« America is the global destabilizer »
Two weeks ago, the price of gold was $ 3021. After the « Day of Liberation », the day of the rates announced by Donald Trump, the price of gold began to increase. Even after postponing the application of tariffs for 90% (except for imports from China) and maintaining a general rate of 10%, the gold did not stop growing. On April 11, when China announced 125% rates for imported products from the United States, gold reached $ 3243 record and stabilized at $ 3236.
« Gold increases: the currency of the war in a period of global tension, » writes Forbes. « The tension increases. Look what the US administration says. They are preparing for China. This is enough to cause concern. China accumulates gold. There is no surprise. Poland has bought over 29 tons only in February. Turkey, Czech Republic and India buys similar amounts. These scenarios will be confirmed, the price of gold will increase monumentally, ”writes Forbes.
In parallel, the US dollar decreases in relation to the main currencies, and the Federal President Reserve Minneapolis says that this means that investors are leaving the US, no longer believes that it is the safest place for their investments as long as the commercial war of the Trump administration is embarrassed. « Normally, the raising of tariffs should have led to the strengthening of the dollar. The fact that the dollar falls at the same time I think is due to a change in investors’ preferences. » « Investors have considered that America is the best place to invest. If the commercial deficit will decrease, investors may say that America is not the most attractive place, and so the interest that the US will have to pay for the external debt will increase. »
« The United States has been the global stabilizer after World War II. Now we are the global destabilizer, » said Larry Fink, the Blacrock CEO, the largest assets management company, which recently announced the purchase of China’s ports in the Panama Canal area (but the final decision of Chinese companies is waiting for the green light of Beijing). « Yes, I think we begin to enter the recession, if we are already in the recession. If we take into account the rates, the recession can deepen. Now we are not talking about pandemic, about the financial crisis, but something we have created. »
« It’s not about Wall Street against simple people. It is a fall of markets that affect the pension funds of millions of people, » said Fink. « Yes, in the short term, we have an economy exposed to risks, » Fink said.
In a report sent to customers, Banca Goldman Sachs shows that « the agitation indicated some cracks in the ability of the market to function efficiently under these shock conditions. The confidence in American bonds as » sanctuary « has been reduced during periods of high risk, and the American debt curve remains fragile. »
Matt King, a former strategist at Citibank, who foresaw the collapse of Lehman Brothers bank, in 2008, warned about the major consequences of the commercial war.
There are few signals that the EU will be able to gather in front of a possible economic storm. Germany will have a new government, but Friedrich Merz starts with a record disapproval for a new chancellor. German analysts expect many disputes within the CDU-SPD coalition government, starting with the income tax.
France is led by a government that depends on the goodwill of the extreme right, when the extreme left, while the economy stagnates and the immigration has overcome the one registered in Germany, the European leader in this chapter.
Italy and Spain, two other EU forces, have stable governments, but they draw in different directions. Spanish Prime Minister Pedro Sanchez paid a visit to China a week ago. There, socialist Sanchez said, along with President XI Jinping that « only multilateralism and solidarity between countries can manage global challenges », while the Chinese leader said that the EU and China should join the « US intimidating practices. » In Paris, Emmanuel Macron did not signal any dissatisfaction with Pedro Sanchez’s aims, but at Washington the warning is clear: the proximity to China is synonymous with « cutting your neck » and « a stain bet for Europeans, » said Federal Reserve, Scott Bessent.
On the other hand, the Prime Minister of Italy, who withdrew the country at the Belt and Road initiative, is preparing for a visit to Washington. Giorgia Meloni is the connection belt between the EU and the Trump government, but it is not clear how much the EU wants to rely on this connection. In Paris, it is clear that President Emmanuel Macron is more dissatisfied with the options of the Italian government than by the proximity to China manifested by the Spanish socialist Sanchez. « If we go to the US, you think we will be stronger than going together, with 27 states and 450 million inhabitants, » said the French Minister for European Affairs, Benjamin Haddad. The reply of the Government of Italy: « How is it that when President Macron goes to Washington, everything is ok, and when Giorgia Meloni goes there, things are not ok? », Asked the Italian counterpart of French Haddad. This is the European unity under crisis conditions, as it revealed and under the conditions of the pandemic or the war in Ukraine. The goal of President Trump to split the EU seems to be achievable, and the presidential elections approaching Romania and Poland can decide how much the US could break from the EU and how much Germany and France could maintain their Hinterland.
