The Donald’s Trade Wars And Border Wars — Definitely Not MAGA, Part 1

In yesterday’s post we mentioned the Donald’s quadruple whammy of wrong-headed ideas, and it’s hard to deny that two of them — an unreformed Fed and the exploding Trumpite/GOP fiscal deficits at the tail end of the current long-in-the-tooth business expansion — are heading for a thundering collision. Taken together they already mean $1.8 trillion of homeless Federal debt will be monkey-hammering the bond pits in the fiscal year ahead.

But before you can say “yield shock” and that Jamie Dimon’s recent prediction that the 10-year Treasury note will hit 4.00% isn’t exactly the stuff which MAGA is made of—also consider the potential implications of the third leg on the Donald’s rickety stool.

To wit, Trump’s incipient trade war is actually going to make the yield shock and Wall Street’s day of reckoning immensely worse.

That’s because the Donald foolishly believes that the nation’s massive and persistent trade deficits were caused by bad trade deals (like NAFTA and the various WTO trade rounds), which were made by stupid Presidents, and can therefore be reversed by an art-of-the-deal savvy President, who is smart enough to realize that he has all the cards and that calling foreigners bluff with big tariff threats is an absolute “no brainer”. 



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