Elon Musk wants Donald Trump to control the Federal Reserve
I love how the GOP freak out over immigrants, Big Tech, or the economy yet they don't see the problem with a South African-born tech mogul having influence over the nation's central bank.
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Abolishing The Fed Would Be the Most Dramatic Upheaval Imaginable
Abolishing the Fed would dramatically change the entire U.S. financial system — in practically unfathomable ways. It starts all the way at the top, with our central bank system.
“America’s central bank manages the money supply and sets the key interest rates that are necessary for economic stability,” said Mike Fahey, CEO and founder at Fahey Communications, a PR firm specializing in politics and crisis communications that ran several high-profile campaigns in the past election cycle.
“It’s obviously very hard to imagine a Federal Reserve-less America, since the Fed has been around since 1913, and most of us were taught in school that it is under the auspices of the Fed that we have a relatively stable economy,” Fahey said.
Abolishing The Fed Would Mean Uncertainty and, Possibly, High Inflation
In a Fed-less nation, we won’t have monetary policy tools in places to stabilize prices. Therefore, we could see inflation volatility increase.
“For household budgets, this could mean any number of things — substantial payoffs among them,” Fahey said, “The first is that everyday borrowing could become more expensive. Rates of interest on things like mortgages, car loans and credit cards seem likely to rise not only on average but also in their variance, with payments shooting up more often and more dramatically.”
That, Fahey said, is “on the secure side of things.” On the non-secure side of things is the uncertainty that will arise with our bank accounts.
“Bank accounts could become a lot more uncertain without the Fed watching over them and ours coordinating a deposit insurance program,” Fahey said.
More Bank Crises Could Happen
Without the Fed, there would be no central authority to control the national money supply, which means banking crises could become more common. This is because they’d be without “a deep-pocketed entity to provide emergency funds,” said Michael Ashley Schulman, founding partner and CIO at Running Point Capital Advisors.
The US Dollar Could Destabilize and National Debt Could Go Into Default
Additionally, the U.S. dollar’s value could destabilize, “weakening its global dominance,” Schulman said. “Additionally, the government might face higher borrowing costs, risking default on national debt.”
The Stock Market Would Take a Huge Hit
Economic chaos at any level can send the stock market into a tizzy. The abolishment of the Fed would be the most chaotic thing imaginable, so, surely, the stock market would go haywire.
“In a hypothetical scenario in which the Fed was abolished, the initial shock would likely hit the stock market affecting every investor out there,” said Bryan M. Kuderna, founder at Kuderna Financial Team.
The Fed Will Almost Certainly Not Be Abolished (at Least, Not Anytime Soon)
So, what’s next? Will the Fed be abolished? It’s terribly unlikely. Or, rather, it’s terribly unlikely that it will happen anytime soon.
“Critics of The Federal Reserve, even some prominent ones, have not come close to mounting a serious threat to the Fed’s existence,” Fahey said. “And for good reason; abolishing the Fed would take huge legislation, would journey through enormous resistance both in the financial sector and among various economists and Congress, and would likely encounter a presidential veto along the way. The Fed is simply too well entrenched, too widely supported in the general idea, if not the specific way it operates, to be abolished anytime soon.”
https://www.gobankingrates.com/money/economy/elon-musk-supports-abolishing-federal-reserve-what-that-could-mean-for-your-wallet/?utm_term=source_link&utm_campaign=1291017&utm_source=yahoo.com&utm_content=17&utm_medium=rss