Trump hasn’t been shy saying that the whole world is going to receive a tariff sanction and a penalized foreign policy. We’re seeing a classic Trump tactic to overshoot in his demands and wishes, knowing very well that he’ll settle for far less which was the plan all along. In psychology, we’d call it as the “door-in-the-face” technique, or as Trump popularized, the “Art of the Deal”.
So, as we often do, let’s try to forecast what will happen due to Trump’s tariffs and his unpredictable announcements. How will others respond?
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Brainstorming with a Friend
Here are two Trends that I think that are ridiculous but possible to see in the future.
- A EU-US Split, with Europe returning to nationalized arms development and reducing reliance on U.S. weapon systems. Nationalism will inevitably occur in Europe (although not necessarily a long ethnic lines) as the USA and Russia continue to pull out their influence.
- U.S.-Russia semi-Alliance Against China (more unlikely as Russia is unlikely to trust the U.S.), but China may eye Siberia’s resources for potential expansion.
Europe
The U.S. is distancing itself from Europe since Trump became President. European leaders + Mark Carney all seem to playing an anti-Trump tune that is having dramatic effects. For the first time, European savings are switching from USD into Euro savings. This is a new shift that could escalate into open hostility in trade, finance, and even territorial disputes (Greenland, Canada).
450 million EU citizens should not have to depend on 340 million Americans to defend ourselves against 140 million Russians who can’t defeat 38 million Ukrainians. It’s time for us to take responsibility for the defence of Europe.–Commissioner for Defence and Space, former Member of the European Parliament, former Prime Minister of Lithuania
Canadian politicians all across the country
Up until the recent Canadian election, both main political candidates have been playing a “tough guy” tactics by offering their own plentiful sanctions in return, talking about Canada first (when has this ever been a priority…) and creating aggressive anti-USA slogans. Canadian’s have accepted responded immediately by taking down the US-made liquors from the shelves (after they bought them of course…). Interestingly, grocery stores across the country now have Canadian flags highlighting when a product is “Made in Canada” now. I thought that was racist a few years ago… or is it sexist? Ah, I can’t keep track any longer.
Meeting with Macron and Starmer:
Canada’s province of Saskatchewan currently has 40%, the most in the country wanting to secede from Ottawa if Mark Carney gets elected–33% of Albertans want the same and 30% of Quebecers. Which is claiming headlines recently but the reality is that the majority are very “pro-Canadian”. The sheep follow where they are lead…
Germany
In all of these instances, these parasites talking tough, as though they have a something to offer or a plan. Their political, financial, energy, military, food security has all become reliant on others, either due to state subsidization or anti-business policies that have destroyed incentives for domestic production. The bottom line… the opposition to Donald Trump and the United States, even if you may hate him personally, feels strangely out of place and deliberate in a plan to detach from the United States. What exactly do Europe have planned? Where exactly where they source their energy, food, development, defence?
Is this the enemy of USA?
Dividing up assets after talking with Russia?
I mentioned that Russia and USA will team up against China–let me rephrase that. I believe that China is about to experience some significant problems (with their unemployment, fake economic numbers, extreme housing bubble, frozen military, paralyzed politics to maintain trust and control, inflation, corporate debts, absolutely poverty, detachment from the rest of the world and more). China is essentially a wealthy, exporting North Korea that was allowed to succeed, rather than doing so honestly such as Japan, South Korea, Singapore and Taiwan.
Having said this, China serves China first and foremost-and I believe Russia understands this. As China becomes more desperate, they’ll be more interested in relying on Russia perhaps unfavourably since China often plays dirty (not saying the USA doesn’t…). Moreover, knowing that it can never be a true alliance with the United States, it may be that the USA offers a more efficient, [strangely] stable and wealthier business partner for Russia than China moving forward.
Russia is also playing a long-game in their approach to business and foreign policy. It’s difficult to say they will sign away anything that jeopardizes their independence in Europe and Asia (notice how Putin is now using Chinese and North Korean soldiers right now in Ukraine). In other words, attaching too closely to China may derail their own plans and since there will always be a barrier to close friendship with the West, we may see new brief trade agreements commence between the nuclear powers.
Under Trump the first time, nobody has put more penalties and sanctions on Russia. At the same time, no prior President had done as many trade deals with Russia either. I suspect this model of pleasing the deep state/foreign governments on one hand and doing business with the other hand may resume.
Maybe They’re All Playing A Long
It could be that the United States which is essentially the economic fulcrum for Canada and the defence force for Europe could be stepping up their negotiations by saying blackmailing these countries with the following,
“We will continue to keep your economies running by [Enter Trade/Service] but you have to help us in this mission of ours… the mission is to devalue the dollar against your own currencies. We need to destroy the artificially high value of dollars since we are the world’s reserve currency. To do this, we will tariff you and we need you to revert back to domestic operations without our dollars”.
Why you ask? Because the debt is too large everywhere and it’s a bad day for everybody if the reserve currency goes Weimar Republic for the sake of the whole world. Kicking the can down the road is still possible, but its a much bigger can to kick so there needs to be some inflationary event to propel it forward.
War?
Gold Markets?
Cyber Attacks?
Extreme Tariffs?
Civil War?
As Gerald Celente articulates so nicely, “When all else fails, they take you to war” [in reference to US foreign policy]. Perhaps the USA is not ready for a war and rallying support for one is too tall of an order to reasonably expect, especially since Trump ran on an anti-war campaign message.
Perhaps the Anti-Trump/USA rhetoric is exactly what the USA wants right now.
If you're interested, I wrote two articles on why the USA is not ready for a war:
We’re at an inflection point with the debt however. The USA needs a way to have cheaper dollars to handle it’s debt and detaching from Europe may be their way of doing this.
What This Means
Whether Europe is independently taking a firm Anti-American approach to their governance or they are playing enemy for the sake of USA blackmail, we’re both looking at a situation that may yield a stock market crash in the short term given the fact that there won’t be buyers of the debt. This will rocket interest rates higher which will cause an exodus from equity markets. To compensate, the USA will have to monetize it’s own debt, hopefully at lower interest rates, which will spook investors on the fact that interest rates had to have been lowered into selling further.
I have myopia on what happens next–but if this does translate into the devaluation of the world’s favourite fiat currency then we should expect everything to fall against asset prices (real estate, gold, stocks, commodities).
The long-term outlook that I have been putting forward, despite having a rocky road, is inflationary. Subscribe to get some great stock picks for only 5 dollars a month!
Closing
To me, it remains unclear if this is a friendly propaganda plan of playing “bad guy” to weaken demand for US dollar. The numbers suggest Canada, UK, Europe may be forced to play along because of their heavy reliance on trade, defence and multinationals corps/financiers.
On the other hand, they are in fact bifurcating on their own with Canada taking a greater liking to France, UK or China, which puzzles me from the Canadian perspective, but yet again, so does the last 10 year of Ottawa’s decisions. Either way for Carney and European Parliament, the economic weakening from tariffs engulfs more and more into a new slave class who have to buy into the WEF technocratic system. In other words, perversely, these Western countries may welcome disorder and economic destruction as it allows them to secure control with a tighter grip–as we see with the Canadian election–hating Trump is quiet popular.
I also predict that China’s collapsing economy will create an open door for Trump to do more business with resource-heavy Russia just as he had done 8 years ago. Russia will not risking losing anything to anybody and when its known they’ll only cuddle up so close to the United States, then it’s quite possible trade resumes.
What do you think? Send in your thoughts and I’ll post them under a writing name that you wish to create.
#StayOnTheBall
