Global Economic Fragmentation

[Person Man]

The trade policies pursued by the new administration can have a direct impact on global economic fragmentation. Changes in tariffs, trade agreements, and trade relations can affect the flow of goods and services between countries, potentially leading to trade disputes or barriers that fragment global trade.

Well thanks for your academic answer. But both Trump and Biden regardless of who is elected will probably seek pretty similar economic policy as relates to foreign trade. Both as well as their trade surrogates are doing, have done, or heavily signaling they are going toward tariffs, protectionism, "fair trade" versus "free trade", American jobs first. Industrial policy is coming back into vogue.

If you realize this will all increase inflation, congratulations, you are smarter than most people in the world and everyone in the financial markets only concerned with rate cuts. Both Biden and Trump are making a bet of to be anti-mercantilism as currently practiced globally (this is heavily driven by China, but countries the likes of Japan and Germany would be affected as well), they have to be protectionist. I think both would take a deal where U.S. jobs increase 5% in exchange for costs on everything going up 10%. The 2% inflation target is done for the foreseeable future unless the CPI rate is heavily gamed, which it is.

In this scenario, U.S jobs would increase by 0%

That's where Trump and Biden are both going. They've both announced it, just with their own personal flourishes on it. Universal free trade is dead.

Trump is an incoherent ignoramus. During his Presidency he wanted to force the Chinese company that owns Tik Tok to tell it off, now he defends it.

Biden is coherent and understands policy. I think he wants to engage in 'friendshoring' basically getting the U.S and allies away from China and Russia but there are Democrats (and Republicans) who want to engage in Autarky, and Biden is not necessarily averse to fighting against that for domestic political reasons.

The Trudeau administration were scared pretty sh*tless a little more than a year ago by Biden's electric vehicles subsidies that notably said nothing about Ontario. I see nothing beyond words there from Biden. David Herle and Scott Reid will tell you relations never recovered under Biden to what they were pre-Trump. Trump calls it America First or MAGA. Biden frames it as pro-worker, pro-labor. The end result is the same. Trump is effectively a Democrat economically ex-taxes. And Europe at the moment are not in the friendshoring plans. Australia, Britain, and Japan are.

The world right now is heading for a very dark place in my opinion. I see a pre-World War I European mentality out there when you look under the covers at what is going on economically. It’s heading there whether Trump or Biden get elected, although trajectories in either case would be different. I think a more globalized war becoming reality I’m probably at 1 in 3, and it’s not necessarily over Ukraine. Biden has a sense of institutional restraint in him but is just not the leader I trust in such a situation. Trump in contrast has no restraints at all. That can be positive, but can also be very negative. There's this Western mentality of everything will be fine because we have the money and we don't have to ask our citizens to be required to sacrifice anything. I think that era is over and how are people going to react?

But no one gives a sh*t what I think, I've acknowledged that, so I just sit back and wait.

I've been saying this since 2015. I just don't know how a 1913 world would work with 2024 world technology. A part of me just thinks that there's going to be this three-legged stool of chaos, fraud, and good old-fashioned inertia that keeps the world stagnant, but intact for decades, if not generations. This possible state of affairs is probably no more likely than a 19-year old's what-if scenario about World War I being fought with modern technology. What happens could also be somewhere between these extremes or worse than we could imagine. There might even be an upside risk from new medical and engineering marvels, but this has yet to materialize substantially.  This is the case even without discussing the upside and downside risks of AI or Global Warming. Especially in a world where everyone hates each other and everyone is getting their rights taken away.

I guess what I am trying to say- is when you say "a very dark place", you mean that you honestly have no idea what is going to happen and don't really see a viable long-term sitation at this point?

[Person Man]

The trade policies pursued by the new administration can have a direct impact on global economic fragmentation. Changes in tariffs, trade agreements, and trade relations can affect the flow of goods and services between countries, potentially leading to trade disputes or barriers that fragment global trade.

Well thanks for your academic answer. But both Trump and Biden regardless of who is elected will probably seek pretty similar economic policy as relates to foreign trade. Both as well as their trade surrogates are doing, have done, or heavily signaling they are going toward tariffs, protectionism, "fair trade" versus "free trade", American jobs first. Industrial policy is coming back into vogue.

If you realize this will all increase inflation, congratulations, you are smarter than most people in the world and everyone in the financial markets only concerned with rate cuts. Both Biden and Trump are making a bet of to be anti-mercantilism as currently practiced globally (this is heavily driven by China, but countries the likes of Japan and Germany would be affected as well), they have to be protectionist. I think both would take a deal where U.S. jobs increase 5% in exchange for costs on everything going up 10%. The 2% inflation target is done for the foreseeable future unless the CPI rate is heavily gamed, which it is.

In this scenario, U.S jobs would increase by 0%

That's where Trump and Biden are both going. They've both announced it, just with their own personal flourishes on it. Universal free trade is dead.

Trump is an incoherent ignoramus. During his Presidency he wanted to force the Chinese company that owns Tik Tok to tell it off, now he defends it.

Biden is coherent and understands policy. I think he wants to engage in 'friendshoring' basically getting the U.S and allies away from China and Russia but there are Democrats (and Republicans) who want to engage in Autarky, and Biden is not necessarily averse to fighting against that for domestic political reasons.

The Trudeau administration were scared pretty sh*tless a little more than a year ago by Biden's electric vehicles subsidies that notably said nothing about Ontario. I see nothing beyond words there from Biden. David Herle and Scott Reid will tell you relations never recovered under Biden to what they were pre-Trump. Trump calls it America First or MAGA. Biden frames it as pro-worker, pro-labor. The end result is the same. Trump is effectively a Democrat economically ex-taxes. And Europe at the moment are not in the friendshoring plans. Australia, Britain, and Japan are.

