Flock of Black Swans: Trump Tariffs will kill another OCR cut – Will Orr be forced to raise in 2025?

Core inflation in America rose .2 beating predictions of .3 while job data was stronger than expected.

Since Covid ruptured supply chains and geopolitical tensions changed just-in-time supply chains to just-in-case supply chains, the West has been importing inflation.

This has caused price gouging by Price Makers and crushed the working classes with a cost of living crisis.

Trump’s election risks the beginning of an escalation that risks flocks of Black Swans.

To date we have been told by Trump’s defenders that his wild and mad proclamations are all the spin of a deal maker negotiating the best deal with the worst threats, and certainly the Art of the Deal is just a how to guide for Alpha Jock Dickheads doing Alpha Male Jock Dickhead stunts.

Taking offence at some unrelated issue and causing a Tantrum for emotional leverage to get the best deal you can isn’t Art or a Deal, it’s Alpha Male Jock Dickhead bully behaviour that has all the empathy of an average Andrew Tate bro culture tutorial.

This time around however Trump believes God saved him from an assassination attempt.

The difference between war crime and genocide tends to be believing God is on your side.

If Trump believes he’s the vessel for Christ’s retribution, he’s going to do shit for realzies.

I fear he absolutely intends to ram Tariffs on the world from Canada to China.

The impact of such a sweeping move will see the American currency spike and create an over valued global currency that hurts everyone else.

It hurts China and destabilises their already weak economy.

It hurts Canada and gives fuel to the MAGA movement in Canada and sets a narrative they should become a de facto 51st State.

In NZ, we buy our petrol in American dollars, a soaring over valued American dollar could see our petrol prices spike alarmingly.

Imagine a $4.50 litre petrol. Or $5 a litre?

Imagine the immediate knock on cost to everything off the base of those kind of inflationary pressures?

That makes an OCR cut highly unlikely and could in fact see Orr raise rates to combat a spike in petrol price inflation.

Why would Trump commit to such a staggeringly stupid move?

Because he believes God has saved him to do special God stuff to be the bestest American President ever!

This God delusion for a narcissist allows Trump to do things no other sane President would attempt so he will blunder into a Global economic  meltdown because his decision making has become manifest fucking destiny.

If he implements eye watering Tariffs, they could cause enormous and immediate economic dislocation.

This seems fine according to JD Vance…

In the end, Trump may not care too much if the dollar becomes a source of global instability. Vice President-elect JD Vance argued last year that the dollar’s role as a global reserve currency has subsidized Americans’ ‘mass consumption of mostly useless imports.’ 

…the last time the American Dollar became this dangerously over priced was in 1985 when a negotiated series of interventions was agreed to bring the dollar down in a controlled manner…

This problem last occurred in early 1985, when the dollar was universally reckoned to be dangerously dear. At that time the US was able to call on trading partners who depended on the US security umbrella – the UK, Germany, France and Japan – to negotiate the ‘Plaza Accord’, which coordinated a series of interventions in the foreign exchange market that allowed the dollar to decline in a measured way. 

…there is no way China would agree today to helping America devalue their dollar generated by Trump’s Tariffs.

That leaves a dangerously overvalued currency risking massive financial dislocation all because Trump thinks God loves him.

My speculation, purely based on Trump’s inane narcissism, is that he is incapable of backing down, especially now he thinks God has saved him to Make America Great Again and that he won’t be able to accept the Tariffs are a bad decision and the economic carnage he triggers by implementing them will drive him to double down rather than back down.

I can see his Billionaire Libertarian Crypto-Bros convincing him of removing the American Dollar and replacing it with an American Crypto-Currency as the solution the way taking America off the Gold Standard in 1933 helped expansionist growth…

Under Trump, cryptocurrency is set to go mainstream – but that won’t make it any safer for investors

As the United States prepares for Donald Trump’s inauguration on 20 January, all eyes are on the cryptocurrency markets. After Bitcoin’s price reached $100,000 (£81,917) for the first time in history in December 2024, the cryptocurrency community is eagerly anticipating Trump’s fulfilment of his campaign promise to make the US the “crypto capital of the planet”. Some analysts predict that Bitcoin’s price could range between $78,000 and $250,000 in 2025.

Blockchain technology has numerous applications beyond crypto payments – for example, in supply chain and logistics. But it is the price surges of Bitcoin, Ethereum and “meme coins” that capture the majority of public attention. Speculative demand and the potential for abnormal returns, which are rarely found in other financial markets, remain key drivers of their prices.

Investors are often motivated by the prospect of short-term profits rather than a belief in the asset’s true or fundamental value. In the case of meme coins, speculative demand is primarily driven by social media culture and community enthusiasm, with little focus on the utility of the underlying technology or long-term success of the project.

Fuelled by expectations of a more favourable regulatory environment under the Trump administration, there is now increased institutional interest in cryptocurrencies. Major players such as BlackRock are entering the crypto derivatives market, increasing liquidity and drawing even more investors. This industry and political support for cryptocurrency demonstrates higher adoption and greater acceptance of crypto assets. At the same time, the speculative nature of crypto assets raises concerns that political endorsements could inflate a bubble, similar to the dotcom bubble that lasted between 1998 and 2000.

Financial market bubbles occur when asset prices far exceed their fundamental values and no longer reflect actual risks. When these bubbles burst, they can trigger a contagion effect, causing the collapse of related securities – even in industries with no direct connection to the troubled assets.

In my research, alongside fellow authors, I analysed companies that had rebranded with crypto-related names to boost their stock prices, despite no changes to their business models. This superficial association made these companies susceptible to contagion from the broader crypto ecosystem. If investors did not investigate whether these companies genuinely adopted blockchain technology, they are likely to sell these stocks swiftly at the first sign of negative news or a crisis in the crypto market.

…Trump is dumb enough and will be desperate enough to find a disruptive new way to make money as the American Economy tanks because of his Tariffs.

For the first month after replacing the American dollar with a Crypto Currency, the new American Crypto Currency will make more money than any of them dreamed, and then on day 31, for reasons none of the Billionaire Libertarian Crypto-Bros will be able to explain to any of us, it will crash because the whole thing is one giant speculative bubble that will implode in a way that makes the Wall Street Crash look like a gentle trip.

Is that a bird?

Is it a plane?

Or is it flocks of Black Swans?

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