I don’t know if people believe Trump’s plans for the USA are misguided, or if they hate him so much, they’re willing to spend billions – or even trillions – to undermine him. Whatever it is, things aren’t going to plan. Or perhaps they are.
Personally, I think he’s doing the right thing. Putting the USA in a much stronger financial position and focusing on the well-being of American voters makes sense to me. I also approve of his challenges to China and, to a lesser extent, the EU. But he’s certainly not making friends.
I get that his “Art of the Deal” approach to international trade creates uncertainty. It’s worrisome, no doubt. But here’s what I don’t understand: how can American equity markets be underperforming the UK FTSE and German DAX? So much of what Trump’s doing looks positive, while Europe seems to be in fiscal decline.
Look, I know this comes down to personal beliefs. But I’m convinced that the more Western politicians have dragged us down the globalist path, the poorer ordinary citizens have become. Meanwhile, those same globalist politicians? They’ve gotten richer. The evidence is everywhere, but that’s a story for another day.
The contrast is stark. Trump’s bringing trillions of investment dollars into America while removing people who harm the country. Meanwhile, the UK loses a millionaire every 45 minutes. They’re still letting in low-skilled illegal migrants at a cost of billions per week.
It gets worse. Europe penalizes its own citizens and businesses with climate policies, while Trump ditched that agenda entirely. He’s telling Americans to drill for cheap oil and gas instead.
And here’s the kicker: while America’s tech industry booms with private investment, Europe props up its AI sector with taxpayer money. We know how this ends. Any successful European company will pack up and move to America eventually, tax payers will get zero return on the investment. Plus, Trump’s infinitely more crypto-friendly than most European leaders.
Nothing shows Trump’s “Art of the Deal” style better than his tariffs. They’ve thrown global trade into complete chaos. He knew this would happen.
But here’s the thing – and I’ve said this before – Trump knows what he’s doing. He’s a businessman.
Every tariff deal leaves America better off than before. Don’t listen to the commentators. Sure, many countries tell their citizens they got a great deal. Maybe they did get more than Trump originally asked for. But America’s still gaining more revenue than it had before. Every single time.
Markets go up and down. Trump doesn’t care much about that right now, especially in his first two years. We’ve all seen boom and bust cycles. After several good years, a downturn was expected. But keeping markets high today isn’t his goal.
He wants to weaken the dollar.
Sounds crazy, right? But unlike most of us investors and speculators, Trump’s thinking years ahead.
The tariffs bring in revenue, but that’s not the main game. He needs to create jobs. Real jobs. And that means getting people to buy American products. A weaker dollar makes those products attractive to foreign buyers.
Trump constantly talks about bringing manufacturing back to America. But building factories takes time – maybe two or three years. Trump figures a weaker dollar will entice investors because the goods those factories produce will be more competitive globally, when they come online.
Fast forward two or three years. Factories open. Jobs get created. Americans who suffered through some short-term pain start seeing results. Perfect timing for the next election campaign.
This isn’t typical Republican economics. It’s risky. But it might actually work.
Musk’s efforts will slash government waste. Foreign wars will see more limited USA intervention. Tariffs are providing immediate revenue. Then, when those factories start humming and the dollar is weaker, American goods become irresistible. More dollars flow back home.
I’ll be honest – the speculator in me expected immediate results from Trump’s return. That’s why I’ve been bullish on the dollar since he got back to the White House. Maybe I got carried away having a more libertarian leader running things.
Europeans will claim victory over the coming year. EU officials will point to the weakening dollar as proof their policies work. Whereas, those of us actually living in Europe know better. EU rule hasn’t helped most countries. Most Europeans are worse off than they were 20 years ago.
As the EU struts like a peacock, that arrogance will keep it from fixing its own economy.
So, instead of obsessing over today’s numbers, maybe we should watch Trump’s long-term plan unfold. Let’s see where we all stand in a couple of years when his strategy should pay off.
The post Trump’s Dollar Gambit? first appeared on JP Fund Services.
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