The world right now is heading for a very dark place in my opinion. I see a pre-World War I European mentality out there when you look under the covers at what is going on economically. It’s heading there whether Trump or Biden get elected, although trajectories in either case would be different. I think a more globalized war becoming reality I’m probably at 1 in 3, and it’s not necessarily over Ukraine. Biden has a sense of institutional restraint in him but is just not the leader I trust in such a situation. Trump in contrast has no restraints at all. That can be positive, but can also be very negative. There's this Western mentality of everything will be fine because we have the money and we don't have to ask our citizens to be required to sacrifice anything. I think that era is over and how are people going to react?

But no one gives a sh*t what I think, I've acknowledged that, so I just sit back and wait.

I've been saying this since 2015. I just don't know how a 1913 world would work with 2024 world technology. A part of me just thinks that there's going to be this three-legged stool of chaos, fraud, and good old-fashioned inertia that keeps the world stagnant, but intact for decades, if not generations. This possible state of affairs is probably no more likely than a 19-year old's what-if scenario about World War I being fought with modern technology. What happens could also be somewhere between these extremes or worse than we could imagine. There might even be an upside risk from new medical and engineering marvels, but this has yet to materialize substantially.  This is the case even without discussing the upside and downside risks of AI or Global Warming. Especially in a world where everyone hates each other and everyone is getting their rights taken away.

I guess what I am trying to say- is when you say "a very dark place", you mean that you honestly have no idea what is going to happen and don't really see a viable long-term sitation at this point?

There are always very possibilities of what could happen. As the line goes, they always seem obvious in hindsight, but in reality there are several/multiple possibilities.

It really looks like the world and country is behind the 8 ball in a way it might never have been before.

[Person Man]

The trade policies pursued by the new administration can have a direct impact on global economic fragmentation. Changes in tariffs, trade agreements, and trade relations can affect the flow of goods and services between countries, potentially leading to trade disputes or barriers that fragment global trade.

Well thanks for your academic answer. But both Trump and Biden regardless of who is elected will probably seek pretty similar economic policy as relates to foreign trade. Both as well as their trade surrogates are doing, have done, or heavily signaling they are going toward tariffs, protectionism, "fair trade" versus "free trade", American jobs first. Industrial policy is coming back into vogue.

If you realize this will all increase inflation, congratulations, you are smarter than most people in the world and everyone in the financial markets only concerned with rate cuts. Both Biden and Trump are making a bet of to be anti-mercantilism as currently practiced globally (this is heavily driven by China, but countries the likes of Japan and Germany would be affected as well), they have to be protectionist. I think both would take a deal where U.S. jobs increase 5% in exchange for costs on everything going up 10%. The 2% inflation target is done for the foreseeable future unless the CPI rate is heavily gamed, which it is.

In this scenario, U.S jobs would increase by 0%

That's where Trump and Biden are both going. They've both announced it, just with their own personal flourishes on it. Universal free trade is dead.

Trump is an incoherent ignoramus. During his Presidency he wanted to force the Chinese company that owns Tik Tok to tell it off, now he defends it.

Biden is coherent and understands policy. I think he wants to engage in 'friendshoring' basically getting the U.S and allies away from China and Russia but there are Democrats (and Republicans) who want to engage in Autarky, and Biden is not necessarily averse to fighting against that for domestic political reasons.

The Trudeau administration were scared pretty sh*tless a little more than a year ago by Biden's electric vehicles subsidies that notably said nothing about Ontario. I see nothing beyond words there from Biden. David Herle and Scott Reid will tell you relations never recovered under Biden to what they were pre-Trump. Trump calls it America First or MAGA. Biden frames it as pro-worker, pro-labor. The end result is the same. Trump is effectively a Democrat economically ex-taxes. And Europe at the moment are not in the friendshoring plans. Australia, Britain, and Japan are.

The world right now is heading for a very dark place in my opinion. I see a pre-World War I European mentality out there when you look under the covers at what is going on economically. It’s heading there whether Trump or Biden get elected, although trajectories in either case would be different. I think a more globalized war becoming reality I’m probably at 1 in 3, and it’s not necessarily over Ukraine. Biden has a sense of institutional restraint in him but is just not the leader I trust in such a situation. Trump in contrast has no restraints at all. That can be positive, but can also be very negative. There's this Western mentality of everything will be fine because we have the money and we don't have to ask our citizens to be required to sacrifice anything. I think that era is over and how are people going to react?

But no one gives a sh*t what I think, I've acknowledged that, so I just sit back and wait.

I've been saying this since 2015. I just don't know how a 1913 world would work with 2024 world technology. A part of me just thinks that there's going to be this three-legged stool of chaos, fraud, and good old-fashioned inertia that keeps the world stagnant, but intact for decades, if not generations. This possible state of affairs is probably no more likely than a 19-year old's what-if scenario about World War I being fought with modern technology. What happens could also be somewhere between these extremes or worse than we could imagine. There might even be an upside risk from new medical and engineering marvels, but this has yet to materialize substantially.  This is the case even without discussing the upside and downside risks of AI or Global Warming. Especially in a world where everyone hates each other and everyone is getting their rights taken away.

I guess what I am trying to say- is when you say "a very dark place", you mean that you honestly have no idea what is going to happen and don't really see a viable long-term sitation at this point?

There are always very possibilities of what could happen. As the line goes, they always seem obvious in hindsight, but in reality there are several/multiple possibilities.

It really looks like the world and country is behind the 8 ball in a way it might never have been before.

From an economics perspective for the U.S, I think the biggest challenge clearly would be losing the world reserve currency/petrodollar status.

That will either be the catalyst of getting us off of oil and bringing jobs back home but more likely it will cause consistent 7% inflation and put our national security at risk.