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Showing posts with label #Maganomics. Show all posts
Showing posts with label #Maganomics. Show all posts

Friday, 9 May 2025

TRUMP’S VISION FOR AMERICA: PROBLEMS, VISION, GOALS, OBJECTIVES, STRATEGIES, OBSTACLES, AND SOLUTIONS

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9 May 2025

Trump’s Vision for America: Problems, Vision, Goals, Objectives, Strategies, Obstacles, and Solutions

This post summarises: 

1. President Trump's view of the problems in the American and global economy today

2. his vision for America

3. Goals / objectives

4. strategies for making America great again

5. obstacles to execution, ideas for overcoming them for a successful implementation.

1. Problems in the American / Global Economy (Trump's Perspective)

President Trump identifies several critical structural issues:

2. Trump’s Vision

Trump’s overarching vision for America ("Make America Great Again") is of an  Americawith past strengths of economic resilience and strategic international engagement restored, a society unified and animated around traditional American values including nationalism. So if successful, America would look like this:

  • Economic strength and independence: A thriving domestic manufacturing sector, rising wages, and energy independence

  • National sovereignty and security: Secure borders, a robust but strategically restrained military, reduced dependence on costly foreign entanglements, geographic enlargement to take in more land, resources and markets

  • Cultural and social cohesion: Renewed national pride, stronger community safety, and reduced political polarisation

  • Fair and balanced trade: Reciprocal international trade agreements benefiting American industries and workers first

  • Infrastructure and innovation leadership: World-class infrastructure supporting economic growth and global technological leadership.

3. Goals and objectives

Trump's goals are therefore to:

  • Eliminate trade deficits

  • Revive the standard of living of the American middle class through industrial and manufacturing renewal

  • Restore fiscal discipline and debt sustainability - the twin deficits

  • Stabilise currency values, end dollar overvaluation through its status as reserve currency

  • Realign global economic relationships to favour American interests.

(See also: Recap of Trump’s Maganomics)

4. Strategies

Trump proposes specific strategies including:

  • The Mar-a-Lago Accord: Not in rhe pipeline, but surel inevitable? For now, he will negotiate 90 trade deals in 90 days, he says, aimed at currency and trade realignment through strategic tariffs, currency interventions (possibly pressurising the Fed chairman) and leveraging diplomatic or even potentially military relationships

  • Financial repression: Slightly higher inflation than interest rates to reduce real debt burdens without dramatic austerity

  • Reindustrialisation policy: Incentivising domestic investment into factories and infrastructure instead of foreign-held financial assets

  • Energy policy reform: Achieving total energy independence through domestic production of fossil fuels, nuclear energy, and renewables.

5. Obstacles to Execution

Trump’s ambitious plans face significant resistance:

  • Institutional resistance: Bureaucratic inertia ("deep state" and more) deliberately obstructing policy implementation

  • Lobbying and corporate interests: Powerful groups invested in the status quo actively working against reform

  • Administration infighting: Conflicting agendas within his own team! causing delays and policy confusion

  • Legal and judicial hurdles: Frequent court challenges blocking or slowing strategic initiatives

  • Media and public perception: Negative media coverage and public backlash limiting political leverage.

(See also: The Current Crisis and Chaos in Trump’s Attempts to Restructure the World’s Economy)

6. Overcoming the Obstacles

To effectively execute his vision, Trump needs clear strategies to overcome these obstacles:

  • Strengthen administrative discipline: Ensuring internal unity and clear chains of command within his administration

  • Proactive strategic communication: Counter misinformation and manage public perceptions through focused, disciplined messaging

  • Legal preparedness: Anticipating judicial opposition with thoroughly crafted, legally robust policies

  • Strategic appointments: Placing loyal, effective individuals in the 6000 or so. critical bureaucratic roles according to the Purple Book, to counter internal resistance

  • Mobilising popular support: Building grassroots backing around popular policies that resonate with voters, leveraging this support against institutional resistance.

Conclusion

Trump’s economic vision aims to tackle fundamental economic issues through radical structural change of the global economy. Although ambitious and necessary, realising this vision requires confronting deep-rooted institutional, political, and social barriers head-on. There are enormous practical difficulties timing issues to a radical adaptation of supply chains to home-based production. 

His success depends on the execution premium, not just on clarity of vision, needing a highly disciplined, strategic organisation of his resources to overcome powerful opposing forces. 

He has two years to execute a two-term strategy.

