Trump 2.0 official thread

[generalmeng]

Actually to follow up, this reasoning appears to be identical to current chief economic advisor to trump Stephen Miran’s theory to do non-inflationary devaluation + restoring of manufacturing in the USA. So I would take this as a reiteration of the actual US plan, not merely Varoufakis’ theory.

Btw the original economic manifesto that Miran wrote for this plan has some hilarious misunderstandings of Chinas economy, honestly Zeihan level stuff

you know, with all of these PhD super duper smart economist or super duper PhD people, i really question their intelligence.

Social/human development is really a game of number, bigger number win. If a society have a lot of highly educated people, then that society will have higher pool of population to draw their productivity from. any population will follow the standard binomial distribution, this is like a natural law at this point.

The only way for USA to compete is really to reform their primary and secondary education system, so they have more educated domestic population to send to post secondary, and ultimately toward social productivity.

USA can bring manufacturing, and steel production back, but not through manual labour. USA need to innovate on automation to make steel production and manufacturing more price competitive. hiring more redneck union regards is not going to make their manufacturing more valuable. they will end up with more idiots who are overpaid for doing next to nothing. I do agree with varoufakis, the working population in usa will be screwed in the end, because in the long term, it will actually be more detrimental. i think there was a economist who said, the cheapest product usa produce is USD and if someone else is willing to sell steel for worthless paper, it is actually a good trade. only an idiot would pay US union labour to make steel.

some make the argument that USA need domestic steel in the case of a war with China. Well the whole reason for war is really USA sticking their nose into east asia. if USA pull out from asia, there is no security competition. although Japan and korea will be abandon, but honesty, that is actually better for the global security and economy.

 

[siegecrossbow]

Dude sold his soul just to sit in the cuck chair…

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[generalmeng]

Deepseek’s summary:

The document, titled *"A User’s Guide to Restructuring the Global Trading System"* by Stephen Miran of Hudson Bay Capital, explores potential reforms to the global trading and financial systems, particularly under a hypothetical second Trump administration. The essay focuses on addressing economic imbalances caused by the U.S. dollar's overvaluation, which has negatively impacted American manufacturing and trade competitiveness. Key points include:

1. **Economic Imbalances and the Dollar**: The U.S. dollar's role as the global reserve currency creates persistent overvaluation, leading to trade deficits and harming U.S. manufacturing. The Triffin dilemma explains how the U.S. must run deficits to supply global reserve assets, which becomes increasingly burdensome as global GDP grows.

2. **Tariffs as a Tool**: Tariffs, if offset by currency adjustments, can raise revenue without significant inflation. The 2018-2019 U.S.-China trade war demonstrated that tariffs, when accompanied by currency depreciation, can be noninflationary. Tariffs can also shift the burden of taxation to foreign nations by reducing their purchasing power.

3. **Currency Policy**: The U.S. could pursue multilateral or unilateral approaches to address currency misalignment. Multilateral agreements, like the Plaza Accord, could weaken the dollar, but cooperation from trading partners is uncertain. Unilateral measures, such as imposing fees on foreign holders of U.S. Treasuries, could also be used to reduce dollar demand.

4. **Market and Volatility Considerations**: Implementing tariffs and currency policies could lead to financial market volatility. Gradual implementation and coordination with the Federal Reserve could mitigate risks. Tariffs are likely to precede any significant currency policy changes, as they provide negotiating leverage and revenue.

5. **National Security and Trade**: The Trump administration is expected to intertwine trade policy with national security, using tariffs and currency policies to strengthen U.S. manufacturing and reduce reliance on foreign supply chains, particularly from China.

6. **Optimal Tariff Rates**: Economists suggest that moderate tariffs (up to 20%) can improve U.S. welfare by correcting trade imbalances and addressing foreign trade distortions. However, retaliatory tariffs from other nations could negate these benefits.

7. **Financial Market Consequences**: Changes to the global trading system could lead to increased currency volatility, shifts in asset prices, and a reconfiguration of global supply chains. The U.S. may also face challenges in maintaining the dollar's reserve status if other nations seek alternatives.

8. **Conclusion**: The essay outlines a path for the U.S. to reconfigure the global trading system to its advantage, but emphasizes the need for careful planning to avoid adverse economic and market consequences. Tariffs are likely to be the first tool used, followed by potential currency adjustments.

Overall, the document provides a detailed analysis of the tools available to reshape the global trading system, the trade-offs involved, and the potential economic and financial market impacts. It emphasizes the importance of balancing economic goals with the need to minimize volatility and maintain global stability.

This is reply to share my POV on the article, not to the person posting the deekseek summary.

point 1, US have the option to run federal deficit, they don't have to. They choose to do it to continue funding their reckless social programs, and probably tax cut to their elite class.

point 2, tariff shift burden to USA. US citizen are paying for the tariff. China just sell less stuff to USA, anything excess will be sold to some one else, or china cut back production. China's central bank will probably lower interest rate to offset this economic down turn. With an interest rate cut, RMB:USD will probably offset the effect of tariff.

