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Trump: Stock Bubble About to Burst, Plunge US Into Recession

Trump: Stock Bubble About to Burst, Plunge US Into Recession
Donald Trump

By    |   Wednesday, 14 October 2015 07:56 AM

GOP presidential front-runner Donald Trump warned that the current stock-market bubble will eventually pop and plunge the nation into another recession.

Trump accused Federal Reserve Chairwoman Janet Yellen of keeping interest rates low in order to shield President Obama from having to leave office during a recession.

“She’s keeping the economy going, barely,” Trump told The Hill. “The reason they’re keeping the interest rate down is Obama doesn’t want to have a recession-slash-depression during his administration,” he said.

The Fed has kept its benchmark rate close to zero for almost seven years. In that time, U.S. stocks have nearly tripled from their financial crisis low. The Fed meets again next month and in December. In its rate decision, the Fed cited low inflation, weakness in the global economy and unsettled financial markets.

But don’t be fooled, Trump warns. The nation is on a path to financial disaster.

 “You know who gets hurt the most? People who practice the American dream and did what should have been the right way — the people that went through 40 years of their life and saved a hundred dollars every week [in the bank],” Trump said.

“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.”

He also slammed the 2010 Dodd-Frank Wall Street reform law as a “disaster” that has hurt economic growth.

“It’s terrible,” he said, vowing to "absolutely” repeal it. “Under Dodd-Frank, the regulators are running the banks,” Trump said. “The bankers are petrified of the regulators. And the problem is that the banks aren’t loaning money to people who will create jobs.”

Democrats have touted Dodd-Frank as essential taxpayer protections put in place five years ago to prevent a repeat of the 2008 financial crisis. The GOP says the 2010 act goes too far.

“We have Dodd-Frank and we’re in a bubble right now anyway,” he said. As an example, he cited social-media companies that he says have initial public offerings worth “billions” but “haven’t even made 10 cents.”

Other prominent economic experts agree with Trump and say the government is to blame for placing the U.S. economy in the fast lane to disaster.

Newsmax Finance Insider Stephen Moore says that Washington doesn't understand what went wrong in 2007 and 2008, so the Fed, the White House and Congress are recreating the very same conditions for another financial bubble.

"If it pops, we could replay the same devastating effects as occurred during the first bubble in 1999 and 2000," he wrote.

"Government and politicians have no learning curve. All of the conditions of financial wreckage are reappearing. This is why congressional Republicans absolutely should put up a fight on the debt ceiling by requiring more budget discipline as a condition of higher debt levels," he advised.

But others disagree.

Billionaire hedge-fund manager Jim Chanos says economic improvement in the last eight years, mostly under the Barack Obama administration, has been “pretty amazing.”

"Of all the major economies right now, we're the place to be," legendary short seller Chanos told CNN. "The strides we've made the last eight years are pretty amazing," said Chanos, founder of Kynikos Associates.

Chanos helped to raise more between $200,000 and $500,000, according to OpenSecrets, for Obama's re-election campaign, CNN reported.

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GOP presidential front-runner Donald Trump warned that the current stock-market bubble will eventually pop and plunge the nation into another recession.
donald trump, recession, stock bubble, economy
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2015-56-14
Wednesday, 14 October 2015 07:56 AM
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