If you haven’t read PART ONE of this two-part piece, you might want to read this first:
Another week begins living deep inside the Trump economic fantasy
As each week passes, it becomes increasingly complex to comprehend the depth of deceit that is now the foundation of this administration. Trump has castrated the corporate media, who, with the odd exceptions, are becoming complicit in a level of lies and obfuscation that is beyond breathtaking.
In this second part of my economic deep dive into the challenges facing Americans. I hate to begin by being Uncle Scrooge and announcing there may be no season to be jolly this year, I’m afraid. Trump now has two stock answers to every difficult question. ‘It’s a Democrat hoax’ and ‘It will take time’. I want to make it absolutely clear that Trump inherited the world’s strongest economy when he took up residence in the White House for the second time. The video I made below will provide the facts and some answers you may be interested in, too.
All he had to do was pick up where Biden left off and reap the benefits for free. He was handed an economic gift, and he chose instead to deliberately dismantle the very government that had given it to him. History will record it as a deliberate act of reckless economic vandalism by a president out of his depth in search of absolute power and self-enrichment. He is a man with a metaphorical ring through his nose, being led by a cabal intent on burning the global economy to the ground. There is absolutely no evidence that Trump has achieved anything for the benefit of either his country or the American people in the nine months since he took office.
The only beneficiaries of an administration that now rules by fiat are its corporate donors and the ultra-rich. His nod to no tax on tips and no tax on overtime are scraps from the master’s table to placate the masses before he removes their healthcare and puts the vulnerable and the disabled to work. He is feeding his base on a diet of political red meat, including mass deportation and hatred of ‘the other’, all while painting Democrats as their sworn enemy. In the words of his prince of darkness, Stephen Miller:
“The Democrat Party does not fight for, care about, or represent American citizens. It is an entity devoted exclusively to the defence of hardened criminals, gang-bangers, and illegal, alien killers and terrorists. The Democrat Party is not a political party. It is a domestic extremist organisation.”
Trump is selling an unequivocal message of ‘You are with us or against us’ to all Americans. There is little doubt that he has decided to target blue cities and states to rehearse the creation of a hostile environment in advance of the midterm elections, should he be forced to hold them. He wants to test how he can apply pressure to create a pretext for controlling who can vote. This is all about testing boundaries and checking in advance how far the Supreme Court will let him go. Given the shadow docket ruling yesterday, it seems evident that he will be free to act with total impunity.
I know it can be hard to read between the lies as the administration floods the zone daily. Thankfully, that’s what I’m here for, so let me attempt to explain what I believe will be an incoming economic shock that has the potential to make the 2008 crash look like a walk in the park. If you are fortunate enough to have the ability, you should be building a resilience fund by not spending on anything other than essentials. My deep concern is for the now estimated 60% of Americans living paycheck to paycheck. There is little doubt that when the shock hits, private equity will be ready and waiting to capitalise on the misery of those caught in the economic killing field.
These societal bottom feeders are already buying up mobile home trailer parks in anticipation of any collapse. Consider this for a moment: they are actively seeking to profit from the last refuge of those being fiscally cleansed from society. I am fully expecting them to open up tent rental space, too, but don’t expect that to be cheap either. There really is no low bar here.
The thing about the fantasy economy Trump is creating is that none of it, and I genuinely mean NONE of it, is real. His single claim to fame is tariff revenue. In his own words:
[The US] “could end up being a third-world country” [without tariffs].
He later went on to say on Truth Social:
If allowed to stand, this Decision would literally destroy the United States of America.
It’s important to note that the legal challenge to the tariffs is not coming from any left-wing political entity; it is coming from American small businesses. As reported by the BBC on September 4th, in respect of the tariffs:
Lawyers representing small businesses challenging the tariffs said they were confident they would win the case.
"These unlawful tariffs are inflicting serious harm on small businesses and jeopardising their survival," said Jeffrey Schwab of Liberty Justice Center. "We hope for a prompt resolution of this case for our clients."
Please note that the Liberty Justice Centre is an associate member of the State Policy Network, a web of state pressure groups that describe themselves as "think tanks" and drive a right-wing agenda in statehouses nationwide. So this is NOT some left-wing attack.
The federal Appeals Court ruled correctly, in my view, that:
[US law] “bestows significant authority on the president to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties or the like, or the power to tax”
It went on to say, many of Trump’s steep tariffs were “unbounded in scope, amount and duration” and “assert an expansive authority that is beyond the express limitations” of the law his administration has leaned on.
The whole Trump economic agenda is currently balancing on a one-legged stool, and history tells us that the Supreme Court will once again ride to his rescue. Even if it rules against him, the administration has already pledged to use a different mechanism to circumvent the judicial process to protect the tariffs, so nobody should hold their breath.
Without tariff revenue, he’s done. He would be forced to pay back billions of dollars to exporters, and it could also derail the preliminary trade deals struck with countries like the UK and the EU. He cannot afford to lose. To illustrate the economic impact of financial devastation, consider the graph below from the CBO. The dotted line maps the deficit without tariff revenue. The economy is now a tariff addict; without them, the consequences could be fiscally fatal. You should remember that the tariff money is YOUR money; it represents the cost of Trump’s hidden federal sales tax imposed on Americans, not foreign exporters.
