It's all about the debt. Is Trump hastening the inevitable?

 CHINA UNVEILS NEW YUAN BASED PAYMENT SYSTEM

MULTIPOLAR ECONOMIC SYSTEM ACCELERATES

It is without a doubt that dramatic changes are coming to the global economic and  political system. One must wonder if the Trump administration believes it is better to rip the Band-Aids off and hasten these changes so stability and new realities can be absorbed. It is most definitely a work in progress and I doubt anyone knows what the real outcome will be.

Much of this has to do with the unsustainable and growing U.S. debt. Each point of interest rate cost the U.S. $1 billion in interest. It seems the hope was to drive the yield down on treasury debt and lessen the interest problem on $9 Trillion of debt maturing this year, Over $27 Trillion in the next 3 years. Historically a lower stock market sends investors into the bond market and lowers yields, it does not seem to be working. Foreign investors especially China can sell their large holdings and drive interest rates up, and that may be what is happening.

While Trump's analysis of the tariffs and trade barriers is correct, the cure may be much more difficult if attempted with the whole world at one time. Negotiations with the EU, Canada and Mexico are the easy ones, China and the east may feel it is time to decouple from the U.S. completely and the time may be now.  This would put massive pressure on U.S. retailers to find enough products to service their customers. Maybe the Trump administration just wants to get the move to a multipolar economic system over as quickly as possible?

Yesterday China announced the introduction of a rival to the swift payment system, based on the Chinese currency that will be able to consummate transactions in 7 seconds and cost 98% less than the swift system. Many believe the use of the Chinese currency, yet another fiat currency, will only be temporary. It is anticipated that this system will be adopted by the BRICS group and the Gulf countries. It will be a move away from the dollar. It could capture over 40% of the world's market. Some question if the U.S. could freeze the sale of U.S. bonds in a similar fashion as was done to the Russian assets. Any such move would be the instant end of the U.S. dollar.

The next big question is what is going to replace the dollar as the world's reserve currency. The almost non stop rise in the Gold price indicates that the amassing of gold by central banks is in anticipation of a new currency, backed by gold. At this point only speculation, but much of the funding for these gold purchase has been selling of U.S. debt. 

It seems this tariff business is more than just a rebalancing of trade issues, but a potential trigger to accelerate the move to new multipolar economic and political spheres of influence, no longer dominated by the U.S. and its allies.