point 3, the plaza accord, like Varoufakis suggested, trump and his team seem to want to bully china into appreciating RMB, or pay tariff, or exchange USD treasuries for 100 year low interest new bonds. China can just pay the tariff, china central bank cut interest, and tell USA to GTFO. when the currently held treasuries matures, US fed(gov) will have to pay back the principle, in which they will need to issue new treasuries to some one else. Option for US fed(gov) is give back principle (issue new treasuries), or default (USD become worthless). Central bank of China have the option to literally sit on their USD reserves and do nothing with it, and slowly off load it. Unless other wise USA shot themselve in the foot and cause USD reserve currency status to collapse, then US society as a whole will probably be severely screwed. China is not Japan. China have their own military, have their own economy, have their own resources. Will suck for chinese people for some times, but in the long run, China will likely recover faster than USA. Because China can actually make stuff for themselves in a cost effective manner. I think the biggest problem with these "economist" is that, they dont seem to understand, USD is worthless, unless USA make it valuable. to make their currency valuable, they actually need to back it up with either a reliable promised market, or sell goods. USA need to guaranty to the world, that USA is a reliable market. so far, their tariff action is signaling to the world USA is a not reliable market. maybe that is their intended effect to devalue the USD. but how are they going to address the problem of inflation? because everything is imported. certainly, getting americans to manufacture daily essential items are not cost effective, and it doesn't happen over night, lastly they dont even have the skill labour to do it.

point 8, they are doing this to make it look like repubicans are strong and promotion nationalism to get more votes

 

[Thecore]

i think there was a economist who said, the cheapest product usa produce is USD and if someone else is willing to sell steel for worthless paper, it is actually a good trade.

Peter Schiff says this kind of stuff all the time. His thesis is basically that China loses big time on trade with the US because China trades tangible goods for worthless green toilet paper. Of course his interest in pushing this narrative is to push his gold selling partnerships, but he's on the right track.

 

[BillRamengod]

Standard Juche image of Trump.
I encourage all US administration departments to hang this on the wall to honor him.
이세상에서내앞에있는태양은각하한분뿐이다. 트럼프 대통령, 만세!

 

[FairAndUnbiased]

Peter Schiff says this kind of stuff all the time. His thesis is basically that China loses big time on trade with the US because China trades tangible goods for worthless green toilet paper. Of course his interest in pushing this narrative is to push his gold selling partnerships, but he's on the right track.

I must point out that upkeeping the status of green TP isn't costless either. All the finance bros, economists from universities to banks, Treasury, Fed, etc. are all tied up in USD upkeep. That's a huge chunk of labor and capital tied up in USD production that's doing nothing else.

 

[Biscuits]

I must point out that upkeeping the status of green TP isn't costless either. All the finance bros, economists from universities to banks, Treasury, Fed, etc. are all tied up in USD upkeep. That's a huge chunk of labor and capital tied up in USD production that's doing nothing else.

The principle is exactly the same as gold/silver mine. You can only mine out as much as people around you need for their transactions. Doesn't matter how much thereotical reserves there are in the veins.

Quite some people assume this magically boosts your country's power, which isn't really true, or at least heavily depends on how well you invest and manage the "mining" business.

National power comes from how much resources and production you can put in circulation. If America could use reserve currency status to help increase revenue which is then smartly invested into manufacturing capabilities with wide appeal, the reverse currency status is helping US, otherwise not really.

 

[W20]

"the status of green TP"

A fascinating magic, but it works ... as long as it works

Two islands: one island works producing goods and the island next door pays them with palm leaves or "green TP"

I don't know what words to use to describe how fascinating a dominant and truly sovereign currency is

 

[fatzergling]

you know, with all of these PhD super duper smart economist or super duper PhD people, i really question their intelligence.

Social/human development is really a game of number, bigger number win. If a society have a lot of highly educated people, then that society will have higher pool of population to draw their productivity from. any population will follow the standard binomial distribution, this is like a natural law at this point.

The only way for USA to compete is really to reform their primary and secondary education system, so they have more educated domestic population to send to post secondary, and ultimately toward social productivity.

USA can bring manufacturing, and steel production back, but not through manual labour. USA need to innovate on automation to make steel production and manufacturing more price competitive. hiring more redneck union regards is not going to make their manufacturing more valuable. they will end up with more idiots who are overpaid for doing next to nothing. I do agree with varoufakis, the working population in usa will be screwed in the end, because in the long term, it will actually be more detrimental. i think there was a economist who said, the cheapest product usa produce is USD and if someone else is willing to sell steel for worthless paper, it is actually a good trade. only an idiot would pay US union labour to make steel.

some make the argument that USA need domestic steel in the case of a war with China. Well the whole reason for war is really USA sticking their nose into east asia. if USA pull out from asia, there is no security competition. although Japan and korea will be abandon, but honesty, that is actually better for the global security and economy.

US suffers from the equivalent of Dutch disease for human capital. Since the 1950's, US had the ability to import top scientists and engineers because the US could provide a much higher standard of living for them. This plentiful supply of human capital coincides surprisingly enough with US dismantlement of quality K-12 education. There is no need to educate people when you can import more compliant people from abroad. Losing this human capital stream would be disastrous, but the US is (not yet at least) at that stage.

With regards to bringing back manufacturing/production, US workers are still unionized in these sectors. Given how workers are treated by US corporations, they will fight like hell to preserve what privileges they have left, even if it means burning the whole industry down. Negotiating a new position for these workers in the new "smart" factories will play a major role in restoring production. You can't expect to treat potential human capital like garbage and expect them to work wonders.

I must point out that upkeeping the status of green TP isn't costless either. All the finance bros, economists from universities to banks, Treasury, Fed, etc. are all tied up in USD upkeep. That's a huge chunk of labor and capital tied up in USD production that's doing nothing else.

As a consequence, finance bro can make more than half a million a year while engineers make do with 100k. How you gonna create engineers when finance bro life is much better?

 

[Biscuits]

"the status of green TP"

A fascinating magic, but it works ... as long as it works

Two islands: one island works producing goods and the island next door pays them with palm leaves or "green TP"

I don't know what words to use to describe how fascinating a dominant and truly sovereign currency is

One lord owns the coin mint, the other owns the farms, garrison, smiths, stables and castle.

What is truly fascinating is how dumb the first guy needs to be to think he was any leverage or power over the latter