drop under President Trump's tenure was the worst since the oil shock of 1973. However, they do provide insight into the impact of Trump's policies, particularly tariffs, on the economy and currency markets.
In summary, while the search results do not provide a direct comparison of the dollar's performance under Trump to the 1973 oil shock, they highlight the significant economic volatility and challenges posed by Trump's tariff policies. These policies can influence the Federal Reserve's decisions, as it navigates the complex landscape of economic growth, inflation, and market stability.
- The public attack on Powell by Trump could potentially impact the 'politics' of 'finance', as the Federal Reserve's decisions are influenced by the president's policies, and the stability of the economy may be affected.
- Trump's tariffs on Chinese goods and subsequent increases, including 'universal baseline tariffs' on all imports, have led to significant 'economic volatility' and a drop in the US dollar's value, which in turn affects 'general-news' like international trade and exchange rates.
- The depreciation of the US dollar under Trump's tenure has impacted the 'health' and 'education' sectors indirectly, as a higher cost of living—caused by inflation and a weakened currency—may affect the purchasing power of individuals, as seen in the example of a journalist being able to visit a grocery store more often due to the difference in exchange rates.
