Note
The markets operate on fear and greed. In my post, “The Beginning of the End,” my conspiracy theory about an engineered collapse of the stock market was just that: a conspiracy theory. The market crashed after fears about Trump’s impositions of tariffs last Thursday. Today (Wednesday), Trump suspended the tariffs (except for China) and the markets are way up (the Dow up over 2,900 points).
Now, 70 countries are in negotiations with the US about trade.
Trump’s plan all along, I believe, is to lower tariffs around the world, primarily to reduce the absurd $1.22 Trillion U.S. trade deficit with the rest of the world. It’s clear to me that Trump is also trying to crush the Chinese economy with the goal of collapsing the Chinese Communist Party. The tariffs on CCP goods is now 125% (as of Thursday April 9). The “de minimus” exception for CCP goods into the US has also been canceled. All Chinese goods $800 or less used to enter the US duty-free, allowing the CCP to market directly to the U.S. consumer. Thus the rise of CCP exporters such as Temu and Shein. Bye bye!
One thing is certain: the US cannot continue to run $2Trillion annual budget deficits. The $1.22T trade deficit is a big part of the problem.
Who knows, if Trump resumes the tariffs the markets will probably go down again. But if that happens, it won’t be an engineered collapse: it will be just more fear and greed as usual.