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United States43598 Posts
On April 05 2025 02:19 oBlade wrote:Show nested quote +On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before.
Wake up babe a new cope just dropped.
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United States43598 Posts
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places.
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Its funny, someone on a completely different gaming forum just dropped a very similar take.
the tl'dr was Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026
Guess they get their marching orders from the same place.
I wonder if they get paid in turnips
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On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Show nested quote +Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips
Was it a really really long post? You could have just found oBlade somewhere else
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On April 05 2025 02:34 WombaT wrote:Show nested quote +On April 05 2025 02:19 oBlade wrote:On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +https://www.youtube.com/watch?v=ie5IIrB7IdA There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before. I’m not sure if science has tested if copium can actually hit a lethal dose, but I’d definitely exercise more caution in future. If Trump exits office with a national debt lower than he inherited, I will eat my hat. Perhaps a shoe as well. Indeed I’ll have a full Michelin star standard 4 courses of various inedible items
10 year treasuries are at 4%, if they drop to 2% then the US saves $2 trillion refinancing about $10 trillion in debt that matures this year. And 2% is not a number that's unreasonable, it was at 2% fairly recently. The debt is a long term process but nobody else has cared since the time of Clinton.
On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Show nested quote +Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips
Where do you get the infinitely renewable gem "but it's Trump!" again? CNN? Reddit? The Daily Show? Bet you wish that was worth a turnip.
On April 05 2025 02:43 KwarK wrote:
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places.
Let's use a rough example.
Tariffs turn on, investors pull money out of Apple stock. Apple sells made in China Foxconn phones. Looks volatile and less safe.
Apple's own cash reserves are forced into investing in domestic manufacturing to compete for domestic demand in the US consumer base.
Money that used to be in Apple stock, belonging to investors, goes into treasury bond and into investing in companies that are Fords (Ford manufactures in the US and sells to the US). Very possible for money to be in both places. Not tough.
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I will admit that there is definitely a long term justification for these actions, that this is a plan that would work and reshape things exactly how they want.
But they are also extremely dumb and require a completely different people than is in charge. This is a strategy that would take well over a decade to bear fruit and require an immense amount of suffering to get there, suffering a democracy does not have the patience for. The case that is most obvious to anyone looking in is that everyone outside the us knows you can just kick the shit in of a rogue nation like this for a few years until their elections kick around and the party is thrown out of power. If you think that your end goal is a grand economic summit to get a breton woods level treaty signed you have to be a likeable person that isn't radioactive for anyone trying to get votes to work with.
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On April 05 2025 02:56 oBlade wrote:Show nested quote +On April 05 2025 02:34 WombaT wrote:On April 05 2025 02:19 oBlade wrote:On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +https://www.youtube.com/watch?v=ie5IIrB7IdA There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before. I’m not sure if science has tested if copium can actually hit a lethal dose, but I’d definitely exercise more caution in future. If Trump exits office with a national debt lower than he inherited, I will eat my hat. Perhaps a shoe as well. Indeed I’ll have a full Michelin star standard 4 courses of various inedible items 10 year treasuries are at 4%, if they drop to 2% then the US saves $2 trillion refinancing about $10 trillion in debt that matures this year. And 2% is not a number that's unreasonable, it was at 2% fairly recently. The debt is a long term process but nobody else has cared since the time of Clinton. Show nested quote +On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips Where do you get the infinitely renewable gem "but it's Trump!" again? CNN? Reddit? The Daily Show? Bet you wish that was worth a turnip. Show nested quote +On April 05 2025 02:43 KwarK wrote:
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places. Let's use a rough example. Tariffs turn on, investors pull money out of Apple stock. Apple sells made in China Foxconn phones. Looks volatile and less safe. Apple's own cash reserves are forced into investing in domestic manufacturing to compete for domestic demand in the US consumer base. Money that used to be in Apple stock, belonging to investors, goes into treasury bond and into investing in companies that are Fords (Ford manufactures in the US and sells to the US). Very possible for money to be in both places. Not tough.
