Clearly, Hoover was world’s apart from Trump geopolitically, at war with no other nations, polar opposite how both extremist right wings of the US war party operate today. This article deals only with economic and financial issues.
Hoover had the misfortune of taking office eight months before the October 1929 Wall Street crash, ushering in the Great Depression of the 1930s, followed by WW II when FD Roosevelt was US president.
He failed to heed advice of economist John Maynard Keynes who later gave to Franklin Roosevelt. He urged “spend, spend, spend.” Supply “cheap and abundant credit.”
Focus on “increas(ing) the national output” by stimulative fiscal policies. Boost purchasing power by “put(ting people back to work.”
Back then, the US wasn’t burdened by today’s high debt level exceeding GDP, increasing exponentially because of unsustainable military spending at time when the only US enemies are invented ones.
Trump took office at a late-cycle time similar to excesses of the 1920s, characterized by money printing madness that facilitated speculation on a grand scale.
On August 7, Wall Street on Parade’s Pam and Russ Martens reported that “central banks are in panic mode for good reason,” explaining the following:
The benchmark 10-year US Treasury plunged “a stunning…41 basis points in 8 days (to) 1.65 percent,” down from an earlier in the year yield of over 3%, perhaps heading toward exceeding its past decade low of 1.37%.
The inverted yield curve often signals recession ahead. After a decade of monetary and speculative excess, it’s likely coming, maybe matching or exceeding the October 2007 – March 2009 turmoil.
With short-term treasuries now at a range between 2 – 2.25% after a late July quarter point cut, and the Federal Reserve’s near-$4 trillion already bloated asset portfolio, it has much less ammunition to combat an economic decline than earlier — complicated by a potential perfect storm hitting the economy and financial markets ahead.
The Office of the Comptroller of the Currency explained the following:
Five US too-big-to-fail mega-banks hold an unthinkable amount of derivatives, facilitating speculation, what Warren Buffet once called “financial weapons of mass destruction, carrying dangers that…are potentially lethal.”
Here’s what the five US mega-banks hold in these instruments:
- JPMorgan Chase – $58.7 trillion
- Citigroup – $51.5 trillion
- Goldman Sachs Group – $50.8 trillion
- Bank of America – $37.9 trillion
- Morgan Stanley – $35 trillion
Combined they hold 86% of the amount of these instruments held by 5,000 US banks.