The Rest Is Money 157. Trump Turmoil: Never Underestimate China
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Apr 11, 2025 The podcast dives into the potential fallout of Trump's trade war with China, questioning if America may actually be the bigger loser. It explores the volatile bond market amidst these tensions and discusses the troubling implications of insider trading allegations linked to Trump's policies. Rumored tariff pauses create market whirlwinds, raising ethical concerns around the financial activities of a former president. Lastly, it examines China's retaliatory tariffs on US goods and how these escalating tensions threaten global economic stability.
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Bond Market Power
- Donald Trump's actions have revealed that even the most powerful figures can be controlled by the bond market.
- The bond market's negative reaction to Trump's policies has increased the cost of borrowing for the US government.
US Debt Refinancing Challenge
- The US government faces a significant challenge in refinancing its debt due to rising interest rates.
- This situation is analogous to a homeowner facing higher mortgage payments after a fixed-rate deal expires.
Leverage of US Creditors
- Japan and China hold significant amounts of US debt, giving them leverage in trade negotiations.
- A US default would have catastrophic consequences for global financial markets.