dakomish23 wrote:CharlesOakley wrote:My unpopular opinion:
Historically, during QE, the Fed purchases large quantities of financial assets, like government bonds or mortgage-backed securities, injecting money into the economy. This increases liquidity—essentially printing money—and lowers interest rates. Banks and financial institutions get this cash first, using it to lend, invest, or buy assets like stocks. his influx of capital pushes the S&P higher as demand for equities rises. Asset holders—those who own stocks, real estate, or other investments—see their wealth grow.
This QE increases the money supply, which devalues the dollar over time. As prices for goods and services rise—think groceries, rent, or gas—the purchasing power of the poor erodes faster than their income can adjust. Meanwhile, asset holders’ wealth, tied to stocks or property, outpaces inflation, widening the wealth gap.
The tariffs should create thousands of high-quality manufacturing jobs over the next few years. We already see commitments from Hyundai (20B), Johnson&Johnson (55B), TSMC (100B) and Stellantis (5B). If manufacturing returns, it means jobs—factory roles paying $30+ an hour, often in Rust Belt states where the working class has been gutted by decades of offshoring. More jobs mean more wages circulating in local economies, not leaking overseas to pay foreign suppliers.
Second, keeping dollars in the U.S. strengthens this effect. When companies source domestically, payments stay within the American financial system rather than funding foreign trade deficits. This could bolster the dollar’s value long-term, reducing reliance on imported inflation. For the working class, this translates to more stable purchasing power compared to a world where cheap imports mask wage stagnation.
Tariffs are also a strong negotiation tool to force other countries to lower their tariffs. If this works, we will see demand for US goods abroad increase, which could encourage even more manufacturing growth. There is definitely risk - China, sitting on a $400 billion trade surplus with the US, could dig in, escalating a trade war—higher prices, fewer exports, and a hit to both workers and markets.
The benefits aren’t instant—short-term inflation from pricier goods could sting, with estimates of a 1-2% CPI bump in 2025. But over a decade, if tariffs stick and manufacturing takes root, job growth could outpace that pain.
The top 10% wealthiest people own 90% of U.S. equities. Given that the tariffs look to cause growth in the middle-class at the expense of the wealthy, I'm still optimistic.
PS
BTC is showing itself as a superior store of value compared the the S&P
Conservative tariff wars fail b/c they don’t invest in industrial policy to meet the demands for goods. They always just free market it.
Tariffs for the sake of tariffs is a foolish errand. There is no financial end game here that benefits the bottom 90%
They tried this back in the 1930s and it made the depression worse. Smoot-Hawley. Why are we doing this again? Oh, right, the dumbest president ever has too much power. This won't end well.
RIP mags
