Trump - Back to the Future

The year was 1987, and then US President Reagan put the Canada-US Free Trade Agreement before the US Congress for ratification - almost 30 years ago now. It was an agreement that didn't involve Mexico and the ramifications for the US were minimal at best. If anything, it would be and was the Canadian economy that had to rationalize itself to the mightier economy down south. However, on Jan 1, 1994 the North American Trade Agreement (NAFTA) came into effect, or as Donald Trump would say: "the worst trade agreement in the history of the world." Truth is that NAFTA was only the worst trade agreement for the US, because it involved a more "productive" economy in Mexico. The US then found itself rationalizing its economy to Mexico's. Specifically, the auto industry fled to Mexico along with its jobs. China added to the misery with its mass importation of goods to the US, which made the corporate masters at the New York stock exchange happy, but further crucified the US internal economy.

Fast forward to today, and Trump has just been elected by the ghosts of NAFTA - the people who were "rationalized" out of a way of life they had bragged to the world about, but could no longer enjoy. While the "globalists" were continuing their march toward the TPP and other trade agreements, the American people in the "rust belt" were waiting for their moment of revenge. The globalists didn't see it coming, because the American people held it close to their chests until the time was right. The old "Don't fire til you see the whites of their eyes" cry from the US's War of 1812 with Britain. When they did fire Trump won over 300 seats in the US Electoral College which makes him now President-Elect. The big question is whether or not he can keep his agenda, or, frankly, whether he ever intended to.

Trump's big boast was an election win for him was "Brexit plus, plus, plus". The first foreign politician to visit him after his election was Nigel Farage who was the leader of the Brexit movement, and who actually stumped for Trump during the campaign. The truth is that of all the promises made by Trump, renegotiating NAFTA is his easiest politically. Americans are notorious for being inward looking - even when their survival dictates they shouldn't be. However, times have changed and so has the US. In the global sense, the US has had its economy completely rationalized to the international economy. It is no longer the industrialized country it was when Reagan became President. Its role in the world now is the consumer economy, and not the producer economy. Essentially, Trump's plan is to turn back the clock, and recreate the producer economy the US once was.

However, that time has come and gone to be honest. The reason the US entered all these trade agreements was to gain unfettered access to the rest of the world so it could grow its economy. If you recall, the US was going through recessions and inflationary pressures even before Reagan became President in 1980. Factories in the US were already closing. Unemployment was much higher than it is today. The globalists saw the necessity to increase trade to create growth and they did. Now the world's fiancé system, including stock markets and central banks, have all recreated themselves to foster that growth with massive debts and minimal if not negative interest rates. Of course that involved printing money without anything to back that value other than economic performance, so the cycle just kept repeating itself. In the process China, India, and places like Mexico took over the industrial needs of the world.

Now, in main stream, Trump's plan is to put an end to that system. His plan is to return the US to a protected economy status and rebuild its industrial base. He argues the resulting growth created within the US by returning to protected status will create massive employment and tax revenues and  that will allow him to cut everyone's taxes. A very simplistic, and fairly naïve concept.

Firstly, the US is a debtor country now, where in 1980 it wasn't. The Chinese for example hold enough US debt and currency to bring down the American economy by themselves if they chose to. Nobody was in that position in 1980. The US gross debt is expected to reach the magic $20 trillion mark this year, so it is country that has mortgaged itself to maintain its way of life - somewhat maintain it that is. Secondly, and relatively speaking, Russia and other arch enemies of the US are not in the terrible financial position they were in during the 1980's and 90's. Thirdly, and most importantly, the BRICS and Eurasia have the potential to shut off access to their markets now as well, and they are currently on that path - whether they choose to admit that or not at this time.

Furthermore, if Trump were to "renegotiate" NAFTA and other agreements he would be destroying the financial plans of almost every American multi-national corporation in the world today. All these companies have built their revenues, and more importantly debt, based on certain economic models. Those models are going to be thrown out by Trump, because the countries that are being "renegotiated" with will also be protecting their economies in kind. The bottom line is Trump's plan requires that he teleport the US back to 1980 when the US's commitments, including debts, are firmly in the 21rst century - meaning it is no longer possible without a complete breakdown the world economy, including stock markets and currencies.

Frankly, the US, or at least half of it, has collectively entered the Twilight Zone with Mr. Trump. I liked the anti-establishment message Trump put out there during the campaign, but
there are ominous signs that he may not be the true anti-establishment guy he painted himself to be.
The role of his family is becoming particularly troubling. The fact he cannot clearly see that allowing his children to sit on his transition team is not a statesman-like move is bewildering. His children will be having a direct voice on appointments and at the same time will  be running his companies. The innuendo is that such a situation allows for an exchange of favours and IOU's. That why it's called a "perceived conflict of interest". In a private company it may not be applicable, but when dealing with the public purse it most definitely is.  This alone raises some serious judgement issues.

There are other signs as well that Trump may not be as big of an anti-establishment guy as he lets on. So far the biggest hint are the people he is rumored to be thinking about for posts. They are all Wall Street-type folks, and all very much "establishment" - without question. Another curious thing was the comment that Trump made during his celebration speech that he intended to be around as president "for, two, or three or four years, maybe even eight." I found the comment strange, because the thought he may not be in for a full four year term is on his mind before he's even sworn in. Curious to say the least. One final thing. Trump needs to ditch the whole family thing. The American people voted him in - not The Apprentice. The interview he conducted in the opulent  surroundings of his home, gilded in gold as it is, and surrounds by every member of his immediate family gives the feeling of some kind of team effort. That or the feeling of some kind of American royal family. Either way it's bizarre and almost offensive. It wreaks of the same kind of arrogance that he roundly, and justly criticized the establishment of.