This graph is the clearest indicator that SCOTUS will have no choice but to uphold the tariffs. The government revenue that should be derived from taxes is being deliberately shifted to a hidden sales tax on you. This is what then allows Trump to extort you to deliver massive tax cuts for the rich. This is a textbook example of tax regression that disproportionately hits low-income families, and he doesn’t give a damn, despite his claim that he loves the poor and the uneducated.
What you have to understand is that, despite Trump’s isolationist policies, the US still has to operate in a global economy that is now awake to his extortionist antics. He thought he could put tariffs on China, and they would fold. That was a colossal miscalculation, as he is now finding. They were ready for him, and the one leverage he thought he held over them with AI Chips set to generate billions for Nvidia and AMD has completely backfired as they have turned round and said, ‘no thanks’.
Trump has adopted a policy of what I like to call ‘forced investment’ by what were once friendly trading partners. It’s essential to understand how Trump deliberately distorts the lens through which he deceives the American people. Take, for example, Japan, which Trump claimed would invest $550 billion in the US as directed by him, with America expected to receive 90 per cent of the profits. No formal written agreement has been presented; Trump adds it to his fantasy investment list, which he then cites as fact in social media posts, press conferences and on Fox Entertainment.
The Japan deal was a prime example of the deception narrative employed by Trump, not just in this deal, but also in others, such as the EU and South Korea. Trump described these extortion terms as “signing bonuses” to secure tariffs that were already higher than they had paid before. Shortly after Trump went on a boasting spree about his abuse of a longstanding US trading partner, the Japanese had a much different understanding of the deal. As reported by River Akira Davis and Choe Sang-Hun in the New York Times (gifted here):
Ryosei Akazawa, Japan’s chief trade negotiator, conveyed a different message back to Tokyo: Japan would offer a blend of investment, loans and loan guarantees, totaling up to $550 billion, with profits to be allocated based on each side’s committed risk and financial contribution.
The scarcity of detail, and the absence of a publicly disclosed written joint agreement, prompted trade experts to question the substance of the investment proclamation.
It’s worth noting that many of the agreed investments Trump is claiming credit for were already agreed in principle with the former administration. Much as the new boards with his name on are going up across the country, claiming credit for infrastructure projects he opposed while Biden was in office—stolen infrastructure valour, as I like to call it.
Trump’s foreign inward investment model goes something like this: Foreign trade representatives mention a number, and Trump adds it to his fantasy investment list as fact; no documentation or formal agreement is made available for scrutiny, and he moves on to create the next fantasy investment. Neither the EU nor South Korea’s understanding of their alleged investment guarantee lines up with their announcements. It’s all just fantasy economics, as Americans find themselves living in an economic version of The Truman Show. Trump has become the Walter Mitty of geopolitics.
The sole reason that Trump has sued the pants off corporate media and taken narrative control of social media is to hide his lies and create this fantasy narrative that will eventually destroy the US economy. As I have maintained for months now, you can run from the truth, but you can’t hide. The problem is that while you are running away from it, the deceit leads to falsely elevated consumer sentiment, and this persists until the truth begins to show in people’s everyday living costs. This is what is starting to emerge at the moment. Americans are living in his economic alternative reality, where he uses the green lights of a totally disconnected stock market to fuel the lie.
Please pay close attention to the markets, because these are the same markets that ignored the evidence in 2008 that the subprime housing market bubble was about to burst. They played along with the lie that junk bonds had value while trying to make sure they were not holding the economic IED when the music stopped. Every hard-working American should be switching to self-preservation mode right now, but I fear millions will be unable to establish any fiscal resilience. Take it from me, the sharks are already circling. History has taught us that in any economic downturn, the only winners are the rich.
Every economic indicator is SCREAMING, save your money, and I cannot emphasise this advice enough. There are lots of moves in play at the moment as the government looks to prop up what is now clear to be a failing economy. The dollar has lost 11% of its value in the first half of 2025, which is the most significant dip since 1973. Trump always says nobody does things better than him, and on this one, he’s right. Those who have been on vacation in Europe will understand precisely what that means. In global economic terms, it means that everything you own is worth 11% less before you even get out of bed. Lower interest rates are generally used to stimulate the economy, but Trump now needs to use them to rescue the economy. The two are very different.
I had hoped to condense this piece into two parts, but clearly I miscalculated, and I don’t want to make this already lengthy post even longer. I will conclude the series tomorrow, which will allow me to explore the key indicators to watch and their implications for the job market moving forward. I also want to explore the impact on small businesses and the mounting cost of mass deportation, which I think are key to understanding the economic suicide that is taking place. Thanks for your patience, but I don’t want to leave anything out that might be of use to people.
Find PART THREE here
So very true!
Far too many people on both sides of the aisle are so damned blind, many in willful ignorance, and as a result, aided and abetted trump in his destruction of the United States of America.
Very insightful post. All of the sharks are circling, as the shoes drop on every area . Americans need to prepare themselves.