Markets have already opened in the East and it isn’t looking good.
In a week marked by unprecedented market turmoil, the global economy appears to be teetering on the edge of a financial abyss. Japan’s Nikkei 225 futures trading was halted amid sharp declines, while its TOPIX banking index extended losses, plunging 14.7%—its worst performance in decades. Across the Pacific, U.S. equity markets suffered their steepest two-day drop since the pandemic-driven collapse of 2020, with major indexes entering bear market territory. The culprit? President Donald Trump’s aggressive tariff policies, which have rattled markets and stoked fears of a global recession.
Japan: The First Domino Falls
Japan’s stock market has been hit particularly hard. The Nikkei 225 dropped below the 33,000-point mark for the first time in months, triggering circuit breakers and halting futures trading. Meanwhile, the TOPIX banking index suffered a massive weekly decline of over 20%, marking its worst performance in more than 40 years. This collapse reflects broader concerns about global financial instability as tariffs imposed by the United States ripple through international markets.
Japanese banks, often seen as bellwethers of economic health, have been decimated by fears that higher tariffs will erode trade volumes and squeeze loan margins413. The yen’s strengthening against the dollar—fueled by safe-haven buying—has compounded these woes, creating adverse conditions for exporters and further dampening investor sentiment.
America’s Market Meltdown
In the United States, Trump’s sweeping tariffs have sparked chaos. The Dow Jones Industrial Average plunged over 2,200 points on Friday alone, while the S&P 500 shed $5 trillion in market capitalization over two days. Analysts now peg the odds of a U.S. recession at an alarming 67%, up from just 45% earlier this week. This surge in recession risk underscores mounting fears about inflation, supply chain disruptions, and retaliatory measures from trading partners like China.
Trump’s tariff strategy has drawn widespread criticism—not just for its economic impact but for its underlying mechanics. Tariffs are not a tax on foreign entities; they are paid by U.S. importers, who often pass these costs onto consumers and businesses. Small and medium-sized enterprises are particularly vulnerable, facing higher input costs that threaten their survival in an already fragile economy.
Manipulation or Miscalculation?
Adding fuel to the fire are allegations that Trump and Elon Musk may be intentionally destabilizing equity markets to redirect capital flows into long-term treasuries. Critics argue that their actions—whether deliberate or coincidental—are spooking investors away from equities and into safer assets like government bonds. This theory gained traction after Trump shared a video on social media suggesting he is “crashing the stock market on purpose” to pressure the Federal Reserve into emergency rate cuts.
While such claims remain speculative, they highlight growing distrust in leadership during this crisis. Some believe Trump is timing market bottoms to benefit wealthy allies who can buy undervalued stocks before announcing policy reversals that send equities soaring again—a move that would leave retail investors and workers bearing trillions in losses.
Policy Choices: A Double-Edged Sword
The current turmoil underscores a stark reality: this leveraged economy is highly dependent on an ever-expanding money supply. Without immediate intervention—either through tariff reversals or aggressive monetary easing—the risk of deflationary collapse followed by hyperinflation looms large. Federal Reserve Chair Jerome Powell has warned that tariffs could exacerbate inflation while slowing growth, leaving policymakers with few good options.
Economic experts argue that delaying action will only deepen liquidations across banks and brokerages—a scenario reminiscent of the Great Depression. The longer tariffs remain in place without countermeasures like rate cuts or quantitative easing (QE), the harder it will be to stem the tide of financial instability.
The Human Cost
Beyond stock charts and GDP forecasts lies a human toll that cannot be ignored. Ordinary Americans—already grappling with rising prices—are now facing job losses as businesses cut costs to survive tariff-induced pressures. Meanwhile, global supply chains are fraying under uncertainty, threatening access to essential goods and services worldwide.
A Call for Leadership
This moment demands decisive leadership. Whether Trump’s tariffs are a calculated gambit or an ill-advised experiment, their consequences are clear: global markets are unraveling at an alarming pace. Policymakers must act swiftly to restore stability—be it through tariff reversals or coordinated monetary interventions—or risk plunging both America and its trading partners into prolonged economic hardship.
