The Trump Circus is in full swing at the White House, this improbable bazaar which is transformed, depending on the time of the day, in an automotive concession for electric cars with sales in free fall (Tesla) or in operational world war HQ. Punitive prices replace cruise missiles: the shooting is all out of mexic to Europe via Canada, China and soon India and Japan. +10 %, +25 %, +50 %for products that would dare to enter the American market. Record – temporary – obtained by French wines and champagnes, threatened with 200 % taxes.
The deep reason for this excessive war – with or without s? A reasoning error that a Terminale ES or STMG student would not do. In the binary spirit of President Trump, the economy is a zero-sum game (we lose or win), and an American trade deficit means that America partners are “on the back” of the United States, and which must therefore be corrected … and punish. The reality is quite different: thanks to the dollar, a global reserve currency, which allows them to go into debt endlessly, the United States can consume more than it produces. And import more than they export. Ignoring in history, especially economic, Donald Trump does not know that it was precisely transatlantic trade wars in the 1930s, initiated by the Americans, who switched the world in the Second World War (Hawley-Smoot law applying prices of 52 % on 20,000 products).
The clues are eloquent
The Trump presidency had started with real promises of enrichment for America: in less than two months, the American economy plunges towards the recession, aggravated by increased inflation, because of this trade war – and blind dismissals in the American public service, which create tens of thousands of unexpected unemployed. She even has a name: Trumpflation.
How to stop this fatal circus for America and for ourselves? Precisely by summoning the economy, or rather finance because it goes faster, to whistle the end of the game. And find the best in America, that of the Reaganomics: self-confidence and in the future, free trade, shared prosperity. Peace. However, so much economic and diplomatic realities are slow to implement and difficult to pilot, as much stock market orders are instantaneous, with immediate effect, often radical when they are massive and simultaneous. Faced with the Donald circus, let us oppose the omnipotence of the financial markets. Global investors, in particular American, did not wait for this column to relieve their exhibitions to the American economy: first, because American actions are notoriously overvalued. The per (“Price earning ratio”) of Case-Schiller, which measures the multiple means of the results of American actions over the last ten years, has never been as high as from the Internet bubble (37 x); Since the election of Donald Trump, the Russell 2000, the stock market index of the “deep” American economy, that which is not on the west coast or in New York but with the US and US family SMEs, has collapsed by 18 %. The foundations of the American economy, employing a large base of the popular electorate of Trump, are in the process of bending.
What to do?
In France, a negative variation in stock market indices only interests people fortunate enough to have actions, or specialists. In the United States, it is a national drama: 70 % of the 260 million adult Americans have a â401-kâ plan, equivalent to our life insurance contracts, but in actions. These plans represent most of their future retirement.
So what to do, on our side, to help Americans end this spiral of failure? You must first protect yourself. Encourage Western countries to cancel their f35 hunter orders (those who are supposed to carry the nuclear bomb) as long as Donald Trump continues to align with Russia of Mr. Putin. Canada has just announced to study this close option. Poland, Switzerland, Italy, Greece, Sweden, Germany have about 400 to cancel (more than $ 30 billion). Likewise, the tesla sales dive in the world, directly linked to the image of Elon Musk, main support by Donald Trump, will bring about political management changes, especially if he is accentuated.
America is only rich and powerful with its Western allies, not against them
European companies, and first French, usually resorting to law firms, business banks, accounting firms, American strategy advice will be able to move towards European alternatives, often better and safer for the protection of their data (the American Patriot Act sending all their confidential data to Washington). These falls of income will not fail to ring the alarm in New York, the city of Donald Trump, and Washington.
The economy is a serious game
All this will be useful, but will take time. Conversely, since the first ten European makeshift managers (the number one being a Frenchman) manage more than $ 10,000 billion in assets, including a very large volume of American shares (European savers invest 300 billion euros each year outside of Europe, essentially in American stocks and obligations), a mass sale of American shares would have a spectacular effect on the American scholarship. And therefore on the morale of 180 million Americans holding “401-K” plans. Faced with this Krach, which will be temporary – the fundamentals of the American market remain very attractive, and for a long time – we can easily anticipate the reaction of a Donald Trump, who laughs at everything except money, and his reputation as “Money-Maker”rather than “Loser”.
First, it will groan. Will threaten Europe for everything and its opposite. But his word, less and less credible (to hear it, he is ready to wage war in Canada, Mexico, Panama and Greenland at the same time), will make room for the acceptance of reality: America is only rich and powerful with its Western allies, not against them. The global economy is not a zero -sum game, with winners or losers. It is a very serious game, where everyone wins at the same time – importers and exporters, rich and poor, North and South, thanks to shared growth and confidence. Or else, everyone loses at the same time because everyone sees the other an adversary to shoot down, and the world goes to war for paying any account. America deserves better. We too. It is time to sell America and invest in Europe, while waiting for reason to return to the White House.
