Listen to what Trump says about it. He wants other countries to pay their fair share through the tarrifs and stop taking advantage of America and bring back American manufacturing. And if you assume that he is not lying and means what he says then the only real logical conclusion is that he is an illiterate moron with an understanding of economics that is less than that of a second grader.
The finance YouTubers will have you believe he's intentionally crashing the economy in a 4D chess move to force the Fed to lower rates so that the national dept can be financed at a lower interest rate.
And there's the theory that he's crashing markets so he and his rich friends can buy up things for pennies on the dollar and basically copy paste the oligarch structure that was formed in Russia after the collapse of the Soviet Union.
I think any of the 4d chess theories are pretty dumb. The āthey crash it to buy it for cheapā is particularly stupid. Elon Musk is probably going to end up losing over $100,000,000,000 (if not way more) from this lol. Thereās no way this is going to be net positive for him. The āoligarchsā wealth is in the stock market so crashing it so they can buy things for cheaper is robbing Peter to pay Paul.
The reality is just: Trump isnāt very informed and is stuck in the past. He rightly recognizes that free trade is a race to the bottom that ends with us losing jobs to essential slave labor in undeveloped countries. Buts heās also rash and stupid and belligerent so he canāt intelligently target the worst offenders and instead just indiscriminately tariffed everyone.
TLDR: Trump correctly identifies a problem (that other countries are disinclined to see due to the wealthy not wanting anything to change) but is also a stupid person so he puts forth a solution thatās even
worse.
"He rightly recognizes that free trade is a race to the bottom that ends with us losing jobs to essential slave labor in undeveloped countries."
This is offset by the other longstanding pillar of U.S. foreign policy, which was to encourage democratic governments in all countries. Much harder to race to the bottom if the slave labor can vote.
He rightly recognizes that free trade is a race to the bottom that ends with us losing jobs to essential slave labor in undeveloped countries. Buts heās also rash and stupid and belligerent so he canāt intelligently target the worst offenders and instead just indiscriminately tariffed everyone.
what is the right way to do it, im wondering? i dont get the sense that this even being a problem is widely accepted, let alone that anyone has an idea how to fix it
Wait, you donāt think businesses having the option to pay Bangladeshis 50 cents an hour is a problem for a low skill American worker looking to make a living wage in a similar industry? Come on bro. Would you be cool with us just removing the minimum wage? If not, what is the real difference between paying American workers slave wages vs. paying foreign workers slave wages instead? In a free trade world, there is no difference.
what is the right way to do it
Targeted tariffs on problematic countries and specifically aimed at hitting industries you want to promote back home.
So, imposing a huge tariff on Chinese electric cars might be fine if we were working to increase electric car production here, change our sourcing to get materials from friendly countries, etc. But Trump just put tariffs on everyone and everything. So all he has done is place a 10-40% sales tax on everything imported.
Americans will eventually get this stuff from American companies, but it will take several years to build up the production and, in the meantime, we will all suffer. And so will our allies who we are fucking over for no reason.
Wait, you donāt think businesses having the option to pay Bangladeshis 50 cents an hour is a problem for a low skill American worker looking to make a living wage in a similar industry?
i do, but thats not the sense i get from most of the people talking about the tariffs, they sound to me like they think theres not even a problem worth tackling.
Targeted tariffs on problematic countries and specifically aimed at hitting industries you want to promote back home.
makes sense. we'll see if thats what we end up closer to, or if he really doesnt have a plan to negotiate and just does want blanket fire
And there's the theory that he's crashing markets so he and his rich friends can buy up things for pennies on the dollar and basically copy paste the oligarch structure that was formed in Russia after the collapse of the Soviet Union.
To be honest I'm pretty sure he is too dumb to plan for this kind of things, but the gang around him are not. My guess is they now what buttons to press to influence him towards their designs.
I've never seen anyone as puppified and resigned as don. He has many masters, but based on exactly what he said, his main one runs this giant country on a continent to the east. Those poor russian soldiers!
I am hopeful that everyone on earth sends Zelensky help. Everyone, send your baddest ass mother fuckers and have Zelensky say, fuck your peace plans. We're going to just kill them all.
Trump, start Global Trade War, US Dollar Default with Mar-A-Lago Accords (swap US Treasury Notes & Bonds for zero-coupon 100 year bond that can't be traded) --> US Debt Goes Bye-Bye and US can start manufacturing again once quality of life and the US Dollar are lower than whale shit so we can competitively manufacture cheap stuff. WARNING: Some work may be "Pay Optional" #WINNING
And there's the theory that he's crashing markets so he and his rich friends can buy up things for pennies on the dollar and basically copy paste the oligarch structure that was formed in Russia after the collapse of the Soviet Union.
can anyone explain how theyre gonna do that when their assets are evaporating at the same speed as or worse than the market? what money are they gonna use for this
If their money isn't all tied in assets with fluctuating value, they can directly buy smaller companies. Or they can finance it with their Assets as collateral. even if their billion shares of TSLA fell 40% that's still a big chunk of change that can be borrowed against and used for buying more things at the bottom.
