How Russia, China are pushing Trump toward economic suicide

Can a global crisis be avoided?

Actually, yes. Even despite a massive drop in stock markets. This drop happened against the background of very expensive markets, but the bubbles haven’t burst yet. In fact, for now, the markets have simply changed direction and are heading downward. Coming down from historical highs, which have been constantly updated in recent years. Therefore, by the way, one should be more cautious about reports of “the biggest losses in history,” because they are counted in absolute, not relative figures. And since everything has never been as expensive as it is now, any drop immediately seems significant in absolute numbers.

But so far, the drops are not record-breaking. So far. Though very large. A drop of the key U.S. market index by 11 percent in two days is a very unusual event.

What needs to happen for the situation to be corrected? A miracle

Why a miracle? Because the destructive policy needs to be replaced with an adequate one. For this, first and foremost, the trade war must be stopped. But who will stop it? Trump, who is confident in his own genius? To whom the Russians are whispering in his ear that he is doing everything right, that protests against him are all the work of insidious enemies. That the terrible deep state has conceived a color revolution in the U.S., and only the wise Trump can stop it. Or Trump, who is being goaded by the Chinese, escalating the trade war? And Trump will not hear any counter-signals. All the more because for now, those protesting against Trump are the same people who voted against him. Not a reason for him to respond.

"And when will the consequences come? Firstly, Trump is somehow confident that there will be no consequences. And secondly, by then it will be too late. When all non-MAGA Trump voters are shocked by the economic consequences of his actions, it will be too late. Well, and MAGA will always believe in their messiah."

The paradox is also that Trump is deepening the illness that made the choice of a populist in the U.S. possible. There are a lot of dissatisfied people in the U.S. whose standard of living has declined in recent decades. And Trump says that the Chinese are to blame for everything, that they took the jobs, the globalists, and of course, Biden. That is, the problem is external. And we must fight this terrible enemy.

But if everything were bad in the U.S. and external enemies had taken some jobs, then there should be massive unemployment in the U.S. But there isn’t. Trump came to power amid full employment. That is, unemployment is nearly nonexistent. And this is against the backdrop of large-scale migration. And migrants also cannot avoid working. Because they need something to eat.

So who stole jobs from the U.S. if there is no unemployment? That is, Americans are working. They have jobs. So there is no point in dragging more manufacturing back into the U.S. at such a cost if your goal is just job creation.

So what has changed? Inequality. Inequality has significantly increased in the U.S. Which is what the once-wealthy and large middle class feels. So the fight must be against inequality. And what does Trump do? He worsens it, once again lowering the tax burden on the richest. Bingo. And again, many are dissatisfied. And again, a demand for populism.

"As a result, Trump’s absolutely destructive steps to destroy his own alliances, discredit the U.S. as a trade partner, increase uncertainty in the economy, fuel inflation, and provoke a recession. And also undermine trust in the dollar. As a reserve currency. The foundation of the U.S. economy’s power for the last 70 years."

In short, it all looks like a lucky lottery ticket for Xi. And that’s why he escalates the trade war. And the Russians, of course, are happy that the U.S. is burying itself. And they stroke the ego of the U.S. president.

So will Xi de-escalate? No. Why should he. Yes, the Chinese economy will suffer. But there is no democracy in China. And economic logic is secondary compared to confrontation with the U.S. Just as Trump is saving Putin from disgrace, he is returning Xi to the big game. And this after the Chinese economy passed its peak, demography is screaming crisis, and money has started flowing from China to India and other countries. A gift of fate.

And so Trump won’t stop. He’ll continue the chaos. He will attack the Fed, undermining trust there too. Making the crisis inevitable.

Such are the prospects. And somewhere, Xi and Putin are just sitting and smiling…

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About the author: Serhii Fursa, investment expert, blogger.

The editorial team does not always share the views expressed by blog authors.