Wednesday, August 13, 2025

DEREK: The rest of the world likes having instant liquidity, and they won't take on these changes for free. They need an incentive to change. Tariffs are the incentive.

There are absolutely geopolitical aspects to what Trump and the economic team are doing, but I think people sometimes get so hung up on that as to forget... it really is about the trade. The trading system before Trump 2.0 was fundamentally exploitative of America. It was literally built to siphon off the funds of America and to send those dollars overseas. People told you that wasn't happening because those countries had to invest back in the United States, but the devil is in the details. They weren't INVESTING in the United States. They were taking on US treasuries in exchange for the goods they sent to the US. No US business ever saw that money. That is what's going to change. The US is probably still going to run trade deficits to some degree, especially with certain countries. We are actually built to handle trade deficits uniquely well. That's the grain of truth upon which the empire of lies was built. But those trade deficits should be invested into American businesses. Not sitting around as promissory notes from the Fed. Not serving as instant liquidity for the rest of the world. The rest of the world likes having instant liquidity, and they won't take on these changes for free. They need an incentive to change. Tariffs are the incentive.

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