Currency War and Economic Shifts #

The dollar experienced a notable rise following Election Day, driven by investor speculation around Donald Trump’s economic agenda, emphasizing low taxes and high tariffs. These policies threaten to disrupt global trade and accelerate inflation. In a new development, Trump suggested imposing hefty tariffs on BRICS countries if they abandon the dollar or create a new currency. “They will face 100% Tariffs,” he warned.

Simultaneously, there are signs of a diminishing appeal for the dollar. Discussions during a recent BRICS summit focused on reshaping global markets, with Moscow and Beijing seeking to mitigate U.S. sanctions and Brazil proposing an alternative currency for Mercosur. Current economic analyses suggest no immediate risk to the dollar’s position as the global reserve currency. Yet, U.S. allies express growing concern over potential trade wars.

Trump’s ongoing grievances about the U.S. trade deficit highlight his belief that a weaker dollar might be fundamental for resolving this issue. A trade war, however, threatens broader economic growth, and Trump’s recent threats are seen as a strategic move to initiate new trade negotiations.

In other economic news, the Biden administration announced new restrictions on technology sales to China, affecting advanced chips and machinery, while preparing for potential conflicts over Taiwan. Russia’s economy faces challenges with the ruble sinking to a two-year low against the dollar, fueled by inflation fears and high interest rates. As cracks appear in Russia’s wartime economy amid U.S. sanctions, there are questions about the long-term viability of Russia’s involvement in Ukraine.

Amidst these geopolitical shifts, the crypto community gains political influence with the anticipated return of Trump to presidency. Allegations arise about several tech founders being denied banking services, although details and evidence remain elusive. This situation draws comparisons to earlier initiatives targeting businesses unfavored politically. The narrative suggests increased pressure on the Biden administration from crypto advocates and hints at a potential shift in policies with Trump’s return.

The unfolding economics landscape, influenced by global and domestic policies, highlights the unpredictability of future trade dynamics and geopolitical relations.