Graabak on Nostr: Key Tariff Takeaways: 1: The Triffin Dilemma - The US dollar's reserve currency ...
Key Tariff Takeaways:
1: The Triffin Dilemma
- The US dollar's reserve currency status creates a trade imbalance: the US must run deficits to supply dollars globally.
- The US benefits from borrowing cheaply but wants to reduce its overvaluation.
- Tariffs serve as a tool to weaken the dollar, similar to the 1985 Plaza Accord.
2: Trump’s Personal Incentives
Trump’s primary goal is to lower the 10-year Treasury yield to boost real estate, which he is personally invested in.
He will pursue this goal aggressively, regardless of economic side effects.
3: Bitcoin as the Ultimate Hedge
- A weaker dollar and lower interest rates will drive capital into Bitcoin, contrary to mainstream belief.
- Inflation and economic distortions will push foreign nations to stimulate their economies, further debasing currencies.
- Unlike in the past, Bitcoin provides a digital escape from monetary manipulation.
Conclusion:
Tariffs are a short-term tool, but the long-term result is a weaker dollar, inflation, and capital flight into Bitcoin.
Both sides of the trade war dynamic will ultimately favor Bitcoin, making its rise inevitable.
1: The Triffin Dilemma
- The US dollar's reserve currency status creates a trade imbalance: the US must run deficits to supply dollars globally.
- The US benefits from borrowing cheaply but wants to reduce its overvaluation.
- Tariffs serve as a tool to weaken the dollar, similar to the 1985 Plaza Accord.
2: Trump’s Personal Incentives
Trump’s primary goal is to lower the 10-year Treasury yield to boost real estate, which he is personally invested in.
He will pursue this goal aggressively, regardless of economic side effects.
3: Bitcoin as the Ultimate Hedge
- A weaker dollar and lower interest rates will drive capital into Bitcoin, contrary to mainstream belief.
- Inflation and economic distortions will push foreign nations to stimulate their economies, further debasing currencies.
- Unlike in the past, Bitcoin provides a digital escape from monetary manipulation.
Conclusion:
Tariffs are a short-term tool, but the long-term result is a weaker dollar, inflation, and capital flight into Bitcoin.
Both sides of the trade war dynamic will ultimately favor Bitcoin, making its rise inevitable.