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Controversial General Political Discussion
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At the same time the Dollar being the reserve currency hurt US manufacturing and thus middle class, see Triffin Dilemma. And both Covid and especially the Ukraine war spooked the national security guys because it revealed that the US is reliant on especially China, ironically even for low to mid level arms e.g., artillery shells, for a possible war with China...
And to be fair, the trust in the US dollar has been eroding since GFC, since then global reserves in USD and US treasuries have dropped from around 80% to now around 55%, with the EURO and RMB rising in return.
The transition from the Pound Sterling to the US dollar did not trigger a recession either but to be fair, different times...
The playbook of the Trump administration btw, at least so far, can be more or less understood with a paper by the chair of the council of economic advisors of the administration, Stephen Miran, https://www.hudsonbaycapital.com/do...o_Restructuring_the_Global_Trading_System.pdf
Whether Trump himself understands everything outlined, one can doubt, but the team around Bessent certainly do, but it´s gonna be a tight rope to walk on.
And to be fair, the trust in the US dollar has been eroding since GFC, since then global reserves in USD and US treasuries have dropped from around 80% to now around 55%, with the EURO and RMB rising in return.
The transition from the Pound Sterling to the US dollar did not trigger a recession either but to be fair, different times...
The playbook of the Trump administration btw, at least so far, can be more or less understood with a paper by the chair of the council of economic advisors of the administration, Stephen Miran, https://www.hudsonbaycapital.com/do...o_Restructuring_the_Global_Trading_System.pdf
Whether Trump himself understands everything outlined, one can doubt, but the team around Bessent certainly do, but it´s gonna be a tight rope to walk on.
Donald Duck himself understanding things is big question here lol ? If you don’t live in his universe they’ll cast you out like they did to his first buddy Elon when he asked to remove tariff for his Tesla car .
https://x.com/atrupar/status/192777.../trump-taco-meaning-nickname-origin-meme.html
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Bro stop this dem or repub stuff , all are wolf in same pack . You should clearly see what happens when an incompetent man child is running this world economy lol .
Putin and Xi are laughing at him they don’t even take him seriously at this point .
https://x.com/atrupar/status/192777.../trump-taco-meaning-nickname-origin-meme.html
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Bro stop this dem or repub stuff , all are wolf in same pack . You should clearly see what happens when an incompetent man child is running this world economy lol .
Putin and Xi are laughing at him they don’t even take him seriously at this point .
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As you said, it's going on for a quite a time now.
However, trump actions are fastening the process. Dollar based economic sanctions mean it's being used as a weapon. Such hard hand approach is making countries shift to other means....Faster
Economic tariffs aren't going down well too.
Will it lead to recession or depression? Hard to say- one factor cannot trigger recession and shift from dollar would still take years, if not decades and even then many countries would still be relying on US dollar due to US geopolitical and economical influence.
But, it might trigger some issues for US - borrowing cost would increase ----> interest rate would increase -----> inflation ------> reduce consumer spending -----> reduce government spending -----> volatile primary and secondary market -----> growth slow down.
But, the worse thing that might happen is reduce global financial and geopolitical clout which USA has right now. This would be the biggest blow
However, trump actions are fastening the process. Dollar based economic sanctions mean it's being used as a weapon. Such hard hand approach is making countries shift to other means....Faster
Economic tariffs aren't going down well too.
Will it lead to recession or depression? Hard to say- one factor cannot trigger recession and shift from dollar would still take years, if not decades and even then many countries would still be relying on US dollar due to US geopolitical and economical influence.
But, it might trigger some issues for US - borrowing cost would increase ----> interest rate would increase -----> inflation ------> reduce consumer spending -----> reduce government spending -----> volatile primary and secondary market -----> growth slow down.
But, the worse thing that might happen is reduce global financial and geopolitical clout which USA has right now. This would be the biggest blow
If you think that eroding trust on the US dollar is gonna magically turn us into a manufacturing super power then you need to chill on the cool aid. That takes years and years of investment and actual industrial policy. I'm not gonna listen to a bunch of retards that define a trade deficit as an inherently bad thing. If you want to pay double on consumer goods from walmart then be my guest, I for once would like not to spend 300 bucks every time I go to the supermarket.
Yep but it´s by design, to a certain extent at least because they have a bigger priority, decoupling from China and rebuilding the industrial base, obviously not for cheap consumer products (those will continue to be produced in India, Vietnam, Bangladesh...) but things that matter for emergencies, conflicts and so on have to be produced in the US.
I think Trump overshot with his declaration beginning of April, but using tariffs and shifting into a multipolar world and financial system, Bessent has been talking about that the last 18 months for example.
Whether they will be able to do it, different topic, but first step is understanding that they are doing it, and most fail at that step already.
It´s mathematically impossible to continue the current way.
Either they have to default (hence Bessent underlining just yesterday, "US will not default on its debt" to reject that possibility...,) or inflate it away which is more likely.
I think Trump overshot with his declaration beginning of April, but using tariffs and shifting into a multipolar world and financial system, Bessent has been talking about that the last 18 months for example.
Whether they will be able to do it, different topic, but first step is understanding that they are doing it, and most fail at that step already.
It´s mathematically impossible to continue the current way.
Either they have to default (hence Bessent underlining just yesterday, "US will not default on its debt" to reject that possibility...,) or inflate it away which is more likely.
I can agree that the approach could be intentional to decouple from China and rebuild manufacturing base.
But the factors such as shift from dollar on which USA is banking upon are highly volatile in nature. It's possible to lose control over the transition which would be devastating.
First, the approach in itself is a problem.... top down approach... Structural changes can't be forcibly imposed upon as it often doesn't go down well and results in dissent and resistance.