The stakes could not be higher. As history has shown, financial crises often begin with policy missteps but end with widespread human suffering. Let us hope this time will be different.
Never Let a Crisis Go to waste:
The Elite Playbook: Profiting from Crisis
The mechanics of this potential manipulation hinge on a perverse incentive structure. By exacerbating market panic—through tariffs or inflammatory rhetoric—powerful actors could theoretically depress valuations of tech giants like Nvidia, Microsoft, Google, and Amazon to fire-sale prices. With retail investors fleeing equities and capital flooding into long-term Treasuries, elites with insider access to liquidity could acquire these assets at historic discounts. Once positions are secured, a coordinated reversal of tariffs or announcement of Fed rate cuts could trigger a rapid rebound, disproportionately enriching those who capitalized on the chaos. This cycle mirrors historical patterns where wealth concentrates during crises, but the scale here—amplified by algorithmic trading and social media—raises unprecedented risks. While direct evidence remains elusive, the 67% recession probability and $5 trillion in recent market losses underscore how easily policy decisions can distort markets for private gain.
Gold and Silver Amid Turmoil and Market Crashes
The Eternal Lifeline: Gold’s Reign Across Empires
History’s geopolitical upheavals—from Athens’ subjugation by Rome to the mercantile rivalries of Europe’s imperial powers—reveal a timeless truth: gold and silver transcend empires. When Corinth fell in 146 BCE, Rome absorbed Greece’s wealth but preserved its economic framework, minting coins from plundered gold to fuel its expansion.
Centuries later, Spain’s dominance waned after the War of Spanish Succession (1701–1714), but its New World silver sustained global trade even as Britain seized Gibraltar and Menorca to control Mediterranean bullion routes. The Dutch guilder and British pound rose on the backs of colonial gold reserves, while hyperinflated paper currencies—like France’s assignats or Weimar Germany’s marks—crumbled without metallic backing.
J.P. Morgan’s axiom—“Gold is money. Everything else is credit”—proved prophetic during these collapses. As Rome debased its denarius and the Spanish Habsburgs inflated their way to decline, those holding physical precious metals preserved wealth. Today, as tariffs spark modern-day liquidations and central banks race to devalue fiat, gold’s 400-year stability offers the same refuge. Whether in Hellenistic marketplaces or Wall Street trading floors, the elites who survive crises are those who heed this lesson: empires perish, but gold endures
Let’s ask Little
Jon Forrest Little’s analysis cuts to the heart of a perilous duality. On one front, Trump and Musk’s actions—whether calculated or chaotic—risk accelerating a self-fulfilling market collapse. By stoking tariff-driven instability and amplifying recession fears, they could depress equities until valuations of tech giants like Tesla and Nvidia reach fire-sale levels, enabling elites to buy low before policy reversals spark a rebound. This mirrors historical patterns where political insiders exploit crises: studies show senators routinely outperform markets by 4.9% using non-public information, while banks retained Musk’s collateralized Tesla shares despite mounting risks.
Simultaneously, the engineered chaos could pave the way for a centralized financial “solution.” As markets unravel, pressure mounts for a Federal Reserve digital currency (CBDC) framed as a stabilizing lifeline. Research indicates CBDCs might reduce bank runs by shifting deposits to central banks, but critics warn they could also enable unprecedented surveillance and control. Little notes the grim irony: a crisis manufactured through tariff brinkmanship and equity volatility might force public acceptance of CBDCs as the alternative to “starvation and civil strife”—a modern iteration of disaster capitalism where elites profit from both collapse and recovery.
The moral bankruptcy lies in the asymmetry: workers and retail investors bear trillion-dollar losses, while architects of turmoil position themselves to harvest assets and reshape finance. As with Rome’s denarius debasement or Spain’s New World silver plunder, gold and truth remain the ultimate safeguards—but in today’s digital age, the battleground shifts to who controls the currency and Trump and Musk have done nothing to Crush the head of the Serpent ( i.e. the money changers and Federal Reserve)
In Case You Missed it
I wrote a detailed account on the failure of the current and past regimes to get to the root of the problem in this article below
Central & Fractional Reserve Banking. War Profiteering & Currency Debasement.
Sunday feature by Carmine Lombardi
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