Trump Plays Jenga On The Precipice

Tariffs see Chinese rooster & American eagle exchange blows

• China will 'fight to the end’ over tariffs, says trade with US ‘roughly in balance’

• Iran-U.S. talks scheduled for Saturday in Oman

• Russia-U.S. talks on Thursday in Istanbul

Related:
Canada's Unelected PM Takes Power - Globalism as a front for corporate might (Mar 14, 2025)
3 Crises: War Flares, Harris Snorts, Soldiers Flee - Israel, Ukraine, Hollywood, Starmer-Maxwell, Geoengineering (Sep 27, 2024)
All Smiles As EU Gears Up For War - Borrowing to fund rearmament (Mar 07, 2025)
Rethinking Left & Right - Deindustrialisation and the worker's ruin (Aug 22, 2024)
Germany Votes For The World - An eye on Europe's entrapment (Feb 22, 2025)

See also:
Occult Capitalism Or Last Exit To Utopia (Nov 02, 2021)

(2,200 words or 11 minutes of your company.)

************** AUDIO VERSION AVAILABLE TO PAID SUBSCRIBERS **************

Apr 9, 2025

Will the tariffs topple and what will they strike on the way down? There are signs of concession from Iran and Russia, but China's leaders appear defiant.

By their calculation they have less to lose in a trade confrontation with the U.S. China is the second-largest lender to the U.S. government, holding about $760 billion in U.S. Treasuries as of the end of January.

A bond selloff raises interest rates, making it more expensive for the U.S. government to borrow and that's the opposite that president Donald Trump's administration intends with trillions of dollars of bonds to refinance this year.

Memories

There are traders for whom the fraud-and-flunk of 2008 is prehistory, let alone the pump-and-dump of the Dot Com bezzle.

Granted, it doesn't make one feel any better to be older.

However the 2008 banking crisis was never addressed. The banks were bailed out, interest rates were reduced to zero to inflate the apparent value of bank assets, so that banks did not have to mark to market and realize their insolvency, and thus the can was kicked down the road.

Trump was allowed — give or take a couple of pot shots — back into power but the greater objective remains: how to solve the monetary crisis and to bring down the debt.

One way is to launch a world war and then default. The other is to try some risky economic experiments.

But can Trump's tariffs solve issues like de-industrialisation, an indebted government, an insolvent banking system, and a growing part of the population living paycheck to paycheck, drowning in a tsunami of credit?

Is it even the right tool — like DOGE, desperately trying to cut the cost of government — and is the objective feasible?

Product

Trade imbalances are a symptom not the cause.

Paper money is not the problem. It is that when banks create loans (out of thin air) they had better be used for productive investment (turning air into stuff) instead of buying fast fashion from the lowest-cost labour to be found on the planet.

Creating money is something that profits bankers unfairly but it's better that we at least end up with infrastructure and factories in our home towns that allow us to earn a living wage.

Our trading rivals are not the problem. The trade imbalance has been inherent since the economy shifted from industry, infrastructure and agriculture to the pursuit of paper profit.

The consumer economy was once based on improved productivity, so that the people could buy more product from the companies for which they worked.

Each step of deregulation has unleashed hyper financialisation which ran rings first around people and then around nation states.

The severance from gold was accompanied after 1971 by a shift to monetarism and a service economy.

The General Agreement on Tariffs and Trade was replaced by the ideologically globalist World Trade Organisation, in 1995, which encouraged outsourcing.

At the time, as a business editor in network news, I had been trained to think of global trade as nothing but good and the protesters as unhinged.

The good of mutual benefit and greater efficiency overall, however, has been replaced by narrower aims of corporations seeking an extra sliver of profit at any cost — to the disbenefit of societies on each end of the trade.

See Canada's Unelected PM Takes Power - Globalism as a front for corporate might (Mar 14, 2025)

Initially Western nations rode on the wave of historic wealth, with an industrial base and a better-educated, healthier workforce. Even displaced workers could find employers who needed them.

However integrated transport and, especially, Internet communications, removed the barriers to using workers abroad — or bringing them "here" physically or virtually. The Western worker was fungible with the outsourced worker who came without theosts of health care or retirement plans. [1]

To fix this would take at least one generation, if we first fix the banking and credit system, to rebuild the layers of skilled factory workers and the engineers to support them.

Advanced tooling no longer exists on the scale required to make the iPhone in the U.S. the late co-founder of Apple Steve Jobs told president Barack Obama in 2010.

Apple had 700,000 factory workers employed in China, he said, and it required 30,000 engineers on-site to support those workers. "You can’t find that many in America to hire." (Walter Isaacson’s biography, Steve Jobs, 2011)

Bear in mind the toll that factory closures have had in America's "rust belt." Charlie Kirk summed it up last year:

“And then we call the people that are still there in Springfield, Ohio, racist after their factories have closed, their sons died in Iraq, and they're addicted to opioids, and their local school is being over run..."

See 3 Crises: War Flares, Harris Snorts, Soldiers Flee - Israel, Ukraine, Hollywood, Starmer-Maxwell, Geoengineering (Sep 27, 2024)