There's Nothing Great About What's Next
Our wannabe emperor may have destroyed our bond market with his tariffs. There's no coming back from it if he has.
I’m going to take a bit of creative license here and paraphrase one of my favorite films of all time, The Big Lebowski. Pardon the language.
You see what happens? You see what happens, Donnie ?! See what happens?! This is what happens when you fuck the markets in the ass, Donnie!
First of all, can we all agree that the idea of a “104% tariff” is ludicrous? What is this, extra credit points? Yet, that’s what Donald Trump slapped on China at midnight tonight, and immediately everyone started pulling their money out of America. Not in 2020, not in 2008, not in 2001, not in 1987, has this happened before. The American Treasury bond was the gold standard, literally, for the world after everyone went to the floating currency market post-World War II. The global markets use it to peg their own interest rates. It is what keeps our currency strong. It has always been a safe investment when the stock market is plummeting. I’ve never had any reason to doubt that myself, and I shifted my 401k last week to a higher bond investment because I believed, as it had always been before, that it would be safe there.
Donald Trump has destroyed that.
There’s always the chance that this is a blip, but I’d rate that as exceedingly small. Countries like Japan and China hold disproportionately large sums of Treasuries (the colloquial name for the bonds), and if they are selling them and cashing out of America because we slapped them with nonsense tariffs dreamt up by an AI chatbot, the resulting inflation is going to look like Greece over a decade ago, at best. At worst, we’re about to relive the Weimar Republic right before the Nazis took over. Hyperinflation, mass unemployment, complete failure of government. There are not words to describe the cataclysm this can bring.
This, from CNBC’s Carl Quintinilla, struck me.
At best, Donald Trump is an octogenerian with a healthy dose of narcissistic personality disorder and fixed beliefs being reinforced by sycophantic Cabinet secretaries and aides. At worst, he has dementia and/or is no longer acting rationally in any way. The remedies that are supposed to stop us from getting here have failed, because the Supreme Court is in his pocket and Congress is filled with cowards and low-rate intellects who love seeing themselves on the television. Democratic leadership has been living in fantasyland. A consistent third of their Senate caucus continues to vote for Trump nominees and thereby consent to this tyrannical lunatic’s shredding of the Constitution and nuking of our economy.
And I bring this up because, quite honestly, a narcissist who does not accept bad news, who may be in a fixed irrational state, will become more unpredictable when everything goes wrong. When the dollar becomes worthless, when the economy craters because credit ceases, when the billionaires rapidly lose their holdings and his voters are starving, he may just decide to take us all down with him. That was what Hitler did in 1945. He dragged Germany into the fifth circle of hell with him and everyone was so in thrall to him until the bitter end that they largely followed. He wrecked Germany utterly, leading to its division for nearly fifty years.
Donald Trump may decide to use the last resort if this goes as badly as it looks it will. I find myself unable to rule it out that he might decide “the hell with everyone” and order the launch of nuclear weapons at China, because nobody has stopped him yet. Despite every red line he’s crossed, despite every blatant Constitutional violation he’s committed—from disappearing people into a foreign gulag to ignoring court orders to refusing to spend funds that Congress approved just to own the libs to firing people willy-nilly at the hands of a South African billionaire who looks like a Bond villain—nobody has told him no.
If he truly is insane and chooses to resort to nuclear weapons, there is no authority to stop him. He gives an order, the only allowed response is to verify it. It would take everyone in the system, all of the redundant officials, refusing the order to stop it, and that’s a whole new level of constitutional crisis we are ill-prepared for.
I am writing this not to frighten people—it is a warning because there’s no precedent for the last three months. The person driving all of this has sole control of the most destructive weapons on Earth and an unstable mental capacity. If he is willing to destroy America’s economy, truly wreck it in a way that is not recoverable, there may be nothing he will stop at. We must continue to be as loud as possible to Congress. They can unite and rein him in, or they can sit back and be complicit in the greatest disaster to ever befall our nation.
None of this is normal, and it is vital that nobody acts like it is.