Quote:
Originally Posted by dyna mo
wait, so trump is responsible for the US economy kicking ass. make up your mind.
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yes and no. trump is not responsible for the economic upswing since 2009 - he can't at all. that was obama.
but obama did it differently (though not without negative consequences). he printed money and indirectly gave it to the companies by buying shares (imagine where that would have led in the long run if the american state had been the owner of the shares in the company at the end).
even if this move wouldn't have worked in the long run, it was clever, because shares are indirect credits that companies needed because the bank didn't have any more money. and shares don't have to be paid back at some point.
but what trump is solely responsible for is the bubble he generated to fuel the booming DOMESTIC economy even further. and the domestic economy is the ONLY thing that is booming. the trade balance since trump is the worst since 2009. by abolishing the dodd frank act, he has enabled banks and financial institutions to give lazy loans again to people who are already overindebted anyway.
this borrowed money has made sure that the domestic market demand has increased enormously. the people who can't afford houses now have some - on credit. the people who could only afford a cheaper car now have a more expensive - on credit.
and in addition, this rising demand triggered fears of interest that even families who can calculate and who had actually planned a house purchase in the distant future, have preferred this house purchase to take the cheap interest rates with them.
the boom you see here is a borrowed boom because it is based on overindebtedness. never before in american history have americans been so heavily indebted - not even in 2008. but there it was the trigger for the financial crisis.
in addition, trump believes you gain your own strength if you weaken others. this may apply to real estate companies but not to world trade. he forgets that he also weakens the purchasing power of his "competition" and that he thus causes interest rate hikes in his own country which in turn strengthen his own currency. customers with weak purchasing power do not buy where it is expensive but where it is cheapest.
the other states of the world have done what obama did as well. but they have ended it a long time ago and thus reduced their debt. america is still indebted at a level that makes the mountain of debt grow faster and faster.
the initial situation for a trade war is therefore very bad, because the "opponents" simply have more room for maneuver, while the USA has already exhausted all possibilities.
a good formula 1 pilot does not only use the speed of his car but also calculates the weight of the fuel. he also knows that he uses more fuel when driving fast and that this will make his car stopping before the aim of the race.