Let’s face it.
Faith in America is waning, fast.
No longer a ‘leader’ geopolitically, Washington’s retrenchment under Trump, along with his zero-sum tax tariff grab, is making the world’s eyes jaundiced.
America is acting like a rogue state, not a leader.
And Trump is acting like a tinpot despot dictator, not a President.
What does this all add up to?
A lack of faith in America, but more importantly, the global financial community is saying its time to pass the gauntlet to a nation or group of nations that are more stable, rational and reasonable.
That, doesn’t in any way describe America today.
America has become irrational, unreasonable and a zero-sum player of financial gamesmanship.
And because of Trump’s irresponsible and irrational behaviour, globally, investors are moving away from U.S. treasuries. This would seem to be counterintuitive, as treasuries are usually where people go in times of economic uncertainty.
Financial experts are worried.
“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutuall Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”
And, they are.
As yields move higher, you’ll see your borrowing rates move higher too…and every corporation uses these funding markets. If they get more expensive, they’re going to have to pass along those costs customers or cut costs by cutting jobs.”
Not only that, but Trump’s tariff threats have made America seem hostile and unstable even to longtime allies.
I would contest that, it doesn’t ‘seem’ that way, it is fact.
Trump’s 90 day pause on many tariffs, is actually Trump having to ‘walk back’ his stupidity in creating the tariffs in the first place.
Wells Fargo spokesman stated,” we’re worried about a hit in confidence in the U.S., too, that it’s way too early to be sure and that sell-off may stop soon anyway.”
So where is money going?
Out of America. To other countries bonds and other currencies.
That’s where they’re going.
America is no longer considered ‘the’ international refuge. What is happening is now a new faith in diversification and a multipolar financial world.
Faith in America isn’t just waning….it’s fleeing.
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