To The Moon

The article by Ray Dalio on LinkedIn titled "What's Coming: The Changing Domestic and World Orders Under the Trump Administration" discusses the anticipated changes in policy and approach under a second Trump administration. Here are the key points:

Domestic Policy Reforms:

Trump's approach is likened to a corporate raider executing a hostile takeover, aiming for efficiency and productivity in government operations. This includes significant changes in personnel, reduction of costs, and integration of new technologies.

The focus will be on industrial policies to enhance productivity, potentially at the expense of environmental concerns, poverty alleviation, and social equity issues like diversity, equity, and inclusion (DEI).

Economic and Financial Policies:

There will be a push towards business-friendly policies with less regulatory oversight, benefiting Wall Street, tech companies aligned with Trump's vision, and financial sectors by easing capital controls and encouraging the Federal Reserve to maintain easier monetary policies.

Increased use of tariffs to protect domestic industries and raise revenue.

Political Dynamics:

The administration will categorize people and organizations as allies or enemies, with a focus on eliminating opposition to achieve its reforms. This could lead to intense internal political conflicts.

Foreign Policy - America First:

The policy will continue to be "America first", with a particular focus on preparing for potential external conflicts, especially with China, which is seen as the greatest threat.

This might involve less engagement with traditional allies and a more transactional relationship with global partners.

Overall Impact:

The changes are expected to significantly alter both the domestic and international orders, with a lean towards nationalism and protectionism, reminiscent of economic policies from the 1930s.

The administration's approach might benefit certain sectors like finance and tech while potentially neglecting key areas like education and debt management.

Ray Dalio emphasizes that these predictions aim to be factual without judgments on whether these changes would be good or bad, focusing instead on the likely outcomes based on Trump's history and the political dynamics observed.

(They above section is summarized by Grok. Please refer to Ray Dalio’s LinkedIn post for the full article)

My muse

The above points to an American-first and business-friendly outlook for the country. This looks to set you on the path to greater efficiency, wastage reduction and greater productivity. There is a chance of reducing inflation but I am cautious about the amount of federal that it may incur.

Protectionism with sanctions can be a tricky way forward for businesses. It may leave some of the players obsolete if they are not exposed adequately to global demand and competition. Sentience are not too exclusive to America and other countries can retaliate. Sanctions can lead to inflationary outcomes in these cases. I am looking forward to a peaceful era.

There is hope for a better future. Against the backdrop of record Bitcoin prices and a booming economy, I like to remain cautious due to the excessive amount of debts taken on by the federal government, corporations and consumers. The number of delinquencies and business bankruptcies are surging to a recent high. While I am hopeful, I prefer to be cautious and watchful during this season. The market seems overvalued and some retracement is possible. Recession is also part of an economic cycle that we should accept.

@TigerStars

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