Trump Has Exposed the Fragility of the Global Dollar System
Trump Has Exposed the Fragility of the Global Dollar System
What caused Donald Trump to walk back on many of his tariffs last week was not domestic pressure but a run on the market for US Treasuries led by large institutional savers. If US debt is no longer a safe asset, then American hegemony is also at risk.
Trump Has Exposed Exploited the Fragility of the Global Dollar System
Trump Has
ExposedExploitedCreated the Fragility of the Global Dollar System in order to exploit it at the expense of the United States' long-term economic prosperity
I think you're wrong: the problem in the US is that the dollar is far too strong in relation to industrial output. The reason for this is that it is bought by other nations as a reserve currency through US government bonds.
This is a major problem for the US industry, which is nowhere near as strong as the strength of the currency would suggest. The problem is that a disproportionately strong dollar makes US products so expensive on the global market that they are barely competitive.
Trump's plan (described in the so-called "Mar-a-Lago Accord") now envisages forcing the partner states in particular, all of which are creditors of the USA, to suspend their claims (basically as if it were a national bankruptcy).
The only two explanations for this behavior I can come up with are: Either the US is actually bankrupt and Trump is trying to forestall the inevitable, or he is trying to impose an economic system on the world that favors the US even more than it already does, in an excess of hubris.
Either way: I believe that neither of the "solutions" for these two scenarios are realistically feasible with this plan. And I also don't think that the Fed will go along with this, without which Trump cannot implement this plan - but he can't force the Fed to play along either because he has no direct control over this institution as it is independent of the state administration.
TLDR?, The US is bankrupt or nearly bankrupt and Trump is trying to convince the rest of the world to foot the bill?
The only two explanations for this behavior I can come up with are: Either the US is actually bankrupt and Trump is trying to forestall the inevitable, or he is trying to impose an economic system on the world that favors the US even more than it already does, in an excess of hubris.
Really? You really don't think "sow chaos in order to pump-and-dump the entire economy in order to enrich himself and his cronies in the short term, everybody else be damned" is within the realm of possibility? Or, Hell, even "intentionally crash the US economy at the behest of Putin," for that matter?
Oh, absolutely. I am totally convinced that Trump's main goal is to line his own pockets and those of his criminal friends.
I was merely trying to reflect what Trump's official plan is - especially in light of the fact that the US economy actually does have some problems. These include among other things steadily rising interest payments to creditors and the strong dollar, which has very obviously been at odds with weakening industrial production for quite some time.
However, the Mar-a-Lago Accord (not an accord yet by the way but merely a strategy paper) was drawn up by his main economist, Miran. This guy is apparently convinced that the problems that the US economy has could be solved in this way.
But still: even if Trump wasn't a criminal who is only interested in his own advantage, I still don't think his economist's plan could work. Even without Trump, this would be pretty absurd. But with Trump I think it is impossible, because this moron even makes it worse - for example by not introducing the tariffs gradually as planned, but immediately at the maximum percentage (prolly to make more on insider trading). This is disastrous even in the context of this already crazy plan.
So in short, Trump's economists want to fundamentally reshape the global economy (by pure force) with a pretty absurd plan - but Trump's greed and stupidity makes it even less likely that this could ever work.
Oh, and: In any case, all of this is very much at the expense of US citizens - except for the usual 1 percent, of course.
Edit: Probably a misunderstanding: I didn't mean that you were wrong about Trump jeopardizing the long-term prosperity of the US economy - I completely agree with you. I just wanted to say that the US economy was indeed already fragile before him, but that's not because of Biden, but because of a long-term development that led there.
Fair enough!
That said, as a general principle I don't think it's all that useful to talk about what Trump and his cronies (accomplices? co-conspirators? henchmen? whichever has the worst connotation) claim is the intent of their plans. Instead, we should relentlessly redirect the discussion back to what they actually do. People need to understand what's actually happening and stop giving them undeserved benefit of the doubt.
