Trump, Warehouser Of ‘Very Large Brain’, Suggests Fed Is ‘Mentally’ Handicapped

Donald Trump, self-declared “very stable genius” and warehouser of one “very large brain”, knows a mentally incapacitated person when he sees one, and the president sees a gaggle of them at the Fed.

Less than 24 hours after telling America the central bank enjoys watching the country’s manufacturers “struggle”, Trump called the Fed “mentally” inept.

“Our Federal Reserve cannot ‘mentally’ keep up with the competition”, he tweeted on Wednesday morning. Trump of course couches everything in black and white, zero-sum terms, which is ironic when it comes to his comments on monetary policy, because by encouraging a global currency war (which is what he’s doing), he is effectively ensuring a zero-sum game, where competitive easing has offsetting effects in the FX market, and serves only to inflate asset bubbles and drain ammunition policymakers may need down the road.

Read more: Here Are The 14 Biggest Problems With Central Banks Being ‘The Only Game In Town’

The president clarified that “the competition” is indeed “other countries”.

He then proceeded to claim that while in France for the G-7 over the weekend, “all of the other Leaders were giddy about how low their Interest Costs have gone”.

I don’t think we have to say this, but that is almost surely a lie. It seems highly unlikely that Angela Merkel and Emmanuel Macron spent the G-7 bragging about the extent to which the ECB has helped drive down EGB yields.

Trump then waxed incredulous that “Germany is actually ‘getting paid’ to borrow money”.

The president was extremely vexed last week at Berlin’s zero coupon 30-year sale which, while historic, was technically a failure.

Read more: Trump Should Envy Germany’s Fiscal Discipline, Not Europe’s Monetary Freak Show

For Trump, the chart below is a travesty of justice, despite the fact that the US is set to run trillion-dollar deficits starting next year, while Germany is so committed to fiscal rectitude that Berlin won’t even borrow at negative rates to counter a recession.

On Wednesday, the average yield at a sale of German 10-year notes fell to a record low of -0.70%, Although it’s not clear if Trump was referencing today’s auction, he did shriek “ZERO INTEREST PLUS!” into the digital void.

Ironically, there is a very solid argument to be made that if you’re looking for the person who is most responsible for pushing yields on German debt as low as they are, you can point to Trump, not Mario Draghi. After all, trade jitters and attendant global growth concerns are one of the main factors in explaining the global “duration infatuation”.

Trump closed out what is likely the first of multiple monetary policy tweets by branding the central bank the “No Clue Fed!”

In a November interview with the Washington Post, Trump explained why he was convinced that his views on the economy are right, and the Fed’s wrong. “They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me”, the president said.