What I learn from Econ 101 is:
Net export (export > import) nations should keep currency weak.
Net import (import > export) nations should keep currency strong.
For example, Singapore is a net import nation, so keep S$ strong to avoid imported inflation.
Regardless of whether you want a strong currency or a weak currency, governments actually have very limited tools to manipulate currencies.
That is, if the said country doesn’t have capital control. In a country with free capital flow like the US, currency is determined mainly by strength of the economy and interests rate.
Think of currency as an artificial token used in Disneyland or something. If you want to take rides you need to pay with Disney tokens. If the theme park is popular people will want those tokens.
So if American economy is strong foreigners will want to invest in America. And to do that they need USD. Strong economy => strong USD, all else equal.
Another factor is interests rate. If US rate is high foreigners will want USD to earn that yield.
If Trump wants a weaker USD he can do that by tanking the US economy. Fewer foreigners will want to invest in the US and Fed will be forced to cut rates. Achieving both in one swoop.
Actually never saw any media articulated it like that.
I don’t know why you are so against media. At least they fact check their stuff. I’d put more weight on it than some randos on Twitter. There is a difference between opinion pieces and news articles. The former is, yeah, just some dude’s opinions. The latter has facts in them, that you can verify yourself if you don’t trust it.
What I wrote is mostly logic and common sense. You can argue against it with your own logic.
Nope. Bringing down the economy is not what I think Trump wants. It is what his policies do.
Trump is simply a moron surrounded by sycophants. He truly thinks tariffs will strengthen the economy. You can go on Twitter to read the twisted reasoning of his cult. They truly believe in this garbage, stupid as it is.
White House’s Deputy Press Secretary posted on Twitter saying, no, no, no, we calculated the tariffs using some fancy formula. But it’s the exact same thing as just dividing trade deficit by import. Just hiding behind some Greek letters. The first two terms in the denominator multiply to 1. So they literally do nothing in that fancy-looking formula.
You can’t make this up. These mfers are dumb as a rock. And they lie. The worst combination.
Last time we had huge tariffs we ended up in WW2 soon after. Crazy things can happen again now as world order is redefined. China may gain geopolitically at the expense of US. The whole world is looking for a new stable big partner.
Inflation concerns is for economists.
Consumers care about elevated cost of living and permanent price increases.
For example, prices can increase in year 1 to 30% and then stay there for year 2. Economists would celebrate that there is no inflation in year 2. However, consumers would bear the permanent price increase of 30%.
These people are dumb. Some things just can’t be made in the US. Or will be much more costly compared to foreign sources.
For example we can’t grow watermelon here in December because of something called winters. We have to import them from South America. I am not aware coffee beans are grown here at all either. Maybe some small artisan coffee growers in Hawaii that charge double?
For things really low valued like tshirts or toasters even if you hike tariffs to 100% imports are still cheaper. Maybe at 200% tariffs you have parity but we ended up with prices 3x of what it is before.
These dumb people keep thinking jobs will come back. But first most jobs won’t. And second even if some jobs do come back people don’t have jobs for the sake of having jobs. At the end of the day you use the money you make to buy stuff. And now everything is more expensive than before and living standards go lower.
The Fed argument is also dumb. Inflation will be rocketing up if you tariff every single import. They say sure just make things in the US. But that means factories need to hire way more workers. Unemployment is at decade low and what will that do to inflation?