References

  1. Accounting for America's Twin Deficits

  2. Dollar Milkshake Theory - Part I

  3. The Dollar Milkshake Theory - Part II

  4. Dollar Milkshake - Part III

  5. How to Avoid Recession and Catastrophe for the Dollar

  6. Hyper-Financialisation of the American Economy

  7. Recap of Trump's Maganomics

  8. The Current Crisis and Chaos in Trump’s Attempts to Restructure the World’s Economy


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Saturday, 26 April 2025

RECAP OF TRUMPS MAGANOMICS

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26 April 2025

If america can't run its economy with twin deficits, then unlikely the UK can.

The idea now seems to be in the words of trump or pretty much his words."We don't want your money china".

Why, because china has been reinvesting its profits into american financial assets. This has plumped up their value, which has been great for rich americans and chinese, but no good for the economy, or the people who've seen their wages stagnate.

Instead, what Scott Bessent wants and trump too is for the money to be invested in real assets, for example, factories.

Seems america wants to make its way in the world and not live on borrowed money anymore....

As to the budget deficit, again a whole new idea coming in at the same time as others, and at a time of great difficulty for the last step in the life of this empire!

Given the need to refinance a third of the debt in the course of this year, the immediate pressing need is to reduce interest rates. And that's why trump has been putting such pressure on powell. Never mind the effect on inflation, already exacerbated by tariffs.

He's been pressing europe to pay their way for their own defense, and he's walking away from ukraine to cut wartime expenditure.

I ve not heard of any pressure on congress to stop spending money like there's no tomorrow, but if they don't, there won't be.

And another major idea to deal with the debt in what's called financial repression. This is where inflation is greater than interest rates, and you float the dept away over the course of several years.


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Sunday, 13 April 2025

AMERICA HAS BEEN FIDDLING AND FINANCIALISING WHILE THE WORLD DIALECTIC MOVES ON

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13 April 2025 

This post began as a reply to a reader who is frustrated at the headlines, the markets, and the mockery being hurled at the only Western leader who for all his faults, seems to grasp the scale of what’s happening in global geopolitics.

"Even Yellen is lecturing Trump. How bad can it be!! Looking at the big picture i think it's too late for America to challenge China. China is already too independent and economically powerfull. America too hobbled by debt. It's not going to work. America has lost. The MSM and chattering classes are ridiculing Trump.....they don't realise what being second best to China means and how the USA economy is about to look like the UK economy....services only."

It’s not about liking Trump, it’s about recognising when a global regime change is already in motion - and the West’s refusal to take it seriously.

The reader's comment is bleak indeed, but is it very far from realistic? Yes, we are witnessing global regime change and the only person trying to save America is being ridiculed by a complacent elite who thinks it is “exceptional”, a belief echoed by the ever-comfortable chattering classes.

Ray Dalio identified the three ingredients for full-scale global regime change:

  • Massive debt, budget and trade imbalances, credit spreads, liquidity difficulty, currency disruption, return to high inflation...the monetary order
  • Deep internal division... the political and social orders
  • The rise of a rival hegemon...the global geopolitical order.

This week we saw all three disrupted and on full display. It was the most volatile market week I can remember - a moment when the old orders cracked and the new one heaved into view.


Even Yellen is lecturing Trump. How bad can it be!!

Yellen is old-school: pro-globalisation and fiscally cautious. Biden was the last chance to shift America’s trajectory, but while the house burned, he was off playing pyromaniac war games with Russia (much like Macron President in France incidentally and the UK Prime Minister Starmer).

Now Yellen is lecturing Trump — a sign of internal division at the elite level. The ruling class can’t agree on trade, industry, or strategy. No consensus on what’s wrong. No agreement on how to fix it. So Trump pushes forward with Executive Orders under Emergency Powers.

The elites’ arrogance extends to their own people, American citizens - the “deplorables”, they call their underclass. That’s never going to work for long. How do they think Trump was voted into office?

Looking at the big picture, it may be too late for America to challenge China.

China is now too independent, too powerful. The U.S. is hobbled by debt. It not going to work.

Or could there be bipartisan support for reducing the budget imbalance to 3% of GDP?

 it's all in the execution. Even if these various threats from tariffs to World War 3 can be handled competently, will it make any difference in the end?

Because, while the U.S. fiddled with its finances., look what China has been building:

  • Energy and materials input supply chains via BRICS+
  • A vast manufacturing base
  • Independent digital platforms for administering trade and payments
  • Global distribution output via Belt and Road
China’s debt has built factories, ports, and alliances.

