Trump is going to impose a 50% heavy tax on Europe. May I ask, with Trump doing this every day, is he not worried about his own domestic economic recession?
Not worried at all, and if he can pull the world in to support him, then he will make a huge profit. How to understand this? This is certainly not just a gimmick. If you understand the entire article, it may provide you with a clear guide for all your future asset allocations.
The first and second points, when combined, lead us to understand under what circumstances Trump and Powell, who are at odds, can reach a consensus? The second point we discuss is where their targets lie under the premise of reaching a consensus? The third point is, if the U.S. really goes into recession, can they quickly recover? Based on these three points, we will have a discussion. The first and second points merged together show that Trump and Powell currently seem to be in stark opposition. What is their core point of contention? Trump believes that the U.S. should rapidly cut interest rates, but Powell consistently disagrees. What are Powell's core views? The first view is that there is still inflation in the U.S. The second view is that employment data is still acceptable. The third view is that the U.S. has not yet entered a recession.
So, assuming that the premise for Powell and Trump to reach a consensus is that the U.S. falls into recession, what measures will the U.S. take to maintain itself in a recession? First, flooding the market. Is Trump happy? Of course he is happy. The flooding he wants is coming, and the tax cuts he wants can also be quickly promoted. Secondly, what problem exists with U.S. bonds now? Isn’t the yield on U.S. bonds still high? If he wants to save U.S. bonds, he needs to continue inflating their bubble, and the only way to do that is through QE, quantitative easing, by flooding the market. Is this flooding also a way to save U.S. bonds? So, to save U.S. bonds, doesn’t it mean interest rates need to be cut? If you want to cut interest rates, doesn’t it mean there need to be signs of recession first? The third point is a weak dollar. Trump keeps shouting for a weak dollar. How can the dollar be weakened? If the agreement cannot weaken it, then a recession will clearly weaken the dollar.
So based on these three points, it may sound unbelievable, but think about it: Is a small-scale or controllable recession good or bad for the U.S.?
The second point is global recession. If the U.S. goes into recession, it only suffers itself, but if the U.S. recession can drag a bunch of others down with it, causing a global recession, then Powell and Trump have truly reconciled. Because behind Powell is not just the American people; he is concerned not only with inflation and employment rates but also with whether the dollar's hegemony and its tide can continue. So what are the big shots on Wall Street waiting for? Are they not lowering rates because domestic data is acceptable? No. It is because if they lower rates now, it would be like reeling in the net after catching no fish; they are still in the process of collecting the net, and they would rather come back for another catch. They would return empty-handed. So, to create this dollar tide, doesn’t it mean that during rate hikes, some countries' economies must collapse? At this point, when they flood the market, isn’t it equivalent to throwing a net to continue fishing, bringing in low-priced assets? Because they flooded the market, they have money to globally acquire low-priced assets. So why not flood the market now? Isn’t it that the core point is that there are no low-priced assets to acquire globally? How to acquire low-priced assets? By allowing their own recession to drive the global economy into fragmentation, they can acquire assets globally. This way, the dollar tide can continue. So, did Trump and Powell reach a consensus? At this moment, is the U.S. recession a loss or a gain?
And what else is there? If they lead the world into recession now, who will suffer the most? The most affected may be us. How to explain this? Because we are currently in a booming phase with strong production capacity. If a global recession occurs, what will it bring? A global tightening. Where can we sell our vigorous production capacity? If the whole world is in inflation now, are we happy? We are trying to get out of deflation. If the whole world is in inflation, isn’t that the perfect time for our products to be sold abroad? You don’t care about inflation because I have things for you to digest; I can help you push inflation down. Isn’t that the reasoning? Therefore, right now we are afraid of surrounding areas experiencing deflation.
So, when you talk about the so-called recession, the U.S. is suppressing its opponents by lowering the prices of targeted assets, and then can also resolve domestic issues, so a recession can be settled. Moreover, this recession might turn out to be controllable in the end. Before talking about being controllable, let me explain why they are so focused on Europe. What kind of people are in Europe? To put it bluntly, Europe now resembles our last feudal dynasty; it looks large in size, but is extremely weak, with its economy very fragile. That’s not the worst part; the worst part is that they still have money. Not only do they have money, but these people also have a certain dependency on the U.S. If the U.S. and Europe fall into a significant recession now, these people will pack their bags and all migrate to the U.S. I’m telling you. Those immigrants from the U.S. will pay some money, and those wealthy people will all run away with their money. Isn’t that a normal occurrence? Many of their relatives are already in the U.S.
The third point, when I talked about the debt issue a few days ago, I mentioned that the UK has consumed a large amount of U.S. Treasury bonds. Did I say that Europe has consumed a lot of U.S. Treasury bonds? No. Germany and France do not hold many U.S. bonds, and they have been distancing themselves from the U.S. Meanwhile, they hold a lot of gold, which proves they have money to grab. After that, having less U.S. bonds does not mean they are burdened by U.S. debt, and they are not worried about debt. Moreover, there is also inflation. For example, why did we first choose China? China is definitely fatter than Europe. But what does China use to control them? The real reason is the inflation. I just mentioned that to reach a consensus, both sides must resolve one issue!!
Please pay attention ❤️🔥❤️🔥 Writing is not easy!
