Who Will Trump Pick As Next Fed Chair?

Tyler Durden's picture

With tensions between president-elect Trump and Fed Chair Janet Yellen strained, Standish Chief Economist Vincent Reinhart discusses possible Federal Reserve appointments under a Trump administration. The front-runner, in his opinion, seems to be John Taylor...

Taylor and Hubbard were talked about during the Bernanke discussions... but Reinhart notes that broadly speaking they are conventional and will follow a tightening path (should the data continue to confirm it).

With hard-money advocates evident across many of Trump's picks, his choice will be intriguing.

Full interview below:

As we noted previously, starting in a week, President-elect Donald Trump will have a unique opportunity to pack the Federal Reserve with hard money officials.

There are currently two open Board of Governors seats, which will most likely not be filled before the end of President Obama’s tenure. Additionally, both Chair Janet Yellen and Vice-Chair Stanley Fischer’s terms will be up by 2018. Crunch the numbers and you will see that Trump has the opportunity to replace a majority of the Board of Governors and a third of the FOMC with monetary policy hawks during his presidency.

Call me crazy, but assuming that the Republican-controlled House and Senate stands behind him, I believe that Trump just may shock the financial world by shifting this country’s monetary policy in a more hawkish direction.

Yes, this is a guy that cheered on the Fed’s easy-money policies in the years before the Great Recession. And yes, Trump did say in May that he is still a “low interest rate person” who will appoint another dove to head the Federal Reserve. Why in the world, then, am I arguing that the Trump administration might possibly install more hawkish members to the central bank?

Repeated Anti-Fed Campaign Rhetoric

For one, Trump’s occasional dovish comments do not match the passion and enthusiasm of his repeated hawkish campaign trail rhetoric. For the past year, the president-elect has been railing against the “false economy” that the Fed has created, as well as the political influence that runs rampant throughout the central bank.

Perhaps Trump’s most scathing attack on the institution came last October, when he insinuated that Fed actions are crippling the middle class without creating any type of benefit to the economy at large.

“[Chairwoman Yellen] is keeping the economy going, barely,” he said. “You know who gets hurt the most [by her easy money policies]? The people that went through 40 years of their life and saved a hundred dollars every week [in the bank].” He then paused and shook his head for added effect before adding: “They worked all their lives to save and now what happens is they’re being forced into an inflated stock market and at some point they’ll get wiped out.”

These anti-Fed talking points were recycled often on the campaign trail. In September, Trump attacked the Fed for putting us in a “big, fat, ugly bubble” and for keeping rates artificially low for political purposes, points that he again repeated in the first presidential debate. The business mogul has also promised to audit the Fed within the first 100 days of his administration and even included a criticism of the central bank in a recent online video ad.

Sound Money Economic Advisers

Team Trump’s economic advisers paint an even more optimistic picture of his future monetary policy. Some of today’s most reasonable mainstream economic voices are included in his inner circle. These names include David Malpass of Encima Global, who co-signed a letter with Jim Grant opposing the Fed’s “inflationary” and “distortive” quantitative easing program; John Paulson of Paulson & Co., who made billions from shorting the housing market before the Great Recession; Andy Beal, a self-described "libertarian kind of guy" who blames the Fed for the credit crisis; and the Heritage Foundation’s Stephen Moore, who told CSIN in 2012 that he is a “very severe critic” of the Fed’s “incredibly easy-money policies policies of the past decade.”

While none of Trump’s economic advisers are by any means Austrians, they are far more hawkish than most of Presidents Bush and Obama’s past economic advisers. Ian Shepherdson, chief economist at Pantheon Macroeconomics, has even said that these advisers are pushing Trump to nominate two “hard money” candidates to fill the Fed’s current vacancies.

“A core view of many Trump advisors is that the extended period of emergency policy settings has promoted a bubble in the stock market, depressing the incomes of savers, scared the public and encouraged capital misallocation,” Shepherdson told Market Watch. “Right now, these are minority views on the Fed policymaking committee, but Trump appointees are likely to shift the needle.”

