Trump & Musk: Intentionally Crashing Equity Markets to Drive Money into Long Term Treasuries
Their Gambling With Your Money. There is No Magic Switch to Turn on "MADE IN AMERICA." Americans Don't Have the Training or Work Ethic.
Foreword:
The thesis of this newsletter is rooted in the historical observation that the political class, or ruling elite, has consistently acted in its own self-interest at the expense of workers and the broader public. Throughout history, mechanisms such as money printing, inflation as a hidden tax, and perpetual wars have been used as tools to extract wealth from the populace. While many believe we live in a democracy—rule by the people—or even a plutocracy or aristocracy, this newsletter posits that we are now in a stage of full-blown kleptocracy. In this system, corporate interests align seamlessly with government power, resulting in a ruling elite—both Republican and Democrat—operating like an organized crime syndicate to enrich themselves at public expense.
This perspective also highlights why politicians consistently resist constrained monetary systems, such as those backed by gold and silver. Precious metals represent a hedge against inflation and a safeguard against the erosion of wealth caused by unchecked monetary policies. However, they also limit the ruling class's ability to manipulate the economy for personal gain, making them inherently incompatible with kleptocratic governance. This newsletter aims to explore these themes while encouraging critical thought and informed discussion.
Trump & Musk: Intentionally Crashing Equity Markets to Drive Money into Long Term Treasuries
The Trump administration’s sweeping April 2025 tariffs have ignited global economic tremors, but beneath the chaos lies a high-stakes gamble: crashing equity markets to drive capital into long-term Treasuries, artificially suppressing yields to manage America’s debt crisis while betting on a manufacturing revival. This “shock therapy” strategy carries monumental risks and rewards, with an 18-month countdown to the 2026 midterms determining its legacy.
The Debt Wall and Yield Suppression
The U.S. faces a historic $9.2 trillion in federal debt maturing in 2025. By deliberately spooking markets with tariffs, the administration has triggered a risk-off stampede from equities to bonds. The 10-year Treasury yield plunged to 4.00% post-announcement—a six-month low—as global investors sought safety. This drop directly reduces refinancing costs:
Over a decade, a sustained 0.5% yield decline could save $500 billion, easing pressure on discretionary spending. The tariffs’ timing—amid slowing growth and manufacturing stagnation—amplifies this calculus.
Inflation vs. Fiscal Breathing Room
Federal Reserve Chair Jerome Powell warns the tariffs will cause “at least a temporary uptick in inflation” while stifling growth. Yet the administration appears willing to tolerate short-term consumer pain for long-term fiscal flexibility:
Follow the money: The U.S. imported $3.3 trillion of goods in 2024. That's more than $25,000 per household.
If the new tariffs work out to an average of 29%, per Evercore, then U.S. importers would have to pay about $1 trillion in tariffs per year, or $7,300 per household.
Realistically, that would never happen. Many goods will just not get imported any more, creating shortages and large price hikes.
But if U.S. imports plunge, that would remove a key driver of the global economy, especially for export-dependent countries like Germany and China.
Trump & Musk are Gambling with Your Money Not Theirs
The gamble hinges on whether tariff-driven reshoring (e.g., semiconductors, autos) offsets inflation before voters revolt. Trump’s team is betting that deficit savings and “Made in America” optics outweigh grocery bill hikes in battleground states like Wisconsin and Pennsylvania.
The 18-Month Political Clock
With Republicans holding slim Congressional margins, the midterms hinge on three factors:
Jobs Over Prices: Even a modest manufacturing rebound in the Rust Belt could offset inflation angst. The Tax Foundation estimates tariffs might cost 309,000 jobs short-term but could pivot toward “reshoring” gains by 2026.
Fed Coordination: Powell’s refusal to preemptively cut rates—despite Wall Street’s demands—signals a cautious stance. The Fed now walks a tightrope: combat tariff inflation without triggering recession.
Retaliation Management: The EU and China have vowed counter-tariffs, but Trump’s team appears confident that U.S. energy exports and dollar resilience will blunt retaliation.
Historical parallels are instructive: Reagan’s 1984 “Morning in America” succeeded by pairing tax cuts with a strong dollar, while FDR’s fireside chats softened New Deal disruptions. Trump lacks a cohesive narrative beyond “liberation” rhetoric, leaving voters to judge outcomes purely through gas prices, paychecks, and factory reopenings
Two Paths Forward
Success Case:
Yields stabilize below 4%, saving $50B+/year
Reshoring accelerates in EVs, chips, and steel by late 2025
GOP retains Congress by showcasing Ohio battery plants or Texas semiconductor fabs
Failure Case:
Inflation exceeds 4%, forcing Fed hikes that erase yield gains
Retaliatory EU/China tariffs crater agricultural exports
Voters punish GOP in 2026 for +17% apparel costs and stagnant wages
Conclusion: A Defining Gamble
The tariff shock is more than trade policy—it’s a fiscal and political detonator. By manufacturing crisis to bend bond markets, Trump aims to shrink the debt burden while reviving industrial hubs. But with 54% tariffs on China and 10% global levies, the plan risks a 1970s-style wage-price spiral.
The next 18 months will test whether economic disruption can be choreographed. If yields stay low and factories hum, Trumpism secures a policy blueprint. If inflation outpaces jobs, the 2026 midterms could bury both the tariffs and their architect. In this high-wire act, there’s no net—only a countdown.