Dead Tired
Trump is now promising $5,000 to every American adult if the Republicans win the November elections. An injection of more than $1 trillion into consumption would obviously be inflationary, at the very moment when he is demanding that his central bank cut its rates — failing which he would interrupt all trade with countries running a trade surplus vis-à-vis the United States.
The paradox is reminiscent of Erdogan, who maintained in Turkey an activist policy of artificially low interest rates that contributed to sending inflation soaring to 70% in 2022 (35% today). Meanwhile, the lira has gone, over 20 years, from 1.5 to 50 per $1.
At the same time, the Treasury is manipulating the markets by progressively converting U.S. sovereign debt into 3-month Treasury bills: because it is becoming too expensive for the United States of America to finance itself over the long term at 5%. An authentic flight into the unknown as it postpones the problem instead of solving it and makes this country, indebted to the tune of $40 trillion, entirely dependent on market fluctuations.
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