The Mike Pence Factor

Perhaps the best news for Austrians is that reports have indicated Trump may make his running mate the “most powerful vice president in history.” This is good news, because Mike Pence is one of the more hawkish voices in the modern Republican Party.
 
While in Congress, Pence expressed regular concern that the Fed was deteriorating the value of the dollar. He introduced legislation to end the dual mandate and even talked up a return to the gold standard.
 
In a high-profile 2010 speech to the Detroit Economic Club, Pence remarked that “while there is no guarantee that [the Fed’s bond-buying] will succeed in reducing unemployment, it is near certain that the value of the dollar will be diluted.” He then went on to say that “the time has come to have a debate over gold and the proper role it should play in our nation’s monetary affairs,” because “a pro-growth agenda begins with sound monetary policy.”

Conclusion

Trump’s election has given hard money advocates the most hope in over 30 years that our nation’s failed monetary policy will be reformed. Mixed with the current hawkish wave that is already percolating in the veins of some FOMC members, Trump’s future appointments can have a huge impact on the central bank’s immediate decision-making. One can only hope that the president-elect will stick to his guns and do the right thing. Regardless of what he does, however, it will surely be a step ahead of what the Hillary Clinton rubber dove stamp would have brought to the trading desks.

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Wheresthesolutions's picture

Ellen Brown bitches; banking should be designed by the community, for the community.

 

P.S Fuck all you naysayers.

Notveryamused's picture

Not as Fed Chair but appointing Ron Paul to the board would probably be the biggest brand win for Trump and Trump understands branding. With one appointment he largely consolidates a lot of the non democratic support.

If Fort Knox doesn't have all the gold he can also reveal that without revealing the total amount. This one simple branding exercise will also lump all previous administrations as part of the 'establishment' who have lied to the American people. (He could alternatively further look into 9/11 for a similar effect.) Either option, he wins and the establishment is crippled for lying to the American people under multi party administrations.

Twee Surgeon's picture

"biggest brand win for Trump". I like that. putting Rom Paul up front and center would imply a ton of sincerity. Audit the Fed.

FreezeThese's picture
FreezeThese (not verified) Twee Surgeon Jan 11, 2017 7:27 AM

Too easy ... a white guy, duh

Croesus's picture

I'd like to see Rick Santelli tearing it up!

You know FOMC meetings would way more interesting.

Only good news guy left.

Pegasus Muse's picture

Glenn Hubbard?!  Hubbard!

The same Glenn Hubbard who was a featured villian in the Charles Ferguson documenatry "Inside Job"?  

https://www.youtube.com/watch?v=CaXNqGgIc-g 

Say it ain't so, Joe!

 

Uchtdorf's picture

The only win for us peons would be to End The Fed, and to do it post haste.

----_-'s picture
----_- (not verified) Uchtdorf Jan 11, 2017 9:11 AM

he can appoint whoever he wants to the FED has lost most of its purpose if it cant print money

Paul Kersey's picture

"Who Will Trump Pick As Next Fed Chair?"

The choice will be made by Trump's Goldmanite advisors; Mnuchin, Cohen, Kushner, Bannon and Scaramucci, with the aid of Ross from Rothschild.

Uchtdorf's picture

Correct. And thus there will be no improvement for the little guy.

Uzda Farce's picture
Uzda Farce (not verified) Paul Kersey Jan 11, 2017 5:02 PM

John Taylor and Glenn Hubbard are members of the Rockefeller/CFR. So far, every Fed chairman since WW2 has been a CFR member. Goldman Sachs is a "founding sponsor" of the CFR, and Lloyd Blankfein is a CFR member. See member lists at cfr dot org.

Kevin Warsh is a member of the Bilderberg Group. He is also a member of the Group of 30, along with CFR members Volcker, Bernanke, Geithner, Rogoff, and Summers:

http://group30.org/members

lil dirtball's picture

>I like that.

