Bombastic Bullying Brutes – Fat Tail Daily | Australian Markets

‘We are born into this time and must bravely follow the path to the destined end. There is no other way.’

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–Oswald Spengler

As not too long ago as 1999, the US had a funds surplus…debt of solely $5.6 trillion…and stocks value more (in gold and greenback phrases) than ever in historical past. The US was nonetheless extensively admired. Its federal debt was purchased as a financial reserve all around the world. It wasn’t at conflict and wasn’t sponsoring main wars or paying for mass murders abroad. It inspired free trade and, typically, favored the rule of law.

That was in all probability the apogee for the US…and for Western Civilization. It has been downhill ever since. At least, that’s how it appears to be like to us.

This will not be an authentic level of view. Oswald Spengler foresaw the height of Western Civilization coming across the 12 months 2000. And even Donald Trump observed the decline and pledged to show it round.

And now that we’re a quarter of a century into the down cycle, the true questions for us stay the identical: how far down will it go…and how will it get there.

Spengler guessed that the highest for Western Civilization could be adopted by a tough period of ‘Caesarism’ (which we’ve described as ‘Big Man Government’). Spengler noticed Benito Mussolini as an early instance of the post-democratic chief.

“Democracy is beautiful in theory,” mentioned Mussolini. “In practice it is a fallacy. You in America will see that some day.” Spengler died in 1936; he by no means met Donald Trump.

Yesterday, we regarded on the manner tariffs determine within the massive scheme of issues. In short, they appear to verify the ‘declining empire hypothesis.’ Restrictions on trade gradual an financial system down and make people poorer. But additionally they nudge it away from civilization itself.

Whether trade is a trigger or an impact, we don’t know. But the 2 appear to go collectively. And restrictions on trade have a tendency to maneuver a society backwards — making it poorer…but additionally, like North Korea, much less free and fewer civilized.

Restraining trade appears to be a half of the new world order. The first pitch of the Trump workforce was that different international locations have been ‘ripping us off’ (presumably with high tariffs in comparison with our decrease ones). As a matter of equity, in addition to encouraging home manufacturing, tariffs could be made ‘reciprocal.’

But reciprocity fell by the wayside and the the negotiated offers are resulting in increased tariffs, not decrease ones. Even international locations with which the US has a trade surplus — the UK and Brazil, for instance — now face increased US tariffs.

Who pays? The Washington Post:

Tariffs hit U.S. corporations laborious, however companies take up them for now

The Trump administration’s tariffs are hitting corporations that do business within the United States. But costs haven’t mirrored them but in lots of instances.

In earnings studies, a number of corporations on Monday and Tuesday blamed tariffs for hurting their backside strains, together with automakers General Motors and Stellantis.

Companies will quickly raise costs to guard their margins. Then, customers pays.

Meanwhile, the US president continues to threaten even increased tariffs. The Hill:

President Trump not too long ago introduced his intent to impose a 200 % tariff on prescription drugs to lure drug manufacturing back to the U.S. This motion, if carried out, will come at great value to tens of millions of Americans already struggling to cowl their medical payments and power them deeper into health care debt.

What to make of it? What we make of it’s that tariffs have turn out to be simply one other sleazy solution to raise taxes and provides the Big Man more energy. They take us additional into the political world…of bullying, bombast and brute power. arms.

Regards,

Bill Bonner,
For The Daily Reckoning Australia

All advice is normal advice and has not taken into consideration your personal circumstances.

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