- inflation?
- is a 2% US treasury bond a better investment then the stock market in other parts of the world?
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United States43598 Posts
On April 05 2025 02:56 oBlade wrote:Show nested quote +On April 05 2025 02:34 WombaT wrote:On April 05 2025 02:19 oBlade wrote:On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +https://www.youtube.com/watch?v=ie5IIrB7IdA There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before. I’m not sure if science has tested if copium can actually hit a lethal dose, but I’d definitely exercise more caution in future. If Trump exits office with a national debt lower than he inherited, I will eat my hat. Perhaps a shoe as well. Indeed I’ll have a full Michelin star standard 4 courses of various inedible items 10 year treasuries are at 4%, if they drop to 2% then the US saves $2 trillion refinancing about $10 trillion in debt that matures this year. And 2% is not a number that's unreasonable, it was at 2% fairly recently. The debt is a long term process but nobody else has cared since the time of Clinton. Show nested quote +On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips Where do you get the infinitely renewable gem "but it's Trump!" again? CNN? Reddit? The Daily Show? Bet you wish that was worth a turnip. Show nested quote +On April 05 2025 02:43 KwarK wrote:
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places. Let's use a rough example. Tariffs turn on, investors pull money out of Apple stock. Apple sells made in China Foxconn phones. Looks volatile and less safe. Apple's own cash reserves are forced into investing in domestic manufacturing to compete for domestic demand in the US consumer base. Money that used to be in Apple stock, belonging to investors, goes into treasury bond and into investing in companies that are Fords (Ford manufactures in the US and sells to the US). Very possible for money to be in both places. Not tough.
That's literally the opposite of how corporate financing works. The idea that companies will have more money to invest in capital expenditure if capital flees equity markets to treasuries is like insisting that ice is hot and fire is cold. It's just not true and no amount of argument is going to make it true.
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Is him starting this brave new strategy by launching a memecoin (which is only speculative and volatile) evidence that there was never that structured a plan, or just a particular fuck-you to anyone brave enough to 'invest in him'?
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United States43598 Posts
Let's put this another way. Where do you think all the cash that they have on hand which, in your plan, is going to be spent on capital expenditure is right now?
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I think I'm going to be sick. Dows at -2100 right now and we've got more than an hour left of the bleeding.
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Northern Ireland26265 Posts
On April 05 2025 03:24 Fleetfeet wrote:
Is him starting this brave new strategy by launching a memecoin (which is only speculative and volatile) evidence that there was never that structured a plan, or just a particular fuck-you to anyone brave enough to 'invest in him'?
We should discontinue the ‘memecoin’ designation at this stage, it’s a redundant descriptor, they are all memecoins.
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On April 05 2025 03:16 CuddlyCuteKitten wrote:Show nested quote +On April 05 2025 02:56 oBlade wrote:On April 05 2025 02:34 WombaT wrote:On April 05 2025 02:19 oBlade wrote:On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +https://www.youtube.com/watch?v=ie5IIrB7IdA There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before. I’m not sure if science has tested if copium can actually hit a lethal dose, but I’d definitely exercise more caution in future. If Trump exits office with a national debt lower than he inherited, I will eat my hat. Perhaps a shoe as well. Indeed I’ll have a full Michelin star standard 4 courses of various inedible items 10 year treasuries are at 4%, if they drop to 2% then the US saves $2 trillion refinancing about $10 trillion in debt that matures this year. And 2% is not a number that's unreasonable, it was at 2% fairly recently. The debt is a long term process but nobody else has cared since the time of Clinton. On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips Where do you get the infinitely renewable gem "but it's Trump!" again? CNN? Reddit? The Daily Show? Bet you wish that was worth a turnip. On April 05 2025 02:43 KwarK wrote:
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places. Let's use a rough example. Tariffs turn on, investors pull money out of Apple stock. Apple sells made in China Foxconn phones. Looks volatile and less safe. Apple's own cash reserves are forced into investing in domestic manufacturing to compete for domestic demand in the US consumer base. Money that used to be in Apple stock, belonging to investors, goes into treasury bond and into investing in companies that are Fords (Ford manufactures in the US and sells to the US). Very possible for money to be in both places. Not tough. - inflation? - is a 2% US treasury bond a better investment then the stock market in other parts of the world?
