Will Bitcoin Benefit From The Trade War?
The trade war between Trump and the rest of the world has kicked of in earnest with Trump's unveiling of sweeping tariffs on so called "Liberation Day". The entire world was essentially put on notice that there is a new sheriff in town and things will be done different from now on.
The is the sentiment that won Trump the election so it is no wonder that Trump would follow through on changing how the world relates to America. President Trump hit the entire world with reciprocal tariffs and some places where people don't live which I find hilarious
I wonder who was in charge of making this tariff list because they need fired to be honest. Screams incompetence but that for another day. Will Bitcoin benefit from the trade war?
Bitcoin will benefit because the world now believes that the United States can not be trusted to honor its word or commitments. Why would any country want to to business with a country that says one thing and does another. Trump has upended the very economic order that the US created in the first place! Is this a smart idea? Only time will tell to be honest.
The worst thing Trump did was created doubt and uncertainty for the bond market. The bond market is the main engine of economic power for the US government. Having the world buy your bonds gives the United States unparalleled economic power to flex all around the world. The US might have military bases all over the world and uses it to conduct foreign policy but its the economic power of the US that gives it the influence that it has right now.
All that comes into question now. When you shit on your friends and buddy up with your adversaries it not a good look and allies will respond accordingly. Why piss off Canada and Mexico? What policy objective is that accomplishing? Picking fights with Europe? Not smart politics. I get wanting allies to pick up the slack on their end or have better trade relations but there is the right way to do it and a wrong way to do it. Trump undoubtedly goes about it the wrong way.
Has he not heard the saying 'You catch more flies with honey than vinegar?" When you are cordial with people and they like you its a lot easier to get people to do things for you or see things from you perspective versus talking shit and bullying them into submission.
Most countries are not going to tolerate this type of political brinkmanship and will decide that they need to take their money elsewhere. You can expect for them to withdraw their money from the stock market and the bond market over the next 12-24 months. Guess what happens after that? Bond yields go through the roof and the stock market takes a shit! You can kiss your 401k goodbye! You'd have to be suicidal to have your money in the stock market right now.
In this scenario which is mostly likely to occur, Bitcoin goes to the moon because governments are going to be looking for a neutral reserve asset that can't be manipulated like US bonds. Bitcoin is the perfect solution to their problem. Once one major government or central bank puts Bitcoin on the balance sheet its game over for the dollar and the bonds. We might be closer to the end game than we think, and that is scary to think about. "Sometimes there are decades where nothing happens and there are weeks where decades happen." ~ Lenin
Crazy to quote a communist but he isn't wrong about history. We are living through a life alter paradigm shift. It is scary and exhilarating all at the same time. What a time to be alive ladies and gentlemen! Buckle up! Its going to get interesting!