A Trump-XI alliance against the « other America »?
The economy of America is a castle of playing cards, says the businessman and financial commentator Peter Schiff. The walking of the American economy is not the only stake, there is the struggle between formal power and the deep state – there are two Americas, rather than two China (People’s Republic and Taiwan), and Donald Trump can try to ally with China and Russia against the bigger enemy at home, says Pippa Malmgren, former special assistant of President George W. Relations.
Business and strategies have different opinions about the Trump administration agenda. The former believe that this agenda does not even exist, that America is led by impulsive reactions to the limit of the president and that the American economy can collapse.
« Our whole economy is a castle of playing cards built on an overvalued dollar and on the commercial deficit, on the excessive consumption of Americans and on the interest held artificially as low as possible. Everything can crash. We will have greater inflation and a weaker economy. There will be recession and a lot of inflation in the US. This is because the high rates will translate into inflation. So far, I took advantage of the fact that I could, directed inflation on scholarships and bond market. Now, things have been reversed. Foreign actions are increasing – in Europe, Asia, South America. Money is absorbed from the United States and is the exact opposite of what Trump wants. Capital does not come, but leaves America.
The dollar has reached over $ 3000. It will grow even more, as the world is de-sololar. Central banks buy more and less gold and fewer American sovereign bonds. It is not good for the US government. It is good only for companies dig after gold. Who will buy US debt? The deficit will increase even more during the current recession. Federal Reserve will buy this debt and we will have an even greater inflation. The prices will be swollen not only by the rates, but also by the inflation it will cause. To the pain of the tariffs will be added and the pain of a only weak« , says Schiff.
« The rest of the world will have an easier task than America. They only have to consume more. The hard work will be in America, because we will have to consume without having factories to produce. We need to build a lot of factories that don’t exist now. That will take a lot of resources and a lot of effort. Not the rest of the world, but America is the one that a heavy road in front« Says Peter Schiff.
Many politicians and generals in the United States are talking about a war between America and China, and the tariff war between Washington and Beijing can strengthen this perspective. But there was an alternative interpretation.
« Despite the tariff conflict, President Donald Trump can begin to attract China and Russia on his side, rather than antagonize these powers. We often talk about « two china », about China/Taiwan. However, as the deep American state becomes more and more militant, the biggest problem of President Trump will no longer be China or Russia. It will be the dark force in America. Maybe the restraint of President Trump in Taiwan’s issue shows that the split is not in China, but in America. Maybe we have « one China » and « two Americas ». China, but also Taiwan believes that the deep warrior state in the US is a serious problem. China, and Taiwan, also notes that people who are pregnant with democracy in America are not the same who carry America wars all over the world. Everyone looks at the fierce dispute of the proposed and then suspended tariffs, but does not notice the subtle negotiations to attract Russia and China on the side of Trump, against the deep state.« , writes Pippa Malmgren.
Malmgren notes that China’s reaction to increasing the import taxes by the Trump administration was with the same currency -raising the tariffs for US imports -, and not the sale of the huge American debt held by China. Why? « Because in this way China would pull a bullet in the foot. China has not sold American bonds. Their sale was rather caused by the US Secretary for Commerce and the White House, as well as Japanese trade adviser! The secretary of the treasury, Scott Bessent, calls the world finance ministers to announce that he intends to re -evaluate the gold held by America (last evaluated in 1973, when the oil was worth below $ 45, while now it is listed at over $ 3000) and to introduce new forms of coin in the treasury. This is very good news for China« Writes Malmgren.
China’s great concern, as the main holder of US debt, is that America could use inflation to pay for their debts and harbor their creditors. After all, how did the US pay for the War of Independence? Through a great inflation. How did America pay for the civil war? By an inflation that reached 9000%. How did he pay for the social programs and the Vietnam war? By what is further called the great inflation. And how did America manage the 2008 crisis? Introducing inflation. Inflation is something that destabilizes china and emerging markets.
« When the secretary of the treasury says that the US has to limit inflation, creditors enjoy. This is the essence of a possible agreement from Mar-A-Lago. Those who say Trump wants to devalue the dollar do not want to see the wider agenda: to prevent Federal Reserve and politicians to develop more and more. Bessent and Trump provide China with a protection against the devaluation of the dollars that China holds in bonds. This is a great value for China« Writes Malmgren.
In the 1980s, American politicians and businessmen tried to fight for car imports from Japan by devaluing the dollar, so that Toyota cars will become more expensive for Americans. The Americans have been cheated on-the Americans continued to buy them, and the commercial deficit with Japan has grown even more. « Secretary Bessent can be smarter than Ford and IBM chiefs in the 1980s. He understands investors want to be protected against inflation. That is why Bessent wants to bind the dollar of strong-gold and, to some extent of bitcoin. The dollar will devalue, especially in relation to the euro, but these strong assets will give it protection. The strategy is based on the Federal Res serve deprivation of the power to devalue the dollar. And is not a coincidence that Bessent and President Trump are looking for a replacement for Jerome Powell, the Fed boss”.
This can only enjoy the creditors of America. « Trump makes a show and threatens with rates, but at the same time he can lean in the ear of China, whispering » we will prevent the technocrats from paging you « . Further, Trump can tell China: » And we will do everything we can to reduce the power of the deep state, which causes wars for profit; Acts in this regard: it has forbidden access to classified information for a lot of former non-conservative officials, launched legal actions for the false files through which they paralyzed the first mandate, stopped the flow of money that allowed the state department to turn the justice from other countries (through USAID, and to the other, Mix in elections around the world and no longer devalue the dollar, then Trump’s and Bessent’s offer.
In addition, Trump and Bessent are heading to a world where Russia can monetize its oil, and China can get much faster access to oil. It is important that the Saudi Crown Prince is on the Trump administration, because this allows the United States to descend the price of oil, if necessary. In this way, Trump can press Putin to come to the negotiation table and at the same time the US helps China, which needs a lot of cheap oil”Writes Pippa Malmgren.
