Hot damn, i am also not an economist, I had to read that article 3 times just to grasps what Yanis is trying to say.
So in essence, when Trump and Musk said, brace for recession, it will have to be bad before it gets good, this article confirms it.
Trump wants to devalue the dollar to boost exports and thus strengthen the domestic production?
This i don't understand though:
This is what his critics do not understand. They mistakenly think that he thinks that his tariffs will reduce America’s trade deficit on their own. He knows they will not. Their utility comes from their capacity to shock foreign central bankers into reducing domestic interest rates. Consequently, the euro, the yen and the renminbi will soften relative to the dollar. This will cancel out the price hikes of goods imported into the US, and leave the prices American consumers pay unaffected. The tariffed countries will be in effect paying for Trump’s tariffs.
So foreign currencies will also soften relative to the dollar? How can all currencies devalue at the same time? Is he trying to create world wide recession ?
If someone could ELI5 for us, that'd be great.
Another thing I'd like to mention, I respect Yanis a lot but Trump has never given us any indication he indeed thinks and understands economics on this level. Maybe he treats us all as dumbasses and dumbs it down for us but the truth is, he has never spoken in terms that would indicate he understands economy at this level. So he's either getting muppetered by others or Yanis is giving him too much credit.
ok thanks . by linked i meant this fediverse thing. I was reading here on reddit