I don't know what the inflation question means. Inflation exists. Even if inflation is 20%, people holding 2% bonds are doing better than people with their cash under the mattress at 0%, and way ahead of a fund down 50% after speculative bubbles crash. Other than that I don't want to wrongly infer your point.
A 2% treasury bond is going to be a better investment than the stock market in other parts of the world for a few reasons: because except for countries that drop their own tariffs, or even countries that have no tariffs but run huge surpluses against the US, countries that have trade surpluses with the US are going to be hurting at the exact same time because one of their huge consumers, the US, is hammering demand for their products down with tariffs.
In short it might not be going to make sense to invest for example in the Indonesian clothes sector because US stocks are dropping due to tariffs, if there are huge tariffs on Indonesian clothes which means Indonesian clothes companies are going to be suffering lost revenue.
Other countries also have less investor friendly arrangements about capital gains and expatriating/repatriating money. The US is the single greatest stock market in the world, nobody else comes close. They are physically not big enough to absorb a lot of reallocation. The economies just aren't that big, so the capital markets behind them aren't either.
On April 05 2025 03:21 KwarK wrote:Show nested quote +On April 05 2025 02:56 oBlade wrote:On April 05 2025 02:34 WombaT wrote:On April 05 2025 02:19 oBlade wrote:On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +https://www.youtube.com/watch?v=ie5IIrB7IdA There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before. I’m not sure if science has tested if copium can actually hit a lethal dose, but I’d definitely exercise more caution in future. If Trump exits office with a national debt lower than he inherited, I will eat my hat. Perhaps a shoe as well. Indeed I’ll have a full Michelin star standard 4 courses of various inedible items 10 year treasuries are at 4%, if they drop to 2% then the US saves $2 trillion refinancing about $10 trillion in debt that matures this year. And 2% is not a number that's unreasonable, it was at 2% fairly recently. The debt is a long term process but nobody else has cared since the time of Clinton. On April 05 2025 02:46 Gorsameth wrote:Its funny, someone on a completely different gaming forum just dropped a very similar take. the tl'dr was Recap:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026 Guess they get their marching orders from the same place. I wonder if they get paid in turnips Where do you get the infinitely renewable gem "but it's Trump!" again? CNN? Reddit? The Daily Show? Bet you wish that was worth a turnip. On April 05 2025 02:43 KwarK wrote:
For real though the argument that he’s causing so much instability that capital will flee to a traditional safe harbour, treasuries, lowering the borrowing rates is tough to reconcile with an explicit policy of requiring huge new corporate capital investments in moving manufacturing stateside. Because they’re opposite things. And that makes it tough for them both to be true. Like the same money can’t be in both places because they’re two places. Let's use a rough example. Tariffs turn on, investors pull money out of Apple stock. Apple sells made in China Foxconn phones. Looks volatile and less safe. Apple's own cash reserves are forced into investing in domestic manufacturing to compete for domestic demand in the US consumer base. Money that used to be in Apple stock, belonging to investors, goes into treasury bond and into investing in companies that are Fords (Ford manufactures in the US and sells to the US). Very possible for money to be in both places. Not tough. That's literally the opposite of how corporate financing works. The idea that companies will have more money to invest in capital expenditure if capital flees equity markets to treasuries is like insisting that ice is hot and fire is cold. It's just not true and no amount of argument is going to make it true.
You're not understanding and it's not my fault, you just like disproving things nobody said.
Apple will not have more money when people migrate out of stocks. Apple if anything probably has less money because people are selling across the board. Also because they bought back their own stock to prop it up, and then Trump bombed it with tariffs so it dropped anyway which is hilarious. I never claimed they will have more money, or meant to.