Yes, I'm sure you do, Freeper (have you ever been there? You'd like it also.). You could discuss all day the color of powder coat you'd like on your chains. As long as the color is agreeable and something is on TV, a nice 8ft run would be fine.

Mentioning sincerity and Ron Paul in the same sentence tells me what a putz you are.

Inb4: "We won, 15 weeks."

'cause that's all you got. Lol.

Twee Surgeon's picture

If we can't have Ron Paul I want Pak-Man, he will eat all the wiring, or Nobody, Nobody would be good, They could just Screw the big fancy doors shut and let a free market economy evolve and let Global National Economies evolve in peace. We would have flying cars, full employment, full medical coverage for all and a gold plated pistol on every hip. Real News, Interesting movies. Hope. Do you remember hope ?

George Clooney, Barbra Streisand and Madonna and Cher would all move to Canada for real this time, how sweet it would be.

holmes's picture

We need a real hard money guy. I say William Devane for Fed Chair.

Boris Badenov's picture

Don't you know that the President does NOT pick the nominees? He only picks from the shortlist he is given by The Fed itself. This article is a waste of space.

simjojim's picture

Where's Ron Paul?

NewHugh's picture

You beat me to the punch! Ron Paul pleeease!!!

Econogeek's picture

Jim Grant is the only really good choice.  All others are on the B team. 

Invinciblehandaxe's picture

back to gold standard? lool they all would be eradicated kennedy style before next morning

MEFOBILLS's picture

On the first day of war, gold standards in the past were shown to be false.  A false standard.

Gold had bank credit riding on top of gold in a 10 to 1 ratio.

Since the ratio was always a fiction, the actual amount of credit exceeded gold by a large margin.

When Lincoln needed money to prosecute civil war, the banker wanted extreme usury for their "credit."  And of course, the didn't have the gold to make the credit, and were exposed as liars.

Same with Britain on the Eve of war, the gold money system collapsed.  During the great depression, gold in america went off and hid, and waited out the producers of goods and wares.

Capital and capitalism are happy with gold, as it is depressionary.  It goes off and hides at the moment an economy has any sort of stress.  It is shiny and doesn't rust, ergo is must be magick!  Once prices are driven down, capital can rush in and buy up industry cheap.

Money's true nature is law.  Putting your faith in metal makes you what?  

There was only one good metal money system in history that I can discern, and that was the Hanseatic league.  They used the law to demonitize and then re-issue coins.  In this way, they got gold coins out of hiding.  Also, they would use census - pay census fee with a coin - which was another way of increasing circulation, to then increase economy.  Hansa (germany) did not have bank credit riding on top of gold.

The post bretton woods gold trading standard (international trade) worked well up until deficit spending on Vietnam war.  The law wasn't codified strongly enough to prevent this gold system collapse.

layman_please's picture

interesting. can you point to a good source about Hanseatic league money system?

BabaLooey's picture

Fisher?

Fuck that douche.

Hubbard?

Jesus H. Inside Job Christ - FUCK no.

Now, Ron Paul- with a tanker truck of gasoline and a match.............agreed.

Trump has to be careful here. His choice will signal his overall policies.

We know he proclaims himself "the king of debt."

Rick Santelli would shake the shit out of the liberal tardish. I hope Trump really FUCKS with the left losers on this one.

GreatUncle's picture

Looked at the three photo identikits ... 2 on the right look like weasels so not them.

But is the other one a weasel in disguise?

samjam7's picture

It's not Trump making that call, he'll have to nodd it off that's all. Or haven't we learned anything in here on who controls the FED?

DeeZ_nutZ's picture

I thought the trumpon was like - yeah, let's drain the swamp, audit the fed and all other tweety shit.

so, nothing changes?  he ain' gonna drain shit, motherfuckers, he is one of them, except for his is a stupid fuck and runs his big tweeter account too much.

