Me 6 months ago: “Well at least inflation isn’t as bad as it was in the Weimar Republic…” Me now: “uh oh”
Tariffs will further devalue the dollar.
To the contrary: the value of the US dollar, as measured against other currencies, has surged in the past weeks amidst Donald Trump’s announcements of tariffs, because markets expect them to bump prices and higher prices, in turn, would could prompt the Federal Reserve to raise interest rates, just as we saw in 2022.
TL;DR: higher tariffs => higher prices => Federal Reaerve raises interest rates => US dollar appreciates
The incoming Trump administration could counter this dynamic by changing the mandate under which the Federal Reserve has been operating for about a century and bringing it under the executive, stripping it of its independence.
Reality TL;DR: Fed is not actually raising interest rates any time soon.
I don’t think the BRICS are interested in giving up on the dollar. Two of those countries have some of the biggest dollar reserves there are outside of the US.
I think they’re more interested in bilateral trades/payments using their own currencies.
They absolutely are - the non-American aligned countries are afraid sanctions would prevent their ability to trade at all and want a better medium for exchanging goods. Everyone has seen the damage sanctions caused to Russia and are afraid of what might happen to themselves.
If a trading bloc abandons the USD, that means they are less interested in trading with the US. Slapping a tariff in them means that they will be even less interested.
If a trading bloc abandons the USD, that means they are less interested in trading with the US.
Not really. It could mean that they just want a just and fair trading system not ruled by a monopoly on green paper with slavers on it.
Are you seriously saying that the capitalists from BRICS countries are interested in justice, fairness, and cancelling slave owners as opposed to their own economic self interest while jostling for position with western capitalists about who should be higher in the pecking order of exploiting the global working class? Because if you’re serious about that, I would love to trade you some magic beans for your cow.
The bizarre Republican project of burning America to the ground, because they love it so gosh darn much, continues apace.
For those with enough wealth, it’s a win-win. Either the dollar stays strong and you continue to trade assets/stocks/bonds accordingly, or it craters and you invest in cost-competitive labor on par with India and China.
In the latter case, while foreign goods are priced out of reach, a booming manufacturing sector will come in and “save the day” in states with poor worker protections/rights. The real magic trick is making sure you (the 1%) are in the room when the decisions are made to hold or fold before the general public knows anything about it.
