

Special Edition: Global Cakeism
Jul 17, 2025
Tariff strategies from the Trump era take center stage, revealing unexpected consequences for the U.S. economy. The decline of the dollar raises eyebrows as corporations seek refuge in European markets. A deeper look at tariff dependency highlights potential dangers for fiscal stability. The idea of 'cakeism' emerges in Brexit discussions, linking to U.S.-Japan relations, illustrating the complexities of international negotiations. As Japan cultivates self-sufficiency, alliances shift, pointing to an evolving geopolitical landscape.
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Trump's Tariffs Weaken Dollar
- The Trump administration's tariff policy is causing a significant decline in the US dollar, unprecedented since 1973.
- This falling dollar undermines the apparent strength of the US stock market rally when adjusted for currency effects.
Reverse Yankee Trade Weakens Dollar
- High U.S. treasury yields no longer boost the dollar as they used to, breaking historic correlations.
- Corporations are borrowing euros instead of dollars, initiating the 'reverse Yankee trade' and weakening dollar dominance.
U.S. Government Forms Tariff Habit
- U.S. tariff revenues now roughly offset borrowing costs from the One Big Beautiful Bill Act, creating a reliance on tariffs for government revenue.
- This 'tariff habit' risks incentivizing tariff increases for revenue rather than economic restructuring, leading to dangerous fiscal consequences.