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The Dollar Declines, Tariffs In View, and No Free Lunches

The User's Profile davefairtex January 26, 2025
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Currencies

The buck turned to confetti this week, dropping a YUGE 1.96 (-1.79%) to 107.25, plunging through the 50 MA, and it is now in a daily/weekly downtrend.  Ouch.

As we know in goldbug-land, dollar-confetti is always about “money printing.” Well except for this time. The best I can figure it, this week’s dollar-confetti event was about Trump not being so mean and nasty with his tariffs as he previously advertised, and so money fled the buck back into the other “worthless fiat currencies.”

Here’s a Mockingbird piece on tariffs – apparently they are now just being used as a targeted negotiating tool with respect to the migrant invasion, focused on Cartel-Mexico and Turdeau-Canada.

Trump threatens steep tariffs against Canada and Mexico [Jan 21] (source – CBS);
+ When asked about his plans for blanket tariffs on U.S. imports, Mr. Trump said they remain a possibility, but “we’re not ready for that yet.” As a candidate during the 2024 presidential campaign, he proposed across-the-board tariffs of 10% to 20% on all U.S. imports
+ “We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people — Canada’s a very bad abuser also — vast numbers of people to come in, and fentanyl to come in…”
+ Stephanie Brinley, associate director, AutoIntelligence, at S&P Mobility, expects the Trump administration to eventually put a 10% tariff on all imports from Europe, Japan, and other countries besides Canada, China or Mexico. The research firm also forecasts a 30% duty on goods from mainland China.


Bioweapon Update

Vaccination Requirements (source – uscis.gov); “ALERT: Effective January 22, 2025, USCIS waives any and all requirements that applicants for adjustment of status to that of a lawful permanent resident … that they received the COVID-19 vaccination.”

New peer-reviewed study again confirms childhood vaccines are likely responsible for nearly 80% of the autism cases in US [Jan 24] (source – kirschsubstack);


Ed Dowd still sees a recession on the way.  His explanation: if the government pays $billions for the migrants (hotels, debit cards, etc), and you hire a bunch of useless government workers, and spend money on stupid things – that’s some serious economic stimulus.  When Trump stops all of it (which also reduces the deficit) – that also removes the stimulus.  Ed thinks if Trump keeps his word about the spending-cleanup and DOGE, it will cause a recession, at least in the short term, due to the reduction in wasteful spending.

Ed sees a Fed rate cut coming as a result, and a market correction too – at least in the risk assets.

Along those lines – will the new Treasury Secretary Bessent try to weaken the dollar?  That might help manufacturing, but Big Money would flee US assets (likely in advance), and the market crash (coming with prices at all-time highs) might be fairly dramatic.

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Top Comment

davefairtex:
Then he’ll make an offer that the non-criminal migrants “can’t refuse”: a free ticket back home, with no repercussions, a two-bag allowance, and a seat...
Anonymous Author by richcabot
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