Dear reader,
Hello and happy Friday to you. I’m late getting this missive out as I’ve been playing catch-up. We’ll get back to a regular schedule with these next week.
The reason I’m late is that we took a family vacation to Delray Beach, Florida last week. My daughter Madison is now ten years old… and this is the first real vacation that we’ve taken since she’s been here.
I figure one vacation every ten years is a pretty good rhythm. Especially when you make new friends like these:
We met this guy out on one of our morning walks. He seemed content to observe us humans in our native habitat at first. But then my son tried to pet him… and that’s where the line was drawn. This thing belly-flopped into the bushes and disappeared into the Florida morning – moving much faster than one would expect.
Speaking of moving fast, it’s become clear that we’re on the precipice of a global economic and monetary shift unlike anything since the Bretton Woods Agreement of 1944.
When we left off last week, we talked about the current administration’s plan to balance the budget and monetize America’s balance sheet. Given the degree of overt fraud that Elon Musk and DOGE are discovering, balancing the budget strikes me as much easier than I would have previously believed.
Much more difficult is the bigger picture…
I listened to several podcast interviews with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick recently. It’s refreshing how transparent these guys are. They are telling us exactly what they are trying to accomplish – and the steps they are going to take to do so.
According to Bessent, there are fundamentally three planks to their plan. They are:
- De-lever the US government by cutting out waste, fraud, abuse, and bloat
- Re-invigorate the private sector by de-regulating the financial system
- Reflate the American middle class by reshoring manufacturing, cutting taxes, and driving down energy prices
That last plank is the big one. And Bessent is very clear about what it entails: a global economic reordering.
The markets are melting down this week on news that the Trump administration is imposing reciprocal tariffs on other countries. China responded by raising its tariff on US imports.
Suddenly the potential for a global trade war is all the financial media wants to talk about… but I think that’s just noise.
These guys aren’t stupid. And they certainly aren’t acting on a whim. They have a plan, and it’s to reorder the entire dynamic of global trade. How’s that for modest?
And to be fair, it appears they are operating in good faith. They mean it when they say that they want to make America great again. Here’s what Bessent said in a recent interview:
“The American Dream is not ‘let them eat flat screens.’ If American families aren’t able to afford a home, don’t believe that their children will do better than they are – the American Dream is not contingent on cheap baubles from China. It’s more than that… The bottom 50 percent of working Americans have gotten killed. We are trying to address that.”
I have to admit – he’s got a point here that’s worth considering.
More on the global economic reordering vision and Triffin’s dilemma next week…
-Joe Withrow