Twee Surgeon's picture

Trumpon ? Yikes you are just a letter away from a true story. https://www.youtube.com/watch?v=aZc_50n-GLc

Stu Elsample's picture

"""so, nothing changes?"""

No darkies are being given the job solely because of their skin color......that is a huge change from the "pay YT back" nigger boy's day

GraveDancer's picture

It doesn't matter. Fiat collapse is inevitable and with it will go down the mighty dollar!!

Globalists of which US Intel is a part are engineering world war 3 to blame it on Trump!

The Road to World War III

https://www.amazon.com/Road-World-War-III-anti-Freedom-ebook/dp/B01MT31A...

max2205's picture

I doubt markets will be free of intervention.  Up up up some moar 

HoserF16's picture

He'll pick who ever he's "TOLD" to pick. I'm sure Kissinger, on the behest of the Rothschild's, gave Trump a list of who will sit where in his administration.

sessinpo's picture

It matters not. The dollar will die and the FRB system should have been dead along time ago. Too late.

TeraByte's picture

Abolish the entire FED rubbish.

heuvosYbacon's picture

Well, now, here we are now talking about a different thing to "drain the Swamp!".

This here is killing all the gators. And the snakes. it's swampo-cide.

What you are talking about is dead reptiles, as far as the eye can see, all the ways up to DC and beyond.

Now you tell me, how is one Orange Clown going to kill all them reptiles?

Will he click his fingers and say' "Die, you big nasty gators!"? Whereupon they will all up and die?

If the Orange Prince is to lead the GREAT UNWASHED to victory, it is going to take blood and iron.

Go get your pick fork, we can form up out front of HH's house.

 

Scrubbing Bubblez's picture
Scrubbing Bubblez (not verified) Jan 11, 2017 7:15 AM

The Fed Head has always been a Jew and Trump is surrounded by them. They will make sure the next one is also a Jew.

swampmanlives's picture

That's because Trump is backed by the heavily pro-Israel, Breitbart News.

Scrubbing Bubblez's picture
Scrubbing Bubblez (not verified) Jan 11, 2017 7:17 AM
Trump Presidency Stillbirth: McCain, Intel Chiefs Say “Trump Owned”

http://www.veteranstoday.com/2017/01/10/trump-presidency-stillbirth-mcca...

..........Most in the intelligence community have had a simplistic view of Trump, brought from obscurity by Mafia head, Roy Cohn, who helped Trump build his empire. Cohn, former counsel for Senator Joe McCarthy, by the late 1970s took over running organized crime in New York, the real “don” of the real mob. Trump was a “mob associate”, capable of laundering cash through his flagging empire of failed tenements.

Trump was always owned by New York’s organized crime, the Kosher Mafia and their strong ties to Israel’s right wing Likudists. These were Trump’s real associates, including the Kushner family. Trump’s expected moves would have been against Russia in both Ukraine and Syria, in support of the Kushner/Likudist bloc that backs Israel’s expansion.........

BabaLooey's picture

Take your "veterans todays" tard site and shove it up Canks bung hole.

indygo55's picture

Really! VT has gone to the dark side, almost suddenly when Trump surfaced in the campaign. Even the commenters have been outraged. Many, like me don't read that BS anymore. Its way too "fake" for me now.

 

 

dexter_morgan's picture

VT?  LOLOLOLOLOL a step below CNN and thats not easy

BTC is gold's picture

LOL, Glenn Hubbard. That would be fail. Have you seen The Inside Job movie ??

lester1's picture

Return to the Gold standard baby !!

rent slave's picture

Glenn Hubbard was one hell of an infielder for the Braves back in the 80's,though.

FreeShitter's picture

It will a member of the tribe of course. 

Stu Elsample's picture

please...anyone but a token negro, or a woman

overmedicatedundersexed's picture

for Fed chair: Tyler Durden..

lakecity55's picture

For heaven's sake, don't pick a kike.