When the President ‘Low Price Guy’

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Trump loves lower interest rates. And really really indeed Wants a low-grade boy in the federal reserve. Like Claire Jones reported at the base the weekend.

Donald Trump said that only the Central Bank called on the borrowing costs to increase the cost of 1 percent, it will choose a new Federal Reserve Chair to reduce interest rates.

Haven’t seen this movie before?

No, it is not a movie.

May be sure classes President Erdogan’s decadal Dalliance tried to reduce interest rates in Turkey, and this is due to inflation rates that cause the country’s growing inflation rate.

But our thoughts went to the drama around the birth of a modern nutrition in 1951. The story spoke with Gusto by A Robert Hetzel and Ralph Leach Stone of the narrative account 20 years ago. When readers serve everything by reading everything, we later removed some points known as a treasure-nutrition chord.

After the United States entered WWII, inflation concerns were placed in favor of national security. Short-term interest rates were caught 0.375 percent and Income curve control was carried out – with a lid in a 2.5 percent range of length.

However, short interest may be – and if it was removed in 1947, the US treasury leads the fed’s pan to a more long-term bond product. This was a spiritual question to protect the market value of war bonds purchased by Patriots for President Truman (he was caught When France has returned $ 100 to $ 100 to $ 100 for $ 100).)

The Federal Reserve Council was not happy. Because after the initial postwar bust, inflation was re-booked again.

The Fed wanted to raise short rates, but the 2.5 percent bond productivity cap seriously violated the ability to do it. The higher short ratios were asked to force the fed to protect the lid, when the market wanted to sell more long-term bonds. All this is – they settled – managed inflation.

But at that time, the monetary policy was still in the hands of the President and the US Treasury. This was a charming tool to use the Korean War eruption in the 1950s, as Hetzel and Leach noted:

Truman had attractive reasons to freeze interest rates. On January 25, 1951, salaries and prices have freezing their farm prices. The debt costs, especially in home mortgages, fleet salaries were poison. More important, in January 1951, Truman faces the possibility of World War. . . Truman and (Treasury Secretary) Snyder wanted to stop the value of financing the cuts of the cuts will be made of the wider war.

As the war increased in Korea, consumers hurried to buy goods, increase commodity prices and have a CPI inflation – in February, in February 21 percent. Yikes.

Therefore, Truman, only fed McCabe, but during the national crisis, all the Federal Open Market Committee was banned to surprise the patriotic duties to maintain the confidence of government securities. The White House is followed by a press To declare:

The Federal Reserve Council supported President Truman to protect the stability of government securities during the continuation of the ambulance.

Unfortunately, FOMC did not do such a thing. As for the commitment to continue the proposal of the Treasury, it was one of the few cards to protect social uncertainty. And the Fed Governor Marriner assured Eccles New York Times and Washington Post knew.

Perhaps, not surprisingly, Acrimony, FOMC members were a direct result of the productivity cover in the treasury, which has been further clarified and increasing.

Treasury Secretary John Wesley Snyder took the hospital for a cataract operation in February 11, a formal deputies with the Fed were officially handed over to the Assistant MP, Treasury Secretary William McChesney Martin. The hypothesis (perhaps the training) had to stop the growing crisis over several weeks until the SNYder returned.

However, Martin – only 31 years old became the unity of a financial channel president of more than one NYSE.

Martin Fed and Treasury came to an agreement. This is a spectacular debt exchange with an option of money connected with the money put in the money Exchange for the ability to trade them for a higher coupon Treasures in new cash mode. Somehow still sold the plan to a boss associated with the hospital.

If it sounds like a Fed Wine, it should be drawn against it as a price: McCabe’s resignation as a chairman of the Fed.

Truman could come in her Boy in the Fed – a loyal treasure boy. One who understands his bigger picture. A low-grade boy. Who chose? Why, William McChesney Martin.

The initial reaction of the Fed’s board and employees won the war, but lost the war, in the Central Bank of the United States, “he said.

Low-grade Martin was approved by the Senate on March 21. And in her First open the first He announced:

. . . (U) Settimly inflation is managed, but more serious aggression of enemies outside our borders for the vitality of our country can be more serious. I take hostage to support all acceptable measures to protect the purchasing power of the dollar.

Wait, what? Supine is not a low-grade guy, Martin became a strong defender of the Central Bank’s independence, Expresses the work of the Fed Shaperon who commanded the punch during the party’s really warming to the party. ”

Evaluated and inflation fell (although the long and volatile retardation of monetary policy is that the enemy is completely Martin). ACCORD, where Martin’s engineer is today, is the birth of a modern independent US Central Bank.

How did Truman carry it?

A few years later, Martin met with Harry Truman on a street in New York. Truman looked at him, a word said, “Treacherous” and then continued.

What is the lesson for Trump? Be sure to make a really low-grade guy’s guy’s original, be sure to cancel the Stooge, not a new Martin.