Trump & the Fed: US Shadow Bankers About to Deepen Control of US Economy
Publisher: Counter Punch
Date Written: 26/01/2018
Year Published: 2018
Resource Type: Article
Cx Number: CX22537
What's sometime referred to as 'shadow bankers' have been running the economy and drafting US domestic economic policy since Trump took office. 'Shadow' banks include such financial institutions as investment banks, private equity firms, hedge funds, insurance companies, finance companies, asset management companies, etc. They are outside the traditional commercial banking system (e.g. Chase, Bank of America, Wells, etc.) and virtually unregulated. Shadow banks globally now also control more investible liquid assets than do the world's commercial banks.
Shadow Bankers On the Inside
In the US, shadow bankers from Goldman Sachs, the giant investment bank, took over the drafting of US economic policy when Trump took office. (Trump himself, a commercial property speculator, is part of this shadow banker segment of the US capitalist elite). Running the US Treasury is ex-Goldman Sacher, Steve Mnuchin. On the 'inside' of the Trump administration is Gary Cohn, chair of Trump's key advisory, 'Economic Council'. Together the two are the original drafters (which was done in secret) of the recent Trump Tax cuts that will yield a $5 trillion windfall for US businesses, especially multinationals. (More on this in my forthcoming article, to be posted here subsequently).
Mnuchin is leading the charge for the Trump deregulation offensive, especially financial deregulation. Mnuchin recently took the offensive as well with public statements indicating it was US policy that US dollar exchange rates remain at record low levels. Why? To ensure US multinational corporations' offshore profits are maximized when they convert their profits in local currencies back to the dollar, before they repatriate those profits back to the US at the new lower Trump tax rates (12% instead of 35% repatriation tax rate) and, even more lucratively, when they pay no taxes on offshore profits virtually at all starting 2019.