Interesting read trying to make some sense of this admin economic policies. drive down the value of dollar crash economy to get lower interest rates use lower rates to refinance debt to offset money given to billionaires in tax cuts but he can't control the fed, and he can't control the bond market. so he just breaks things as he tries to threaten the fed Opinion: Here’s the real reason Trump wants to create economic chaos — and why investors should be more afraid - MarketWatch The use of “accord” deliberately echoes the so-called Plaza Accord signed by the U.S. and other major world governments at New York’s Plaza Hotel in 1985 — two blocks from Trump Tower, as it happens — to end another period of U.S. dollar overvaluation. But there are a couple of major differences this time around. First, nobody so far has signed anything. There is yet no Mar-A-Lago Accord. Second, there may never be one. With the Trump administration, unilateralism is a feature, not a bug. For better or worse Trump is trying to bring down the dollar through turmoil. If anything, we should talk about the “Mar-A-Lago Discord.” Where will it lead? Place your bet. One of my go-to gurus this week, after begging me “find a way to quote me so that I won’t get murdered in the streets,” said Trump was successfully bringing on a U.S. economic recession both to plunge the dollar and to bring down long-term interest rates. This, he added, was critical to passing his big tax cut bill. The U.S. government cannot afford to finance its massive deficits and enormous national debt at current interest rates. “Trump and the Treasury Secretary want yields down in a recessionary chaotic environment to justify passing their tax plan,” he says. “It does appear that he needs chaos to get his tax plan passed.”
seems pretty click bait-y to me. The premise that he needs these things to get tax cuts in not well founded IMO. & the idea that he has a coherent strategy is even more of a stretch. As of now Trump's policies have the potential to increase inf in the short run & slow growth in the long run which should have somewhat off setting effects on yields.
he doesn't have a strategy but whoever is making the plans seems to have one, not sure it is coherent or not, but someone has a plan and seems to be trying hard to push it through regardless of the legality or the damage
I don't think that he wants to drive down the value of the dollar to refinance the debt. If Trump's strategy is to devalue the dollar and I do think it's a real possibility it's to make US exports more competitive and imports more expensive. If he does succeed double digit inflation is a virtual certainty.
which is the paradox. they seem to think that if the economy crashes, the fed will cut rates to stimulate the economy and ignore their inflation mandate. makes no sense to do what they are doing unless it is all a big short, crash it all, cash in on your short, let it come back closer to the next election
I don't see any scenario where inf hits double digits. my prediction for 2025: 10 year yield will end at 4.1% & inflation will avg 3%.
Trump is undoubtedly the most economically ignorant president in my lifetime and Dwight Eisenhower was the first president that I recall although I didn't find out about his economic policies until years after he left office. I would add that unlike current Republicans Eisenhower was an actual fiscal conservative who believed that the budget should be balanced even if it meant high taxes on the wealthy.
I wonder how this affects the "strategy" to devalue the dollar....I've no clue. Trump-backed crypto bank joins stablecoin wars with new dollar-pegged token The company said Tuesday that the stablecoin, dubbed USD1, will be pegged to the U.S. dollar and be backed by short-term U.S. government treasuries, U.S. dollar deposits, and other cash equivalents. It will soon go live on the Ethereum and Binance Smart Chain networks. “USD1 provides what algorithmic and anonymous crypto projects cannot — access to the power of DeFi underpinned by the credibility and safeguards of the most respected names in traditional finance,” said World Liberty Financial co-founder Zach Witkoff. “We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions.”
This seems most likely. Get the crash in now. Make bank on the way down and on the way back up. Have things "back" by 2028.
