
Rocky|Apr 08, 2025 16:40
Reading Stephen Milan's "User's Guide to Restructuring the Global Trade System" again, I have a basic understanding of the direction and strategy of Trump's policies. This is not just a superficial trade war, but a reshaping of the global trade system. This is the most significant global change since the collapse of the Bretton Woods system in 1971 and the Plaza Accord in 1985!
Today, I am still puzzled about the $1 trillion increase in US military spending. It turns out that this is one of the moves, ultimately aimed at reaching the 'Mar-a-Lago Agreement'. As an important strategy for reshaping the global trading system, this Milan report provides a detailed breakdown of tactical gameplay.
Three step plan:
one ️⃣ Tariffs: This is the most important tool in the Milan report, which can be used to increase fiscal revenue, protect domestic industries, and serve as a bargaining chip in negotiations with other countries.
two ️⃣ Exchange rate policy: Seeking to devalue the US dollar in order to enhance the export competitiveness of American products. This can be achieved in various ways, including reaching agreements with other countries (the Mar-a-Lago Agreement), or taking unilateral action (using IEEPA to combat the accumulation of US dollar reserves and directly intervening in the exchange rate market).
three ️⃣ Security tools: countries enjoying the security protection of the United States require to purchase and hold long-term U.S. treasury bond (such as 100 year treasury bond) to support the U.S. dollar and help the United States reduce its financing costs. The Trump government, by linking "security" with trade and finance, forces other countries to make concessions, ensures the effective implementation of exchange rate policy tools, and reconstructs the global trade and financial system favorable to the United States.
Goal: To devalue the US dollar and enhance the competitiveness of the US manufacturing industry (in order to prevent further financial turmoil, Spot Quantum Futures, launched by CME on June 30th, controls the financial market through algorithms, which is a natural progression).
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