America distracted itself with war and delusion, while its leaders clipped their coupons. Debt soared - principally, because of all the endless wars that brought no return. The myth of exceptionalism persisted. The internal weaknesses, long ignored, were eventually exposed by external rivals.

America’s debt has built nothing durable — no new pipelines, ports, or domestic cohesion.

Trump says America was ripped off. The truth? America, through its military and dollar dominance, ripped off the rest of the world. The profits generated from servicing American needs were recycled in the form of loans into American treasuries, allowing America to live beyond its means. And that world now sees a chance to level the playing field.

The wars bought no return on investment to America, just inflation, trauma, and declining global trust. Meanwhile, China has been going around offering infrastructure deals to the nations America tried to police. America thought it could force democracy onto other nations and it failed; China forced economic development loans onto the same nations and it has succeeded.

America has lost

Maybe. But it won’t give up without a fight. It won’t regain the lead, but it won’t go quietly either.

The weirdest part of this week?

Gold surged. Yields surged. In a crash, capital usually flees to the dollar, to US treasuries. This time, it flowed to gold.

What does that tell us?

  • Some say short covering in the derivatives market
  • Others say China, Japan and Euro  dumped US Treasuries in what appears to have been a coordinated move
  • I'd guess really what it's saying is that investors are increasingly reluctant to refinance debt, and even don't want hallowed US debt. That's bad. That's a liquidity crisis in the making.

Either way, the message is clear:
Investors are no longer buying the dollar. They’re buying gold.

The USA economy is about to look like the UK economy...services only

They outsourced the hard economy, where productivity begins, where profits are to be had, where growth starts; they gorged themselves on services offerings instead (successfully) but also on financial fiddling on tertiary markets and social media tech. The profits foreign manuacturers earned abroad were recycled into U.S. debt. Overdettedness forced America to break the link with gold in 1971, since when America has lived increasingly beyond its means.

The MSM and chattering classes are still ridiculing Trump. Still fiddling. Still hoarding financial returns from swaps and options and buybacks. Still blind to what it will mean to live under Chinese economic supremacy. Unaware that their children will be global second-class citizens.

Trump: “I go by instinct.”

And he’s not wrong accept, that is an instinct and instinct is emotion. Should a leader be guided by emotion or by reason? He trusts his gut feeling more than his civil service specialist teams.

He’s one of the few politicians who sees what’s needed. But he forgot the backfill. Despite the rhetoric, he’s still fuelling wars with Russia, threatening Iran, escalating tension with China, with Israel threatening to emblaze the Middle East, all this instead of getting on and reforming the American infrastructure.

Trump is trying to compress a two-term reform programme into two years. It won’t fit. It’s too late. The foundational reforms are missing. And meanwhile, a divided elite, clutching their digital share certificates, laughs at him from all sides.

Trump as Saviour Figure


This politically charged oil painting, rendered in a realistic Renaissance / Baroque style, shows President Donald Trump standing confidently but humbly in the centre, his gaze turned upward. Radiating light surrounds him, emphasising his sacrificial messianic posture, and the contrast between him and the mocking, dark crowd of political elites, while three supportive figures, dubbed 'deplorables,' stand in the foreground, gazing at him with resilience and determination amidst a backdrop of chaos and financial ruin.

You, dear reader, may laugh at the irony, the parody even, but Trump does see himself as a saviour figure.

A Legacy Moment: Trump on the Mount

 

 In this image, Trump evokes a kind of modern Moses. Shield in hand, he has held back the storm - tariffs as a temporary defence - buying time for deeper reform (which he is not yet awake to...). Behind him, the old world of outsourced industry and economic vulnerability; ahead, a path toward education, infrastructure, and innovation foundational reform. 

Like Moses on Mount Nebo, Trump points forward to a future he won’t fully walk himself, leaving the real journey to successors. It’s not a retreat, it's a legacy moment: having led through crisis, he now gestures toward renewal.

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Saturday, 12 April 2025

TARIFFS ARE THE SYMPTOM, NOT THE CAUSE

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12 April 2025

Trump with shield labeled Tariffs, pointing to reform path

A Legacy Moment: Trump on the Mount

This shows Trump at the end of his term, as a kind of modern-day Moses (I know, I know...). Shield in hand, he has held back the storm, tariffs being a temporary defence buying time for the deep reform the American economy so very much needs. Behind him is the old world of outsourced industry, financialisation and economic vulnerability. Ahead, the path of reform, passing by education, infrastructure, and innovation. Like Moses on Mount Nebo, he points forward to a future he won’t fully walk himself, leaving the real journey as his legacy, to his successors. He is not retreating, not Trump, this is his end-of-term "legacy moment": having led through crisis, he now gestures toward completion of the renewal program he will have initiated (we are still waiting, ok, ok).

