this post was submitted on 27 Apr 2025
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American Capitalism is in crisis, and this crisis has been managed and minimized for decades going back to the end of WWII when the stage was set to position the USD as the worlds reserve currency. This has encouraged the development of Financialization and the reduction in real productive forces in the American economy.
Because the economy is standing on financial forces, it is wildly unstable and its value is mostly tied up in perception. It is propped up by several bubbles: Housing and Tech being the largest of the two.
Since most of the worlds liquidity is tied up in USD it's possible to trigger a global recession if the USD drops significantly. The tariffs threaten this outcome. The threats are an attempt to reorganize the balance of trade in favor of the US. Again the US is trying to externalize the contradictions in American capitalism, making it the worlds problem.
This, however, isn't necessarily going to have the desired outcomes. These moves will only reveal China as the most rational actor in the world economy and pull nations to them.