They have to spend the money they are sitting on. They have to use the money they already have.
The crux is that Apple isn't a hedge fund. They are Apple. Apple has no choice facing competitive disadvantage to invest in themselves because they have a fiscal obligation to Apple, and its manufacturing, marketing, workers, factories, supply chains, IP, market share, software, and everything. That is their business. They can manage their cash in any fund they want but however much cash they have is ultimately only to serve the purpose of their business succeeding. When threatened by tariffs, they have to adjust. They have to react. They have to compensate. They have to spend the cash they already have on themselves. Right? How don't they? I mean it's a rough example, if we want to say Apple particularly are so cash-rich they can just choose to weather the storm, make no changes in their business, and hope in a few years tariffs are gone and their more prosperous business model pops back before their cash ran out, sure. Most companies will be reacting, even if my use of Apple as an example for its accessibility is causing issues due to its particular fitness for enduring macroeconomic swings.
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United States43598 Posts
Okay but the money they already have that you're going to have them spend on capex is currently in treasuries, right? And your plan is that they're going to take that money out of treasuries and spend it on capex. But your plan is also that they're going to increase the amount of money they hold in treasuries in order to lower rates.
What I'm trying to explain to you is that it can't be both.
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I'm pretty sure the biggest corpos in the world have some kind of hedging going on. Aren't stock buybacks a form of hedging? Also, Apple doesn't have to spend, they can "just" cut. Do a big 'ol hair cut across the board.
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United States43598 Posts
On April 05 2025 04:05 Uldridge wrote:
I'm pretty sure the biggest corpos in the world have some kind of hedging going on. Aren't stock buybacks a form of hedging? Also, Apple doesn't have to spend, they can "just" cut. Do a big 'ol hair cut across the board.
No
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Tariffs are inflationary in themselves. The Fed already said they will wait and see instead of decreasing interest rates.
Having a 4,1% unemployment and rehousing manufacturing at that scale drives inflation.
Massive investment in production drives inflation.
You either fight that inflation with higher interest which means the plan for lower long yield bonds gets fucked or you get massive inflation.
Sure the inflation will help you get rid of the debt even faster but it will also make every American much poorer at the same time.
This ties in with the bond yield. A 2% bond yield loses you money if inflation is above 2%. Of course it loses less money than if you have negative return in the stock market.
However, if inflation is lower in other currencies you can just stick it in that. And it will be, because the advantage you keep harping on is that the US buys a lot of shit which makes tariff effective and it produces not so much shit.
Guess what. That means it's the opposite for the rest of the world so we will have MORE goods to buy and worse economy, ergo lower inflation.
I find it real hard to believe you won't find a better investment opportunity than 2% US bonds with much higher inflation on the dollar regardless of if the world economy is going to shit or not.
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United States43598 Posts
Does everyone but oblade understand that the plan of increasing money in the bank is incompatible with the plan of reducing money in the bank? Am I explaining it poorly?
A plan of making borrowing cheaper for the government by causing uncertainty triggering capital flight to treasuries is incompatible with a plan of increasing capital investment and spend. The money is either being saved (treasuries) or it is being spent (new US factories) but it can't be both at the same time.
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On April 05 2025 04:08 KwarK wrote:Show nested quote +On April 05 2025 04:05 Uldridge wrote:
I'm pretty sure the biggest corpos in the world have some kind of hedging going on. Aren't stock buybacks a form of hedging? Also, Apple doesn't have to spend, they can "just" cut. Do a big 'ol hair cut across the board. No
Okay. Guess I'm not cut out for the corpo world. All around me are familiar faces...
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On April 05 2025 04:12 KwarK wrote:
Does everyone but oblade understand that the plan of increasing money in the bank is incompatible with the plan of reducing money in the bank? Am I explaining it poorly?
I think you're just dealing with alternative facts here.
I appreciated your explanations anyway, thanks!
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EPT
