Recently, I noticed a very intriguing question: Will the world keep buying US Treasuries? (eg, PS-2025, State Street-2024). Following Trump-2025, I actually doubt that – a lot. For early indications, see this recent WSJ article:
“Trump’s Tariffs Were Supposed to Boost the Dollar. Why the Opposite Happened. Worries that long-term U.S. growth will fade could matter more for the currency than the mechanical impact of tariffs”
Source: Wall Street Journal article, 3 April 2025
I suppose USA is heading for lower growth, a lower US$, as well as higher interest and higher inflation. Hence, the frequent mentioning of stagflation in economics & finance articles. Recession fears are also increasing (eg, AP).
“Stagflation is the combination of high inflation, stagnant economic growth, and elevated unemployment. The term stagflation, a blend of “stagnation” and “inflation”, was popularized by British politician Iain Macleod in the 1960s, during a period of economic distress in the United Kingdom.“
Source: Wikipedia
I suppose that’s why American media state that “President Trump’s “Liberation Day” tariff plan is one of the biggest, most abrupt economic gambles in presidential history“ (eg, Axios). Hence, no risk management.
In Chinese and in European views, Trump’s moves are – probably – considered as economic and political madness, a.k.a. stupidity.
Considering the above, I’ve updated my recent diagram on global Superpowers.
The lyrics of the song below entered my mind before starting my writing.
American Pie (1971) by Don McLean
artist, lyrics, video, Wiki-artist, Wiki-song
[Chorus]
So, bye-bye, Miss American Pie
Drove my Chevy to the levee, but the levee was dry
And them good ol’ boys were drinkin’ whiskey and rye
Singin’, “This’ll be the day that I die
This’ll be the day that I die”
Note: all markings (bold, italic, underlining) by LO unless in quotes or stated otherwise.
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