US President Donald Trump kicked the World Economic Commission in an announcement made on April 2 within the framework of “Liberation Day.”
As reported by Cryptonotics, the president has decided to apply a reciprocal tariff regime to imports from China, Canada, the European Union (EU) and dozens of countries where all Latin America stand out.
This protectionist policy aims to revitalize local industries, which are said to have been weakened by globalization and international competition. He revived the fear of increased inflation and the possibility of a recession all over the world.
For Howard Marks, co-chairman of Oaktree Capital Management, “This is the biggest structural turn since World War II.”
In an interview with Bloomberg, the legendary investor has been recognized for predicting the crisis of Bubble Puntocom (1999) or the recent Great Recession (2008).
He also presented a set of examples to illustrate the outcomes of policies promoted by Trump. “Webs around the world are maximized when countries are doing better and cheaper things, then sell it to countries that need it and sell it to other countries that sell it to others. That’s how trade works.
In turn, he mentioned the impact of US globalization, saying, “For 25 years, the cost of sustainable goods in the US was effectively reduced by 40%, allowing access to products at low prices across the population,” he also said:
“It maintained inflation under control. It made goods available at a low price for all Americans. Without world trade, there is no profit. Tariffs are designed to encourage national production.
Howard Marks, co-chairman of Oaktree Capital Management.
Regarding possible future outcomes, experts warned that beyond the possibility of an increase in inflation, there is the greatest risk of a commercial war. The dollar loses its status as a global reserve currency.
In this regard, he explained: “We have problems if people don’t like the dollar, if they don’t like investing in the US, if they don’t want to have an unlimited amount of treasure.
Marks did not explicitly say that, but losing the reserve currency situation means that the US will face serious difficulties in facing debt. Currently, the demand for treasure debt worldwide allows the US government to take debt at relatively low interest rates.
However, if the mark rises and that trust is eroded, many countries and investors could halt the purchase of US-issued debts.
This forces the government to provide higher interest rates to attract buyers, which could result in a unique debt, leading to a deeper tax crisis.
If the dollar is wobbling, where do you evacuate?
Marks does not provide an answer to this intertitle question. However, given this situation, investors are experiencing the collapse and weakening of money. It is leaning to evacuate to other assets such as gold and Bitcoin (BTC)..
However, it must be clear that waiting for this to happen with Bitcoin is a medium-term or long-term perspective. The currency created by Nakamoto Atoshi is still recognized by most investors as a risky asset, and as such it also suffered from the consequences of the “commercial war” that Trump released.
Bitcoin was showing strength at the $82,000 level. However, this dissociation hardly lasted as BTC dropped by 10% until Sunday and Monday mornings.
In the following graph created by Kaiko Research, we observe the behavior of Bitcoin (yellow line) compared to SPDR Gold Shares, an ETF that tracks the price of gold (GLD). SPX (US S&P 500 index), NKX (Japan Nikkei 225 index), NDX (US index of USDAQ 100 index), HSI (Hang Seng Index of Hongkong) and CAC 40 (French Stock Market Index).
At the time of publication of this memo, the BTC price was 79,800, 25% below the $109,110 record high (ATH).
Kaiko’s report also reveals that Trump’s enthusiasm for victory in the US election has been revealed since mid-February Cooled due to uncertainty regarding customs.
As reported by Cryptonotics, the Republican leader’s victory in the election contest sparked investor enthusiasm for digital assets. Throughout his presidential election, Trump has expressed his support for cryptocurrency and has pledged to friendly regulations with the sector to promote their development.
It fulfills some of its promises, including creating a strategic BTC reserve and signing an executive order to establish a Cryptocurrency Advisory Committee, but it showed that the initial impulse was slowed by the tariff war.
One sample was that at the beginning of April, operations with cryptocurrency returned to levels before the election.
BTC’s operating volume has decreased by more than 45% compared to the November average, pointing to a decline in market activity.
BlackRock, the world’s largest asset manager He described BTC as “unique diverse actives.” This is because it has its own unique characteristics that allow it to turn into coverage when economic uncertainty and political tensions are rising.
Some of these features are that BTC is limited at 21 million units, and its broadcasts were cut every four years at an event known as half. This is a factor that affects medium and long-term prices.
Accurately, That inherent shortage is what attracts attention from large companies. And the nation. In fact, more and more countries are analyzing the possibility of creating strategic BTC reserves.
It should also be noted that unlike fíat money, digital currency is not continually neglected by central bank emissions or monetary policies.
For this reason, many investors see this storm in the market simply as a passing problem. For them, Bitcoin is not a rapid profit, it is a financial revolution.
And although it’s raining today, there are things that never change. Always, sooner or later, the sun will rise again.
(TagStoTRASSLATE) Donald Trump (T) US (T) Prices and related transactions
