That’s right folks, it’s Sesame Street – Trump style. Recall the silly little board in the Rose Garden (see above). His thick black marker. His crude breakdown of imports and exports. The showbiz version of economic policy. Tariffs on China? Sure. Why not throw in tariffs on your trusted allies too? Japan, Germany, South Korea. Even countries where the U.S. runs a trade surplus.
You get a tariff, and you get a tariff!
Why? Because it gets social media clicks. It makes the world sit bolt upright and focussed on only one person. It looks stupid, amateur hour and badly planned. And that’s precisely the point. And it is here where a large slice of nuance is required.
You need to look past the fact that Russia and Belarus were “missing’ from the above board.
That MacDonald Island, an Australian territory of subantarctic island group located in the Southern Ocean, has been slapped with tariffs that their only permanent residents, King penguins, are now seriously reconsidering their own export/import policies with the wider world.
The chaos is the strategy. The US wants to cook their steak by burning the house down around it.
Trump wants outrage. He wants noise. Every screaming headline on CNBC, every impassioned tweet from The Economist, every worried boardroom in Frankfurt or Seoul — it’s validation. It’s proof to his supporters that he’s doing what he promised: shaking the system.
They don’t care about details. They’re not reading IMF research warning of the effects on the global economy. They don’t appreciate just how expensive their own lives have become thanks to these policies.
They see Trump stand at a podium and say, “China’s ripping us off – we aren’t taking it anymore,” and they understand. That’s the show. That’s the whole policy.
He’s reversing decades of carefully calibrated trade policy because he thinks he knows what the consequences will be.
He’ll undermine the system of international trade because the very idea of a rules-based global system offends him.
The fact that the largest tariff rate of 50% was levied on Lesotho, who one should remember was assisted by the US in improving its garment manufacturing base, to lift tens of thousands out of poverty and allow imports into the US of the jeans they made, is telling.
Apparently, it is offensive that these minimum wage earners do not get to and from their work driving US imported RAM 1500 4 door Utes. Bang – tariffs.
It does not matter that the multilateral order was designed by America in the first place – and designed to buttress American supremacy in the global order. The so-called ‘America First’ policy.
You rightly point out that global markets are tanking. Does he care? “It’ll hurt at first,” he says, “but it’ll get better.” Trump is the world leading surgeon who will operate on you using a chainsaw. There’s no anaesthetic, just pain. But it’s worth it, he says.
Just remember.
He’s not interested in your stock portfolio. Or the fact that your pension fund owns Apple, which earns 20% of its revenue in China. Or that your small cap ETF is 40% exposed to global trade. Or that your property developer stocks rely on low interest rates, which depend on global liquidity, which depends on capital inflows, which depend on the very trade balance he’s disrupting.
It begs the question; just “what” does Trump care about?
If you’ve arrived at the opinion that it isn’t you he cares about, job done. Understanding what you’re up against is halfway to solving it.
What Trump cares about is the headlines about him. He wants to see and read headlines about Taiwanese semiconductor firm TSMC investing $100 billion in US operations. He wants to hear European car manufacturers moving their manufacturing plants to America. Or the UK promising to reduce taxes on American tech companies.
He will get what he wants for a while. But what he wants comes at a cost. A very real, very personal cost. One you’ll pay. So, what do you stand to lose here?
Beneath the surface things are changing. Big shocks like this always have a more insidious effect. Inflation will creep up. His supporters will pay more for things that a week ago were more cheaply sourced overseas.
Trump will pressure or force the US Fed to drop interest rates again, but that same rising inflation means they will once again have to go back up. The number of nations taking a wait-and-see approach to these tariffs are now dwarfed by those who are dead-set on countering them with further tariffs. The entire global trade system is teetering on the brink, another unseen shock could simply prove too much, and it comes crashing down. And it’s now that the true utter folly of Trump’s policies are laid bare.
Most have no idea what that ‘shock’ might be, but the PSE team are adamant we know. Because we are privy to information that even the current president isn’t aware of, let alone even bother to stop and listen.
The fact is that after almost 14 years of rising land prices the shock will be those same land values beginning to fall. History is unequivocal on this. When it occurs – all bets are off.
Those same rising interest rates will precipitate a break, some sort of credit related collapse, way out on the margins. And that will trigger financial Armageddon.
If you think what’s happening in markets now is bad, wait till you see what comes next. And time is running out. You need to be prepared. Don’t trust the government to help you. The best way to do this is to become our latest Boom Bust Bulletin (BBB) member.
Let the BBB guide you on the inherent timing of the economy only knowledge of the land market can give you.
Each month this history and knowledge will be yours via monthly written editions and video postcards that will help explain the real estate cycle like never before.
I said I would bring this back to you. I don’t often go to such lengths, but truly you do need to appreciate the ramifications. You’re going to face higher prices if this does turn into a trade war. Everything from Bunnings, your next iPhone or car or fridge. Your next house? All include globally made parts, all now more expensive.
A world where business slows, credit restricts, global trade grinds to a halt. It’s a slow squeeze that feels like a recession — because that’s where it’s all heading.
Increased stock market volatility, which creates uncertainty in the price discovery mechanism of the markets. Capital hates uncertainty. So, it moves. Away from growth. Away from risk. Into gold, bonds, and onto the sidelines.
If global investors begin to believe that America is turning inward, that its policies are erratic, that its leadership is volatile — they will take their money elsewhere. That weakens the dollar. But that makes inflation worse. Which then forces interest rates higher and kills investment.
Finally, you can see the world in general get sick of the pantomime, the threats and uncertainty, and turn instead to a multi-polar world where trade exists outside the sphere of US influence.
Here’s the outcome for you, dear reader.
If you own property — lower rates will be harder to sustain.
If you own stocks — volatility will become the new normal.
If you own a business — your inputs will cost more, and your customers may spend less.
If you have a job — your employer will need to navigate more uncertainty, tighter margins, and weaker demand. All while the old man in charge tells you it’s all part of the plan. That it’s good medicine. That things will get better.
And if they don’t?
What if this isn’t the start of a rebirth, but the beginning of a long, painful retreat from the world stage? What if this “America First” policy ends with America alone? Because here’s the thing.
Trade is not a zero-sum game. It’s not chess. It’s not war. It’s not about winning and losing. It’s about exchange. One of mutual benefit. Of specialisation. Of co-operation.
Trump doesn’t believe in any of that.
He believes that if someone like China is winning, then America must be losing. That if Germany is exporting more, then something is wrong. That if Korea is selling cars, America is somehow being conned.
In his mind, he’s ripping up the old playbook. And replacing it with a cardboard cutout and thick texter. One that will upend decades of American growth, arguably built your retirement fund, fuelled multiple property booms and gave the US the world’s highest standard of living.
Beneath it all, the one thing you can rely upon continues to turn. The 18.6-year Real Estate Cycle. And with it, its innate timing of the economic cycle. It’s this that gives you the window of opportunity you need.
Don’t waste it.
Sign up now.
