American Vertigo – Currency Thoughts
American Vertigo
April 9, 2025
Who as a child didn’t discover the joy of spinning round & round and the ensuing sensation of dizziness? Floating like a butterfly and stinging like a bee, President Trump’s style is full of razzle-dazzling action that forces consumers, investors, business planners, news reporters, and other world leaders into a never-ending chase that rarely catches up. It’s all very exhausting and not seemingly a way to promote the kind of national commitment to a set of shared goals, values and community that carried America’s military and domestic effort to a total victory in World War 2.
Today’s sudden shift in the details of U.S. tariff policy, transmitted at 13:18 EDT on Truth Social, was the latest example of the president’s gift for turning everything upside down on a moment’s notice. Investors got an immediate high from this latest sharp reversal, but general confidence in plans of any sort took another blow. When the future becomes highly unpredictable, not just some of the time but always, one common tendency is to just stay put and do absolutely nothing but fret and wait for the maelstrom to pass. If enough economic actors act similarly, the effect on economic growth skews to the downside. So while today’s announced pause for many tariff hikes that were just a little over 13 hours old elicited much relief and glee, a longer-term risk persists.
If the main intent of the tariffs is to renegotiate trade deals and much fairer trade practices by other countries, American manufacturing would gain a much more price competitive position than before in one sense. However, the greatly reduced relative size of that sector of the U.S. economy stems from many other factors as well, some of which due to elapsed time will be very hard to reclaim. In the most ideal of scenarios, it will still take considerable time to restore America’s economy to what the president’s followers seek. Moreover, the agenda and style have left voters highly divided and lost America far more friends than it has won.
All this may not necessarily go poorly for President Trump. With a work style that dares anyone to keep up with him, he has managed to stay one step ahead. Congress is neutralized, and he has proven far too quick for the slow motion of the courts. At the moment and as events are now evolving, the quest to make America greater seems far more difficult than the objective of consolidating and eventually solidifying the politics of Trump and his closest supporters. Put differently, four Chapter 11 bankruptcies in his former life as a businessman made many people who trusted in Trump worse off, but he has clearly emerged in a far greater position. Houdini would be proud.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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