Donald Trump, real estate billionaire mogul and GOP frontrunner, warns that the stock market bubble is about to burst, which could plunge the United States into a recession. A recession is likely to happen sometime during the next president’s four years (SEE: Economists say odds of a U.S. recession likely in 2016), and it would immediately have an effect on the incumbent’s approval ratings.
Trump believes Federal Reserve Chair Janet Yellen is attempting to keep President Obama from leaving the White House during a recession. He accused Yellen of doing this by leaving interest rates near zero to help prop up the economy. Trump isn’t the only person to present this case (SEE: Peter Schiff: Federal Reserve won’t hike interest rates to ensure Democrats win White House), though many financial experts say the U.S. central bank will raise rates sometime this year.
Speaking in an interview with The Hill, Trump argued that Yellen is “keeping the economy going, barely,” and the country is on the path towards an economic collapse.
“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.”
The Republican frontrunner criticized Dodd-Frank, a piece of legislation that Democrats say is essential to protecting taxpayers. Trump called it “terrible” and promised to repeal it because the federal regulators are running the financial institutions, which are then frightened of the regulators. This wouldn’t be so bad, says Trump, if the banks weren’t the ones lending money to businesses and consumers, but they are.
Although he didn’t say it was a direct cause, Trump noted that the country has both Dodd-Frank and a financial bubble. He alluded to social media and tech companies and their billion-dollar initial public offerings (IPOs), though they haven’t made any money (SEE: June the biggest month of IPOs since dot-com bubble in Aug. 2000 – is a crash imminent?).
Donald Trump Leading the Polls, Tied With Clinton
Trump is still on top of the polls, and has even essentially tied with Clinton. His lead in the Republican field remains strong, though Ben Carson is making significant gains.
He is now in a huge battle with the retire neurosurgeon. The national average suggests Trump maintains a 4.3 percent lead over Carson with 23.4 percent and 19.1 percent, respectively. However, Trump maintains a tremendous double-digit lead over the rest of the field, with the closest being Florida Senator Marco Rubio (9.9 percent) and former HP CEO Carly Fiorina (8.3 percent).
Screenshot via Real Clear Politics.
In a head-to-head matchup with Clinton, Trump has really done well in the last few months. At the beginning of the summer, Trump was down by around 20 points, but now he only trails Clinton within the margin of error (1.3 percent).
Fiorina is the only GOP candidate to lead Clinton, but it’s also within the margin of error.
As candidates like Rand Paul, George Pataki, Chris Christie, Rick Santorum and Lindsey Graham barely registering, the matter of who will drop out next should be interesting. Media reports suggest Paul is the likeliest of candidates to step down and just focus on his contentious Senate reelection bid.
The next GOP debate will take place Oct. 28 and hosted by CNBC.
–AM
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