US Tariff Action did not “wipe out” $9 Trillion USD globally

US tariff action did not “wipe out” $9 trillion USD globally. All fiat finance is based on fiat currency debt, and that debt can only be extinguished by paying off the debt, or by Treasury decree as in default on US debt instruments.

In a Wall Street sell-off, little if any debt is written off or “paid off” by exiting the Wall Street share market. That “money” ie debt has only been transferred somewhere else — for example, temporarily into cash.

In the financial collapse of 2008-2009 it is true that some debt was extinguished by Paulson and by Treasury decree via the Troubled Asset Relief Program (TARP) which was a virtual default, because Federal reserve primary dealer banks were in trouble when Lehman failed.

Another 2009 collapse will occur if a Fed primary dealer bank fails as a result of a debt crisis in share markets now. But unless share markets decline much further — losing another 10K DJIA points for example in short order — in my opinion, the current ‘panic’ does not threaten the Fed’s primary dealer banks.

Primary Dealer: Definition, Function, Examples

A primary dealer is a pre-approved financial institution that is authorized to make business deals with the U.S. Federal Reserve.

The liquidity of primary dealer banks tends to vary daily, https://www.newyorkfed.org/markets/desk-operations/reverse-repo and determining the weakest bank is a challenge, since internal operations impacted by share markets are kept secret. But for a long time Deutsche Bank was considered to be “weak” and in crisis. Germany’s economy could be impacted by new US tariffs, putting more pressure on Deutsche Bank, and on the ECB central bank.

However, the global financial system and liquidity situation (different from solvency) is nothing like that yet, not endangered at present. Let’s call it a ‘storm in a tea cup for now’, with much noise, angst and ado accompanying yet another example of Trump’s Disruption Theory.

Some financial commentators assert that Trump hopes to crash the share markets, so that federal fund rates (interest rates) will be forced lower, making it easier to for the Fed-Treasury to finance US public debt. But that is of course an overly simplistic view on how to address the US debt issue. And the murky issue of the US ‘debt ceiling’ debate complicates matters further, since the “continuing resolution” to finance US public debt expires for the Treasury at some point this summer. That’s not far away.

Also, depending on whether a share market crash really happens, then this global financial equation, where the dollar US is the global reserve currency, becomes far more precarious. And as such, perhaps the Big Question is, whether Trump really thought his tariff plan through?  And considered all consequence.

Take for example, Dell Computers of Texas. Although considered US output, Dell products are sourced outside the US with assembly plants in China, Vietnam, Taiwan, Mexico, Brazil, Ireland, Malaysia, India, Poland, and Thailand. To my knowledge, not a single Dell computer product is made or assembled in the United States. But via the guise of Dell Texas distribution and HQ, where product logistics distribute product via the Texas operation to wherever, the end result is considered to be US manufacturing output! And figured as US manufacturing GDP. When it’s nothing of the sort.

The Dell business model is widely accepted and copied.  Especially after 2017, Wall Street’s elite widely endorsed such a US business model. (Check out this weird chart for the past five days https://finance.yahoo.com/quote/DELL ) Many US companies use this business model, not just for electronics, but for variations from appliances to vehicles – like Tesla. Many Tesla components are foreign-sourced even if assembled in the US.

Trump’s tariff plan could hurt Musk’s business model, along with that of many other Wall Street-enabled business buddies. The idea that Trump can change Wall Street’s favored corrupt business practices will take many years, while the US consumer is in serious decline. And Trump will be out of office in less than four years. Likewise, the reciprocal tariffs make no sense either. Which manufacturer will re-locate to the US to produce for a declining US consumer?  And then being unable to export abroad due to reciprocal tariffs?

But thanks to the thieves who litter Wall Street, real US manufacturers bolted from the barn door many years ago, and are basically deceased now. Is Trump unaware of that? Who is advising Trump?  “Free market” efficiency — as defined by Wall Street — will not allow protectionism of production, in countries where it is costly to produce. 

Nor will Wall Street allow a return to mercantilism, as Trump seems to be advocating, where “gunboat diplomacy” was also mercantilism’s signal feature.  https://www.investopedia.com/terms/m/mercantilism.asp

But again, my hunch is that the situation will stabilize. The foregoing will take much time to play out, and Elites have too much to lose by failing to adopt. The true danger is whether the Globalists — like Rothschild’s, Soros, Warren Buffett, Vanguard Group, BlackRock, State Street and UE-Globalists, etc  https://www.elrothschild.com/ — band together to resist the challenge to their asset-stripping mentality.

As for globalism, the idea was to encourage a peaceful world, where trade and commerce will benefit all nations… but Elite avarice and their predilection for war and conflict defeats that notion. Meanwhile, let’s hope this tariff issue truly is a “storm in a teacup”,  and will quickly blow over. In other words, like many US Americans, personally I support Trump’s effort to return manufacturing to the US. Even so, the likelihood of such efforts succeeding is exceedingly remote.

One other option is that America’s real or imagined enemies – which Trump has declared to be BRIC’s – https://www.news24.com/fin24/economy/trump-fires-early-warning-shot-at-dollars-would-be-challengers-20241208 will take advantage of this opportunity to sideline the US dollar even more. China may sell much more in the way of US debt that it holds. India might turn fully to the east. Russia may finally nail Country-404 into a coffin. Iran could end its fatwa on the production of nuclear weapons. While expanding trade with one another…

After all, global marginalization of  the dollar US is the only way to end wars for Israel, for Mammon and for Empire – or at least to reduce their scope.

Steve Brown