Using inflation to make debt cheaper could work in short term, but if US dollar and bond lose value , borrowing costs would increase.
Fed then, has to raise interest rate and it would end up making paying debt costly, something which USA wants to avoid in the first place. And, inflation won't even help in case of short term debts as they are inflation indexed anyway.
Moreover,if inflation gets coupled with economic slowdown, then we will have low savings ------> low investment.
As far as manufacturing is concerned, even after all this, USA might not be able to attract companies to manufacture in USA for multiple reasons
High labour costs and strict labor laws + Companies priorize profits which would take a hit if they shift to USA + US would still be import dependent for raw materials.
And, in case of inflation and reduced trust in dollar, investment is bound to take hit as well..... which means less manufacturing
Not to mention, threatening big firms through sanctions and tariffs will only pave way for them to relocate to other places.
And, it's just not this, he's creating an ecosystem which might not even able to attract smart workforce, let alone investment to manufacture
Trump intent might be right but the way he's handling and imposing things....it might result into a blunder.
But the factors such as shift from dollar on which USA is banking upon are highly volatile in nature. It's possible to lose control over the transition which would be devastating.
First, the approach in itself is a problem.... top down approach... Structural changes can't be forcibly imposed upon as it often doesn't go down well and results in dissent and resistance.
Using inflation to make debt cheaper could work in short term, but if US dollar and bond lose value , borrowing costs would increase.
Fed then, has to raise interest rate and it would end up making paying debt costly, something which USA wants to avoid in the first place. And, inflation won't even help in case of short term debts as they are inflation indexed anyway.
Moreover,if inflation gets coupled with economic slowdown, then we will have low savings ------> low investment.
As far as manufacturing is concerned, even after all this, USA might not be able to attract companies to manufacture in USA for multiple reasons
High labour costs and strict labor laws + Companies priorize profits which would take a hit if they shift to USA + US would still be import dependent for raw materials.
And, in case of inflation and reduced trust in dollar, investment is bound to take hit as well..... which means less manufacturing
Not to mention, threatening big firms through sanctions and tariffs will only pave way for them to relocate to other places.
And, it's just not this, he's creating an ecosystem which might not even able to attract smart workforce, let alone investment to manufacture
Trump intent might be right but the way he's handling and imposing things....it might result into a blunder.
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Yep, it certainly can be shaky, hence why Trump´s first visit was to the middle east, securing the financially most viable partners as soon as possible.
Bessent has been going around and underlining that Wall Street had good times the last 4 decades but it´s time for "main street".
Personally I don´t think it´s just pretend, even if it might not be the main motivator for doing so (more like the trade deficit and critical supply chains are) but he does not only say it to the media but also to wall street directly.
I think they are also counting on AI, robotics etc., maybe too much, but Elon and the other tech bros are close to the government for a reason...
But stuff like medicine, artillery shells etc., can be produced by highly automated processes, so at least in this regard it´s not far-fetched.
Bessent has been going around and underlining that Wall Street had good times the last 4 decades but it´s time for "main street".
Personally I don´t think it´s just pretend, even if it might not be the main motivator for doing so (more like the trade deficit and critical supply chains are) but he does not only say it to the media but also to wall street directly.
I think they are also counting on AI, robotics etc., maybe too much, but Elon and the other tech bros are close to the government for a reason...
But stuff like medicine, artillery shells etc., can be produced by highly automated processes, so at least in this regard it´s not far-fetched.
It's definitely not a pretend.
If I have to sum up US actions recently then goal is very clear:
Trump is trying to reposition the US from being the global economic enabler which costed them alot to being a strategically self-reliant superpower, even if it means breaking existing world order.
US is trying to become a self - reliant economic fortress which engages with the World at it's own self - reliant terms.
In short term, this path would definitely lead to chaos and hardship. People will struggle and resistance would mount from both within and outside the US.
But, tbh, the fundamentals of US economy are strong enough to overcome this.
It's the transition where real catch lies and where I feel Trump hard hand approach could become a massive problem.
He's forcing it down like kind of shock therapy instead of gradual transition and we all know what happens with such approach especially when he's not enjoying public support at that scale....big firms can't be coerced and pressuring them could lead to relocation, allies would be alienated with hardly any room for error.
His path is high risks, high gains
And, considering how he doesn't enjoy that much public support - I really feel he should tone down his approach - not path but approach to accomodate concerns
If I have to sum up US actions recently then goal is very clear:
Trump is trying to reposition the US from being the global economic enabler which costed them alot to being a strategically self-reliant superpower, even if it means breaking existing world order.
US is trying to become a self - reliant economic fortress which engages with the World at it's own self - reliant terms.
In short term, this path would definitely lead to chaos and hardship. People will struggle and resistance would mount from both within and outside the US.
But, tbh, the fundamentals of US economy are strong enough to overcome this.
It's the transition where real catch lies and where I feel Trump hard hand approach could become a massive problem.
He's forcing it down like kind of shock therapy instead of gradual transition and we all know what happens with such approach especially when he's not enjoying public support at that scale....big firms can't be coerced and pressuring them could lead to relocation, allies would be alienated with hardly any room for error.
His path is high risks, high gains
And, considering how he doesn't enjoy that much public support - I really feel he should tone down his approach - not path but approach to accomodate concerns
All-in ! My bet is on Bolsonaro !
Let's get rich baby
Bye bye Lula :hapnoel:
I need money and I can see a sign there ! HxH parallels should work better than Simpsons parallels
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also, no there is no HxH news.
At the end of the day, politicians always are far better off than the average joe.
