Trump Just Dropped the First USD Bomb (More to Come)

Economics, Premium POM

It’s only a matter of time before the letters “S” and “D” and “R” are uttered from the lips of Donald Trump

 

Our currency is too strong.  And it’s killing us.”

This statement comes as no big surprise to the readers of Philosophy of Metrics (POM).

The next big move in the multilateral monetary transformation has begun.  With one simple phrase Donald Trump has set in motion the necessary framing for the USD to begin devaluation against the currencies of its major trading partners, with China being the core focus.

The dollar is too strong” he said before adding “Our companies can’t compete with [China] now because our currency is too strong.  And it’s killing us.”

Back in 2014 I wrote an e-publication titled Re-Engineering the Dollar in which I thoroughly explained the need to re-engineer the dollar through depreciation and devaluation as a means of re-balancing surpluses and deficits in the international monetary system.  These recent statements by President Trump provide us with the first solid confirmation that this re-engineering will in fact take place.

It should also be considered that these statements are only the first in a series of strategic and well-placed pivot points as the international monetary framework begins to shift away from the sole use of the USD as the primary reserve currency.

The existing unipolar USD system has contributed to massive global imbalances which have pushed both America and China to diametric ends of the monetary spectrum.  America has the world’s largest trade deficit.  China has the world’s largest trade surplus.  Both are the two largest economies on the planet.  Both will need to work together to re-balance the system and expand global liquidity.

It is important to understand that both need each other as well.  No sustainable corrections can be achieved without the agreement and team work of America and China.  The hard stance which Trump is taking against China is standard negotiation start points meant to strengthen your own position and framing in advance of the inevitable give and take.

The meetings taking place in Davos by the World Economic Forum has become a side attraction instead of the feature presentation which it has normally been.  This is a testament to the Trump strategy and delegitimizing the existing and outgoing Anglo-American establishment.  But this in no way means that the Special Drawing Right (SDR) and its designed functions to assist in the re-balancing are off the table.

In fact, I would suggest that it is only a matter of time before the letters “S” and “D” and “R” are uttered from the lips of Donald Trump.  It will come at a time when the mass population has been sold on the “Make America Great Again” objective and the realization of bigger wins is associated with a change to the dollars international reserve currency status.

The “new modern nationalism” which is taking over is re-framing the world order script which was expected to consolidate the international monetary and financial systems.  The slight-of-hand from globalism to populism will barely be noticed by most.  The mainstream media which has served the outgoing liberal dominated establishment will continue to distract away from the real Trump objectives and the alternative media will continue to build and push the “truth movement politics” which paved the road for the “new modern nationalism” and populist leaders like Trump.

The process we have been describing and reviewing here for over three years has been largely ignored by both the mainstream and alternative media personalities and companies.  There is a reason for that. The truth regarding the real unfolding script had to be hidden within the conspiracy scripting of the alternative media while the mainstream media talked about anything other than facts and the truth.

The SDR as a supra-sovereign reserve asset replacing the dollar in the international monetary system isn’t necessarily a bad thing.  If the transition is managed correctly and the issuance of debt is restricted by a new method of SDR quota issuance based on fundamentals such as GDP and resources than the world can be eased off the debt cycle which has built up along with the governing structures of the liberal dominated Anglo-American establishment.

The pieces are now moving fast and drastic change is on the horizon.  Trump is breaking the mold and making statements that no other American President has made. I have been on the fence for years on whether the SDR would be a good thing or a bad thing.  If Trump and his growing alliance around the world can manage to isolate the disintegrating establishment from the larger SDR process and monetary realignment than I believe the transformation will be positive.

But as in all historical situations, human nature is predominately weak and the system will self-corrupt again in the decades to come.  This is where the Philosophy takes off from the Metrics.  – JC