It amazes me the contortions some people go through to maintain the belief that this administration is competent.
Occam's razor suggests that they just have no idea what they're doing.
Occam's razor suggests that they just have no idea what they're doing.
You occasionally see the people jumping between different ideas as to what the underlying plan is, once events no longer support their initial idea.
1. When equities crash, market liquidity floods the bond market causing yields to drop
2. Refinance debt at these lower rates massively reducing interest burden
3. Cut government spending to cause rates to drop further
4. Reduced rates with a balanced budget results in non-inflationary borrowing and an economic upswing
Along the way, eliminate taxes for those earning below $150k.
If all of the above happens at the expense of equity holders so be it.
This plan has been made clear by multiple people from within the administration (namely Bessent who is one of the greatest macro investors of all time).
Now there’s many things to criticize in this plan (and lots of risk and unknown possible second order effects), but to describe it as “genuine chaos” or ineptitude is strange.
There's a plan, it's to reshape the global trade à la Bretton-Woods, and the Plaza Accords.
The rest is just noise and plausible deniability for people to gobble up and accept to have been shoved into a New World Order.
Do you have sources?
(I also subscribe to the "genuine chaos" theory, but your comment makes sense)
https://www.foxnews.com/person/r/tanvi-ratna
It’s weird that Congress, the body constitutionally responsible for tariffs and their results, acts like they don’t know about it.
I don't know much about markets so genuinely curious as to why the opposite happened in practice (yields went up)?
So when those leaders start acting in a way that is irrational or clearly damaging, there's a pretty strong cognitive dissonance. There are two ways to deal with it:
- Assume that, since they're the higher-ups, they must know what they're doing. Therefore there must be some sort of plan that you're not able or supposed to understand.
- Reassess the notion that the higher-ups are always the most capable or deserving people, and assume there's a chance for inept people to access positions of power.
The first one is the path of least resistance, since it doesn't require challenging a fundamental pillar of your worldview.