Have you ever wondered what human quality is? ⭐
Well, human quality is the essence of luck – the luck in finding community members of the highest caliber! 🌟
Our premium channel member, Naor Mishali, decided to take up the gauntlet and clarify for you what exactly is happening in the world right now?! ⛔
"American chess" - 🇺🇸
Chapter 1 of 3 - Trump and the economy 📊
Let's talk for a moment about Trump – not the man, but his economic plan. Long before the 2024 campaign, Trump set a very ambitious goal for himself:
To make Americans feel they are earning more, that the economy is booming, and that the national debt is "erased by itself".
How is this done? Not through magic, but through rather surprising economic tools.
Trump is building an economy based on a nominal sense of prosperity
"You will feel richer, you will receive more, you will see the stock market booming – and even if it's not deep, it looks good, and it makes the economy work."
And it's no coincidence that he's pressuring the Fed to cut interest rates. This is his way of making all of this happen faster, and bypassing the dry rules of economists.
*So what's actually going on here?*
Trump? Powell? China? So many variables and it's hard to keep track!
So here's the thing:
Inflation is good for Trump: but the kind that looks good:
Inflation is not always a bad thing. If it's moderate and managed, it can be a great player on Trump's team.
Imagine a scene for a moment:
A year ago you bought coffee for $3.
Today it costs $3.30.
You're not thrilled, but then your boss raises your salary by 5%.
What do you feel? You're "earning more," right?
So yes, maybe you didn't actually earn more (because prices went up), but you feel stronger financially. And that's exactly what Trump wanted. A feeling of wealth. A feeling of movement. A boost to national self-confidence.
How does this help erase the debt?
Trump knows that the national debt is a nominal amount. If the entire economy inflates (prices, wages, GDP), the debt "shrinks" relatively.
Imagine: The debt remains $30 trillion.
But GDP jumps within two years from $20 trillion to $25 trillion.
Suddenly the debt is "only" 120% of GDP instead of 150%.
So what did we do? We didn't pay a single cent, but we reduced the ratio.
In the public's eyes, it looks like a victory.
Why does Trump want the Fed to cut interest rates so badly?
Here's where it gets interesting:
While Trump distributes tax benefits (fiscal) and raises tariffs (more fiscal), he asks the Fed to act in the opposite direction: monetarily.
Why?
1. Interest rate cuts = more money flowing into the economy
It's easier to take out a mortgage, start a business, or invest in the stock market.
2. The dollar weakens – American exports flourish
This is how Trump "fights" China and Europe, who are weakening their currencies.
3. The stock market rises – the public feels rich
Pensions, bank portfolios, Apple stocks – everything jumps.
4. More taxes, less pain
As nominal incomes rise, so do tax revenues – without actually raising taxes.
End of Chapter 1 - Part 2 coming soon!