Trump 2.0, Gold and the Reset Path
The Way Out of This Mess
Housekeeping: good afternoon.
Contents ( 800 words)
The Death of Globalism and the Weaker Dollar
Credit, Trust, and the Bond Conundrum
The Imperative to Make and Sell
Protectionism, Tariffs, and Inflation
The Dollar Dilemma and the Fed’s Role
Gold, Mercantilism, and the Path Forward
Sacrifices of Recalibration
Risks of Inaction
The Death of Globalism and the Weaker Dollar
Yesterday, a report from T.S. Lombard aboutThe Death of Globalism outlined the anticipated economic recalibration under a potential Trump 2.0 administration. At its core, the analysis predicts a shift in monetary policy to prioritize production and trade over financial dominance. A key takeaway is Trump’s expected push for a weaker dollar, reversing decades of strong-dollar advocacy dating back to the Reagan era.
Quoting the report’s authors, Stephen Blitz and Grace Fan, “The Hamiltonian era of global banking dominance is over… and the Fed will adjust to the new reality of economic priorities.”
This alignment with the administration’s goals implies an era of easing monetary policy. In short, the dollar must decline for Trump’s economic objectives to succeed.
Credit, Trust, and the Bond Conundrum
In this new reality, trust is a dwindling commodity. Internationally, fewer nations are willing to lend the U.S. money or buy its bonds at current rates. The result? Rising borrowing costs and a diminished standard of living. If credit dries up, international business must revert to cash-based transactions or strict 30-day settlements.
This paradigm shift extends to U.S. Treasury bonds. Historically, these bonds served as collateral for global trade, their yields generating dollars to fuel economic activity. Without a trusted bond market, global participants will seek a neutral store of value—a void gold is increasingly poised to fill.