Ray Dalio writes a powerful piece, warning of a debt-cycle turning moment. Dalio’s take on tariffs, productivity and the slow rot inside the American system isn't dramatic, it's not ideological either. It’s observation and advice, supported by fact and history. His advice is structural and strategic. It speaks directly to this moment where we’re building defensive walls round the economy, while the foundations crumble away. As always, the real battle isn’t "out there", it’s inside. This is what Trump has to see.

The Real Problem Isn’t Tariffs

Ray Dalio, founder of Bridgewater Associates, warns that the focus on tariffs distracts from deeper issues. The U.S. faces structural problems: declining productivity, underinvestment in education and infrastructure, and political polarisation. Tariffs offer a stop-gap, but the root causes lie in internal decline - of the infrastructure (physical and digital), weakening innovation (innovation is about turning ideas into productive outcomes, and requires capacity and commitment, instead we have misaligned incentives, underinvestment, and systemic neglect).

The U.S.-China Imbalance - the problem

Over the decades, China has strategically invested in infrastructure, technology, and education, creating 

- a skilled labour force and 

- a knowledge base that allows it to progress up the technology innovation chain

- access to cheap commodities and the 

- property, plant and equipment needed for manufacture together with it's 

- belt and road for distribution.

Strengthening its sales, manufacturing and delivery base is the long-term drive. This path of industrialisation is the same path trodden by Britain, Germany and America.In the past.

We have watched and known this for decades. What path did the US take? The U.S. outourced its manufacturing and shifted towards services and financialisation, leading to dependency on imports, especially from China. This has resulted in trade deficits and strategic vulnerabilities.

The Illusion of Tariffs as a Solution - the fake solution

Tariffs can only be a stopgap. They can protect domestic industries by taxing imports. They can even pay back some of the national debt. However, if foreign manufacturers don't feel disposed to "eat" the tariff by lowering their prices, they often lead to lower profits of home companies, higher consumer prices and production inefficiencies. Protected industries may now lack the incentive to innovate and compete, thus falling further and further behind global competitors. Tariffs can also provoke retaliatory measures, disrupting global supply chains.... a typical Trump tactic is "escalage to negotiate", but what happens when you cannot go that extra rung?

The Need for Internal Renewal - the real solution

Dalio emphasises that true strength comes from internal renewal: investing in education, infrastructure, and innovation. The U.S. must focus on long-term strategies to enhance productivity and competitiveness, rather than relying on short-term fixes like tariffs. Financialisation is not successful s long-term strategy - we've always known this but have been focused on our GDP and share prices.

Historical Lessons - the warning

History shows that protectionism can lead to economic decline. The Smoot-Hawley Tariff Act of the 1930s exacerbated the Great Depression. Conversely, post-World War II economic growth was driven by openness and cooperation, somethign we have sadly lost. The U.S. must learn from the past to navigate current challenges. This includes the utter futility of never-ending wars, which are the cause of much of the debt and distrust.

Conclusion

Addressing the U.S.'s economic challenges requires a focus on structural reforms and long-term investments. Tariffs may offer temporary relief but do not solve underlying issues. As Dalio suggests, building internal strength is essential for sustainable prosperity.

 See also Peter Schiff's take. He recommend gold mining companies rather than gold stocks or even physical gold. He explains the rise in gold prices by all the usual arguments, though his main argument is that people are moving out of dollars into gold. It takes oil to get the gold out of the ground.And the ratio of oil price to gold price has never been lower.

Dalio, piece by piece

RAY DALIO WARNS: U.S. LIKELY HEADING INTO A RECESSION | URGENT ECONOMIC OUTLOOK 2025

1. Introduction: The Danger of Misdiagnosis

  • Most serious issues come not from ignorance but from applying the wrong solutions to problems we do recognise.

  • Tariffs, in this case, are a reaction to real economic challenges — but a misguided one.

  • Key idea: The solution must strengthen, not further weaken, a nation.

2. The Global Economic Imbalance: Roots and Shifts

2.1 Long-Term Divergence Between the US and China

  • Over 40 years, China pursued a state-directed, long-term strategy:

    • Infrastructure, tech, education, and currency management.

    • Built industrial and export strength.

  • The US moved in the opposite direction:

    • Prioritised services, financial returns, and outsourced manufacturing.

