Following recent tariff-related market turmoil, a new German coalition government, beginning May 6th, aims to pursue a new transatlantic free trade agreement with the U.S., while also negotiating deals with other nations. This initiative includes exploring American gas imports and a united European approach to counterbalance U.S. policies. The plan also prioritizes European capital market unification and increased defense spending, acknowledging past reliance on the U.S. for security.
Read More
President Trump’s policies have undermined the U.S. dollar’s reliability as the global reserve currency, leading to significant consequences. Traders are selling off Treasury bonds, indicating a loss of confidence in the U.S. economy, and yields on 10- and 30-year bonds have reached alarming levels. This decline in confidence is further evidenced by international investors reducing their holdings of U.S. dollar assets and exploring alternative investment options. The potential collapse of the dollar’s dominance would trigger a global financial crisis of unprecedented scale, impacting the U.S. economy severely.
Read More
During a flight to the Super Bowl, Donald Trump claimed that DOGE analysts discovered irregularities in U.S. Treasuries, suggesting the country might not be obligated to repay some debts. This statement directly contradicts the 14th Amendment, which explicitly prohibits questioning the validity of the public debt. While markets haven’t reacted significantly, the assertion is alarming given its potential to destabilize the financial system and its reliance on purported analyses from individuals with questionable expertise. The gravity of the situation remains uncertain pending further developments.
Read More
China Evergrande, the world’s most indebted developer, has been ordered to liquidate by a Hong Kong court. With over $300 billion in total liabilities, this move is likely to have significant ripple effects on China’s financial markets and could potentially become a global emergency. As someone who frequently travels between Shenzhen and Hong Kong, I have observed the stark contrast in the way the news is presented. Mainland China reassures its citizens that there is nothing to worry about, while Hong Kong warns of an impending disaster. This stark difference in narratives is troubling, and it raises questions about the transparency and reliability of information.… Continue reading
John Q. Hosedrinker