If their money isn't all tied in assets with fluctuating value
but it is.
Or they can finance it with their Assets as collateral.
they couldve done that at higher valuation of their assets, so this is only profitable for them if their assets tank significantly less than the market since they'll be paying a whole bunch of interest.
even if their billion shares of TSLA fell 40%
the above doesnt work then because the whole market didnt tank 40%, but TSLA did.
I honestly thought him trying to manipulate the economy and market would force Powell to adjust rates in time for the US to refi a part of the national debt at a better rate.
I think the basic idea is that cutting interest rates stimulates the economy. It gets people borrowing (because they want to spend!). And the lower interest rates go, the less incentive people have to keep their money tied up in bonds or similar investments.
This is why the Fed used high interest rates to curb inflation. The economy was too stimulated. Raising interest rates was like giving the economy a xanex, to chill it out so prices would quit rising. Then, as inflation has waned, the Fed has able to slowly cut interest rates. But the Fed has to be slow; it has to wean the economy off of the high interest rates it set. If the Fed cuts interest rates too fast, the economy will get hyper-stimulated too fast and inflation will come right back.
Now we get to Trump. As President, he cares about the stock mark and economy. But he also wants his tariffs. His tariffs will hurt the stock market and economy. So he's hoping the fed will cut rates, which might stimulate the economy enough to counteract/balance out his tariffs. In his view, he can enact all of the tariffs without any of the pain if the Fed cuts rates.
That's the gist of it, I think.
There are disagreements over whether cutting rates will counteract the tariffs, and over what the right move for the Fed is, but the bottom line is that Trump thinks interest rate cuts will stimulate the economy, counteracting his tariffs.
the problem, as im sure youve seen plenty of others say already, is that inflation is already elevated. they donāt want to cut rates.Ā
once growth slows to a crawl and inflation is also high, itās very difficult to turn things around. youāve found yourself outside of the normal boom bust yin yang cycle and can easily get stuck that way for years.Ā
Because once you are deep in the only way to get money will be to sign in the military and cross the Canadian border while Don the con friends buy all properties.
The idea of tariffs are to bring manufacturing jobs back. If companies want the US market, theyāll have to have factories here and employ Americans.Ā
Low interest rates make people spend money since why not buy what you want since the price is the same as waiting?
The disagreement is because nobody knows what will happen and they will rationalize their opinion AFTER the fact. There are sectors that tariffs wonāt help.
Low interest rates create a bubble, specially in the housing sector.Ā
They literally can't answer that.
99% of these people hate trump and musk because they're told to and just repeat everything. Guarantee nobody will explain anything to you because they haven't explained anything to anybody, because they have no idea.
Stocks went through the roof last year but the economy was fucked, stocks haven't been connected to the economy in years. That's not even a political statement, it can be observed just by looking at the data.
I have no idea, but to say he's intentionally going to cripple everybody is straight up fucking retarded.
What would he gain? Gets richer? Where's he going to spend the money when everybody's destitute?
You're a political pundit and don't even realize it, you belong behind Wendy's.
If FED rates go down his companies and Uber- rich buddies can borrow more money for cheaper and refinance previous loans at a lower rate. If companies go under, they get bailout money.
Genuinely, probably some of the dumbest shit I've ever read.
Based on all of your fabricated bullshit, the USD is going to crater in value.
That would, objectively, reduce the cost of all current loans significantly. But yeah, it's totally the loans he's trying to reduce the cost of by hammering reciprocal tariffs.
You're all saying he's killing the country. Correct?
What do you think happens to the global currency? They keep using USD for they jump to another one.
They're not going to keep using USD.
= Hyperinflation beyond the authority of any singular organization.
So you're saying he's going to refinance a bunch of shit after hyperinflation?
It's insane, and yet here I am getting bombarded by calling out the bullshit.
I fucking love it, I'm here on my day off laughing maniacally at this but unfortunately I have stuff to do and won't be back for a while, but I'm very excited to see the responses in a few hours.
As Fez from that's 70s show loved to say, GOOD DAY!
Trump is crashing the economy in an inflationary not deflationary way. I don't foresee the Fed wanting to cut rates, which is also inflationary. Trump doesn't understand that. If he wanted to get the Fed to cut rates drastically, he should have chosen deflationary market crashing lunacy, for example increasing income taxes by 50% instead of tariffs, which are consumption taxes.
Yeah, genuine austerity where you actually cared about deficits and debt would trigger massive rate cuts. Instead we're cutting a few billion dollars from expenses and a few trillion dollars from revenue, so it's really just an extremely sloppy and cruel stimulus exclusively for the richest people in the country.
Yes, drastically cutting government spending probably would have done it, too.
Trump doesn't have the patience or managerial skills to do that successfully. He tried with DOGE, but since the money has already been apportioned by Congress, he couldn't do that in the time frame he wanted.
Instead of higher taxes, cutting government spending would have done similar.
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u/CoughRock 23h ago
who's making these prediction for rate cut ? didn't jpowell explicitly said he's going to wait and see ?