2.2 Strategic Dependency and Its Consequences

  • US now heavily reliant on imports from China — from cheap goods to advanced tech components.

  • Trade deficits widened; domestic industry hollowed out.

  • This is not only economic but a strategic vulnerability.

3. The Financial Masking and its Expiry

3.1 The Old Model: Trade Deficits + Capital Recycling

  • China financed US deficits via Treasury purchases, keeping US interest rates low.

  • That game is ending — China is decoupling and focusing inward.

3.2 Structural, Not Cyclical Change

  • China is building its own tech ecosystem and consumer base.

  • The imbalance is now unsustainable without change.

4. American Reaction: Legitimate Frustration, Poor Remedies

4.1 Asymmetric Globalisation

  • US opened markets in the name of free trade. Others (like China) didn’t reciprocate.

  • Subsidies and industrial policy abroad created unfair competition.

4.2 Fallout in the US

  • Wage stagnation, regional inequality, political polarisation.

  • Public sentiment: "The system doesn’t work for us anymore."

5. Core of the Crisis: Competitiveness and Strategy

5.1 Productivity Determines National Strength

  • Productivity is the foundation of prosperity — not tariffs or tax tweaks.

  • US productivity has slowed due to:

    • Weak education systems.

    • Poor infrastructure.

    • Underinvestment in innovation.

5.2 Diverging Incentives and Rising Inequality

  • Finance rewards capital, not labour.

  • Education leads to debt, not opportunity.

  • The result: polarisation, gridlock, reactive policy.

6. The Mirage of Tariffs: Quick Fixes, Long-Term Damage

6.1 What Tariffs Actually Do

  • Tariffs = tax on imports → Higher consumer prices, especially for inputs.

  • Hurt businesses relying on global supply chains.

6.2 Innovation Suffers Under Protection

  • Tariff-protected industries often lose efficiency and innovation pressure.

  • Tariffs hide weakness — they don’t fix it.

6.3 Retaliation and Strategic Risk

  • Tariffs provoke countermeasures.

  • Trust in global supply chains erodes.

  • Companies relocate, delay investment, and reduce efficiency.

7. The Deeper Structural Crisis

7.1 Declining Internal Strengths

  • Fragile growth, weak wage gains, vulnerable to shocks.

  • US infrastructure and education in decline.

  • Rising powers (like China) are:

    • Long-term oriented.

    • Strategic in investment.

    • Cohesive in policy.

7.2 Systemic Fragility

  • US appears strong on the surface (market cap, GDP), but:

    • Many citizens aren’t benefiting.

    • Public resilience is low.

    • Internal polarisation undermines governance.

8. Historical Patterns: Warnings from the Past

8.1 Repeating Cycles of Decline

  • Every declining power follows a similar path:

    • Rising debt.

    • Polarisation.

    • Internal decay.

    • External rivals rising.

8.2 The Smoot-Hawley Lesson

  • 1930s US tariffs → Collapse in global trade → Depression deepened.

  • Global retaliation, economic fragmentation, prelude to WWII.

8.3 The Post-War Model of Global Trade

  • Institutions (IMF, WTO) promoted open, rules-based trade.

  • For decades, trade fostered peace and growth.

9. The Real Work: What Actually Builds Strength

9.1 Long-Term, Coordinated Strategy

  • Focus on building, not blocking:

    • Talent.

    • Infrastructure.

    • Innovation.

9.2 Education and Labour Productivity

  • Update education to align with future industries (AI, biotech, advanced manufacturing).

  • Close the skill gap → boost labour participation and real wages.

9.3 Infrastructure and Innovation

  • Modern, efficient infrastructure is a growth multiplier.

  • Public-private collaboration essential to lead in emerging tech sectors.

9.4 Strategic Capital Allocation

  • Shift from financial engineering to:

    • R&D.

    • Skills training.

    • Long-term investment.

10. Fiscal Prudence and External Relationships

10.1 Smart Spending, Not Austerity

  • Align spending with productivity returns.

  • Avoid burdening future generations with debt-driven consumption.

10.2 Alliances and Global Leverage

  • Economic power also comes from global trust and cooperation.

  • Isolated nations lose influence — they don’t gain it.

11. Final Word: Strength Through Renewal, Not Reaction

  • Tariffs are a blunt, emotional reaction to a complex challenge.

  • Real strength = rebuilding national muscles, not building walls.

  • History is clear:

    • Nations rise through internal renewal.

    • They fall through protectionism, division, and complacency.


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