US tariffs

[mmm....shiney!]

There's been chat on the forum that Trump's tariffs will lead to a bout of inflation in the US, lowering GDP forcing the Fed to keep rates high, driving down the stock market, while pumping other assets.

If we look at the actual evidence of the effect of tariffs during Trump's last administration we see a negligible impact upon the yearly change in CPI from the beginning of 2018 until Covid.



Most media outlets and both orthodox (modern mainstream economists) and heterodox (Austrian) economists champion the idea that tariffs will create inflation, there is dissent within the economic community though, and it's largely eveidence as opposed to theoretically based.

See:
https://www.epi.org/blog/tariff-inc...moval-would-undermine-domestic-supply-chains/

 

[mmm....shiney!]

And see:

 

[mmm....shiney!]

The lesson here is to be cautious of claims that inflation will rise and that The Fed will not lower rates or only lower rates twice in 2025.

 

[mybullion.com.au]

Yep I'd be more concerned about the potential for a severe economic downturn than the prices of goods going up.

 

[bubblebobble2]

surprisingly CHINA only gets 10%...not 25%+ as he hates CHINA soooo much... perhaps his 'bro-mance' is still blooming...?

 

[barneyrubble]

If we look at the actual evidence of the effect of tariffs during Trump's last administration we see a negligible impact upon the yearly change in CPI from the beginning of 2018 until Covid.

/

The world was a very different place in Trump first term, almost no inflation at the time.

 

[mmm....shiney!]

The world was a very different place in Trump first term, almost no inflation at the time.

Official rates, currently 2.9%, January 2018 2.1%.

 

[mmm....shiney!]

This is couched in a BTC convo, but it's applicable to gold also I believe, of course minus the "violence". For anyone not "into" BTC, just ignore the BTC stuff and instead substitute your favourite hedge against currency debasement, whether it be RE, PMs, shares or even hookers, alcohol and drugs.*

From Jeff Park https://x.com/dgt10011

"YCC" = Yield Curve Control. I have heard a number of economic and financial commentators discussing this as a possible scenario and mentioned it somewhere else on this forum. Can't remeber where though.

* @sammysilver

 

[mmm....shiney!]

Wednesday US time:

(Bloomberg) — Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate.

“He and I are focused on the 10-year Treasury,” Bessent said in an interview with Fox Business Wednesday when asked about whether President Donald Trump wants lower interest rates. “He is not calling for the Fed to lower rates.”

https://finance.yahoo.com/news/bessent-says-trump-focusing-10-221751489.html

Strap in ladies and gentlemen.

 

[precious roar]

So we're going back to cash is trash?

 

[mmm....shiney!]

So we're going back to cash is trash?

"The race to debase"

Preston Pysh talks about that from from 4:45:

 

[mmm....shiney!]

It's above my capacity to grasp at the moment but it's also got something to do with recalibrating debt held by foreign entities.

 

[bubblebobble2]

more TARIFFs everyone

https://www.abc.net.au/news/2025-02-14/donald-trump-road-map-for-tariffs/104935560

seems like tourists will be tariffs if taking a dump in US land....falls under that 'reciprocal' tariff.

 

[JohnnyBravo300]

#tariffs bruh

 

[mmm....shiney!]

 

[mmm....shiney!]

This is Trump's and Bessent's biggest headache, the Dixie. It's stuck in a self-perpetuating cycle with US economic strength on one hand driving USD investment and an increasingly expensive USD in relation to other currencies. On their own they both would contribute to rising USD demand, together though makes it more problematic in dealing with.

 

[mmm....shiney!]

Now as far as the assets we have most interest in on this forum as a whole, any fiscal policy response by the Trump admin applying downward pressure on the USD would be good for gold and BTC.

Gold rose 70% in the 2 years following the Plaza Accord in 1985.

 

[mmm....shiney!]

BTC wasn't around in 1985 so there are no charts.

 

[hilon]

I think the link between fiscal policy, the USD, and gold/BTC is something many of us are watching closely. The Plaza Accord is definitely a historical example that shows how government actions can influence asset prices, especially gold. If we see similar downward pressure on the USD again, I agree it could benefit gold and BTC in the same way.

 

[IPDA]

This is Trump's and Bessent's biggest headache, the Dixie. It's stuck in a self-perpetuating cycle with US economic strength on one hand driving USD investment and an increasingly expensive USD in relation to other currencies. On their own they both would contribute to rising USD demand, together though makes it more problematic in dealing with.

View attachment 93538

USD will be crashing from here, not going higher. Target 80 in the short-term.