Amidst the furore generated by the new American President’s controversial decisions or policy statements, the situation on the economic front is overshadowed by the bitter political infighting between various factions of the US government. However, it is probably the greatest challenge faced by the administration if we look past the hysteria generated by the alleged collusion between Donald Trump’s team and the Kremlin or by the President’s supposedly “fascist” views. If Trump cannot overcome the disaster that looms over the US financial system and keep his promise to restore American solvency and generate millions of high paying industrial jobs, he will go down in history as another failed POTUS, even if he manages to improve relations with Russia, avoid a trade war with China, settle the Syrian civil war and abort catastrophic armed conflicts with Iran and North Korea.

A recently published book entitled FED UP: An Insider’s Take on Why The Federal Reserve is Bad for Americans (Portfolio, Penguin Random House) by Danielle Di Martino Booth, a former FED adviser, throws light on the nefarious role of that mighty but shadowy private institution run by non-elected, unaccountable economic technicians, which, whilst inflating various credit bubbles—that predictably blew up one by one, destroying millions of jobs—has brought about the gradual ruin of the middle class in the US by lowering the federal lending rate to almost zero, consequently wiping out the returns of pension funds and considerably enriching investment and merchant bankers, who have access to free money for carrying out gigantic mergers and acquisitions and buying back their own stock (at the average annual rate of over 500 billion dollars for S&P 500 companies in the last four years).

Hence, the profits of major corporations mainly come from financial activities and not from productive earnings, while only the wealthier few can live off returns on their savings. Most salaried people are locked in 401(K) pension plans dependent on the uncertain fortunes of market-indexed funds.

There has been no noticeable investment in infrastructure, R&D, modernisation and long term hiring, so that the stock market has ballooned only out of a speculative frenzy, despite an anaemic or wilting economy, which generated the popular frustration and fear responsible for bringing Trump to power.

This parlous situation has led to an increasing focus on the Fed. In 2010, Senators Ron Paul and Bernie Sanders forced it to submit to a partial public audit. The audit revealed that the FED has created and lent some 26 trillion dollars “out of thin air” since 2008 in order to support the “too big to fail” banks (including its own member-institutions at home) all over the world. Citigroup alone got 1.7 trillion and in the process the FED inflated its own balance sheet to 4.5 trllion in almost ten years of Quantitative Easing, a policy inaugurated by Alan Greenspan, who saw it as a solution to every bursting bubble, but correctly described by Paul as “socialism for the (super) rich”.

There has been no noticeable investment in infrastructure, R&D, modernisation and long term hiring, so that the stock market has ballooned only out of a speculative frenzy, despite an anaemic or wilting economy, which generated the popular frustration and fear responsible for bringing Trump to power.

Trump, by instinct and background, belongs to the libertarian economic school. That explains his repugnance towards multilateral trade pacts, but rather inconsistently, he has affirmed a commitment to revitalise the economy through massive public investment schemes inspired by FDR’s New Deal. His attitude to the FED, to which he was vocally hostile during his campaign, is favourable to Senator Rand Paul’s (son of Ron Paul) campaign against the Reserve Bank’s hegemony. Paul is reported to have advised him to dismantle, or at least drastically reform or cut down to size that behemoth (Di Martino Booth recommends “upending” it).

Another influential lawmaker, Patrick McHenry (Rep. N.C.) wrote a letter to Janet Yellen, the FED’s chairman on 31 January 2017 to notify her that Congress intends to regain control over the setting of interest rates. He warned Yellen against continuing to hold consultations with the Basel Group and the Financial Stability Board (FSB), both based in the Swiss city and related to the Bank for International Settlements, a private banking cartel founded in 1930 at the behest of hegemonic European financiers, later joined by their American counterparts. Yet, raising rates will obviously shoot up the entitlements required to service the national debt in an increasingly strained budget.

Since Trump’s accession to the presidency, he has kept silent about the FED, and many feel that like Ronald Reagan in his day, he does not wish to take on that “too big to fight” colossus directly, but suspicions (or hopes) remain that using the upcoming vacation of three seats on the FED Committee, he could impose major changes on the institution.

Irrespective of his personal ideas, the system is increasingly unviable, as it has led the world to increase its debt by 60 trillion since 2008, while in the US, the federal debt owed by the public has doubled since 2001 to exceed 75% of GDP, whereas “shadow” permanent unemployment remains stubbornly above 23%. An economic cataclysm is in the making and it will affect the entire world as badly as countries such as Greece, which have been cannibalised by the lenders’ cartels for at least ten years.

Trump, a long-standing believer in the desirability of restoring the gold standard for the American financial system, must therefore attempt to arrest the free fall in one way or another, instead of giving the FED carte blanche as Obama did. However, he is apparently trying to square the circle by boosting defence spending by 10%, while trying to cut other expenses by the same amount, without yet touching entitlements. He certainly seeks to keep the powerful military industrial complex on his side, while challenging other influential factions of the “permanent government”.

Is it the President’s FED-scepticism, which arouses such virulent and hateful opposition among “liberals” and their paymasters like George Soros and other financiers and bankers, for the most part supporters of the present centrally controlled credit system?

There is indeed furious antagonism from the “prime” banks and hedge funds, main beneficiaries of the current “free money” regime, to any attempt to make changes, even though the policies of the new administration are entrusted to a team of Wall Street insiders, some of whom are linked with Goldman Sachs. So why this relentless pressure to impeach or at least neutralise Trump?

Only the naïve can believe that this anger is solely motivated by a concern for human rights or by the POTUS’ often intemperate statements about the media or immigrants. Proliferating accusations of anti-Semitism (a poison pill in contemporary western politics) from an array of lobbies who openly compare him to Hitler, on par with “his buddy Putin”, are even less credible, given that the President has a partly Jewish family, has long shown exceptional sympathy for Israel and Zionism and has appointed several Jews to top cabinet positions. Are enemies of Trump assaulting or blackmailing him on moralistic pretexts to deter him from going after the FED and allied hegemonic financial bodies?

This revulsion hides the fear that the present financial system may be drastically changed by Trump in ways which could reduce the exorbitant privileges enjoyed by the transnational community from which almost all FED chairmen have come since its inception, including the last four, Volcker, Greenspan, Bernanke and Yellen.

From his research on the “Anglo-American Oligarchy”, Georgetown University historian Carroll Quigley described in his book Tragedy and Hope (1966) the objective of that hegemonic fraternity as “nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole”. This goal has now been largely achieved and Quigley pointed to the aforesaid Basel Institutions as being the apex of the hierarchy.

With his insistent call for “America First” economic nationalism and for returning power to the people, Trump is striking blows at that supranational construct and threatening the core of the Deep State, which has, hitherto, dictated American domestic and foreign policies. Time will tell if he can and will ride the Leviathan.

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