Looks like Tillerson was right to call Trump a moron. These mega tariffs will be a disaster since % rates will stay high, and thus bring the US Debt Bomb to a crescendo sooner. Trump sees the tariffs as a way to encourage the re-industrialization of the US, but that process would take many years, and the US will be broke long before then.
The interest on the debt component is now bigger than the Defense budget and bigger than Medicare (!) In addition to cutting spending, the only way to slow down this process is to get % rates back down ASAP. These tarrifs will prevent that by generating immediate inflation, and the Fed will be forced to keep % rates high. It doesn't take a genius to figure this out, so what is Trump thinking?
The US no longer has the luxury of time. Here are the projections for the official US national debt (below). At what level does global confidence in the dollar 'crack'? Countries are already de-dollarizing their trade and central bank reserves, and will soon have the gold-linked BRICS currency as an alternative to the dollar. Global buyers will no longer be showing up for US Treasury auctions, which has already been happening.
Trump's tariffs could initially increase global demand for dollars, but over time these countries can avoid the tariffs by just shifting their export trade away from the US and toward the BRICS countries. The tariffs are going to accelerate BRICS expansion --> the exact opposite of what we need, and the USS Titanic sinks even faster.
Dec 2024 -- 36 Tril Dec 2025 -- 37.6 Tril Dec 2026 -- 39.9 Tril Dec 2027 -- 42.1 Tril Dec 2028 -- 44.4 Tril Dec 2029 -- 46.7 Tril
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