Quite a few posters here have realised that one of the main goals of Donald is to gain control "over the institutions". The early sovjet-commies called it "the march thru the institutions". Same same.

 

A main goal of Donald is to take over the Federal Reserve Bank (=the FED). No other "takeover" will have more implications than this one, should it succeed. It doesn't make the headlines (yet).

 

In case of "success", especially foreighners holding US assets would be well served having set up some "hedge" beforehand (mainly US$/US tresauries), as market reactions to this event will be violent, "counter measures" trying to respond to this major financial event may all be "too late".

 

This is not to say that this will happen, but if it does, this will dwarf any executive order that Donald has issued so far in connection with domestic/international financial ramifications.

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To note: Budget projections indicate that the Import Taxes will reduce the US annual budget deficit by 2%. A sure fire way to make Ameerica great again. But that is another story to unfold as time goes by.

29 minutes ago, swissie said:

 

Quite a few posters here have realised that one of the main goals of Donald is to gain control "over the institutions". The early sovjet-commies called it "the march thru the institutions". Same same.

 

A main goal of Donald is to take over the Federal Reserve Bank (=the FED). No other "takeover" will have more implications than this one, should it succeed. It doesn't make the headlines (yet).

 

In case of "success", especially foreighners holding US assets would be well served having set up some "hedge" beforehand (mainly US$/US tresauries), as market reactions to this event will be violent, "counter measures" trying to respond to this major financial event may all be "too late".

 

This is not to say that this will happen, but if it does, this will dwarf any executive order that Donald has issued so far in connection with domestic/international financial ramifications.

--------------------------------------------------------

To note: Budget projections indicate that the Import Taxes will reduce the US annual budget deficit by 2%. A sure fire way to make Ameerica great again. But that is another story to unfold as time goes by.

 

Why do you think US treasuries would be a good hedge? Trump's picks would almost certainly adopt a highly inflationary policy. The value of those bonds would plummet.

20 minutes ago, Alan Zweibel said:

Why do you think US treasuries would be a good hedge? Trump's picks would almost certainly adopt a highly inflationary policy. The value of those bonds would plummet.

Under such circumstances, treasuries would not serve as a hedge and I never said so. The "hedge" would be to sell treasuries on the futures markets (going short). Same for US$. That's the "hedge".

 

But there is no "free lunch". Depending on "home currency" and US investement vehicule, such a "hedge" may cost between 2 to 6% per year.

It will depend on if SCOTUS wants to play or not. He will certainly be stopped at the lower court but who knows what will happen on appeal. They have to be getting tired of the chaos but they are bought and paid for.

On 8/28/2025 at 12:41 AM, swissie said:

 

Under such circumstances, treasuries would not serve as a hedge and I never said so. The "hedge" would be to sell treasuries on the futures markets (going short). Same for US$. That's the "hedge".

 

But there is no "free lunch". Depending on "home currency" and US investement vehicule, such a "hedge" may cost between 2 to 6% per year.

 

Safer and easier to buy bonds from a country that isn't headed by a rampaging ignoramus.

25 minutes ago, Alan Zweibel said:

Safer and easier to buy bonds from a country that isn't headed by a rampaging ignoramus.

I agree, but as long as the US $ is the main "exchange vehicule" for global trade and investment monetary streams, the rest of the world will have to live with it.

 

The US$ will remain "the sun" in the financial universe, making other currencies planets that circle around the sun. No other "sun" available in the forseeable future. For better or for worse. Over the longer term, the US$ will lose it's shine within the financial universe. But that will take 20 years or more.

18 minutes ago, swissie said:

I agree, but as long as the US $ is the main "exchange vehicule" for global trade and investment monetary streams, the rest of the world will have to live with it.

 

The US$ will remain "the sun" in the financial universe, making other currencies planets that circle around the sun. No other "sun" available in the forseeable future. For better or for worse. Over the longer term, the US$ will lose it's shine within the financial universe. But that will take 20 years or more.

The USD peaked as the currency of international settlements in 2001, at 70%. As a reserve currency, central banks have been diversifying away from it into other currencies, and gold. The USD now only settles 49% of transactions.

 

Trump meddling with the independence of the Fed IMO will only accelerate the decline of trust in the dollar. It's already showing up in failed bond sales.

I don't realy think many members who live in Thailand are arsed about what Trump and Fed are upto just more American themed threads.

Most likely you're right. Although Trump wants to make Steve Miran head of the Fed. Not so long ago Miran proposed forcibly confiscating short term bonds held by foreigners and replacing them with 100 year bonds. That would hasten the decline of the dollar as a reserve currency. That said, there really isn't a clear competitor in sight. China refuses to let its currency float freely and be freely exchangeable. Even if Xi promised to change that policy, why would anyone trust him to adhere to it? And the Euro isn't exactly a universal currency even in the EU. Eurobonds issued by different countries command different rates.

24 minutes ago, BarraMarra said:

I don't realy think many members who live in Thailand are arsed about what Trump and Fed are upto just more American themed threads.

So your home currency must be Zimbabien Doller. Why not, it can only go up as it is neaer zero,

1 hour ago, Lacessit said:

The USD peaked as the currency of international settlements in 2001, at 70%. As a reserve currency, central banks have been diversifying away from it into other currencies, and gold. The USD now only settles 49% of transactions.

 

Trump meddling with the independence of the Fed IMO will only accelerate the decline of trust in the dollar. It's already showing up in failed bond sales.

I intend to agree 100 %. But most of "Farangs" in Thailand have not yet understood the connection of their US $ connextrion with  their Thai baht.