Weekly Wisdom | Trump's Two Futures
The Golden Age or The Great Disaster
Since the start of President Trump’s reelection, I’ve told several people the following: We will either experience a new economic Golden Age, rivaling growth in the post-WWII United States, or an economic Great Disaster, rivaling the devastation of the 2008 Great Financial Crisis. The probability of an average presidency seems unlikely due to the enormity of the mess President Trump inherited. The factors at play both globally and domestically are of such great magnitude that it makes one of the two scenarios plausible.
The issues that matter:
For an economic boom to commence, AI must rapidly advance (yes, even from where we are today) and undergo widespread commercial and retail adoption. Since AI is the foundation of the Fourth Industrial Revolution, our economy won’t “take off” unless AI reaches its potential.
If the United States economy continues its mediocre growth of under 3% (which will be the case unless AI succeeds), then a debt crisis AND currency crisis are inevitable. Although it is difficult to predict when both crises will hit, the prospect of them occurring by the end of President Trump’s term is too high. Our current deficit and national debt are unacceptably large, and the U.S. Treasury market yields are elevated at the moment. This is the Great Disaster scenario I’m afraid of.
The formation of the BRIC group (Brazil, Russia, India, and China) in 2006 and its expansion to eleven countries as of this date presents a significant challenge to the United States’s geopolitical and economic hegemony. BRICS, as it’s currently known, represents about 1/3 of global GDP in nominal terms and 1/4 in world trade. Furthermore, BRICS contains our chief geopolitical rival, China, and another adversarial nuclear power, Russia. As a bloc, BRICS could oppose the Trump administration’s tariff policies and could coordinate to “move away” from the U.S. dollar as a reserve currency.
The Israel-Gaza and Russia-Ukraine wars, the unpredictability of North Korea and Iran, the possibility of China invading Taiwan, and/or natural disasters are all tinder that could light the world on fire (and by extension, America). Black swans (unlikely and unpredictable events like COVID-19) and a disastrous escalation in existing wars could lead to worldwide turmoil.
President Trump and his cabinet are thankfully doing a great job in decreasing the likelihood of the Great Disaster scenario. As previous writings of mine have discussed, the Trump administration is 100% behind both the AI and tech revolutions taking place in the United States. On foreign policy, President Trump is commendably managing the rise of the BRICS while also aggressively advocating for and signing peace deals worldwide (more in a later Weekly Wisdom). All in all, due to President Trump, we stand a good chance of experiencing the Golden Age.
Go Further
https://www.cfr.org/backgrounder/what-brics-group-and-why-it-expanding
https://www.youtube.com/watch?v=3e6UKCJt-g8
https://www.youtube.com/watch?v=M0YlHWVxcaM
