| | | Musings:
So here is the simple economic equation I come up with and it doesn't look good.
Trump has tariffs on every single country, he said:" there is going to be a cost to do business with us, and I will set the cost if we don't have a deal, but everyone pays something.
I saw him say that.
The dominos:
So everything that comes in has an added cost, a tax, and that is inflationary.
And as everything is now more expensive our industry is paying more for its raw materials than the free trade countries like most of the rest of western democracies.
So that hurts our exports as it costs our people more to build stuff, like cars, and needs to sell them for more money than cars from free tariff nations e.g. Canada for the first time imported more cars from Mexico than the US.
And the world is boycotting us because of the tariffs, they don't want to buy our stuff, even when it is the same price.
So we have an imbalance of exports and imports and a growing trade deficit, and along with this a declining dollar.
And when you add all this up, you get stagflation and a weakened bond market, and the possibility Trump will start monetizing the debt to avoid higher interest payments on the debt.
And all hell will break loose at that point. |
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