Another aspect of Trump’s tariffs that he and his advisers fail to understand is clearly related to his concepts of how the world economy functions, which were seriously forged in the Middle Ages. I do not say this out of being a Trump hater. My job is to be unbiased and call the shots as they are fired purely from an economic and historical perspective.

The dollar’s reserve status has nothing to do with the old world of thinking about backing, fiat, and gold. All currency is fiat, which means the government has decreed its value. From the earliest days of coinage, when it was invented in Lydia, the government established weight and fineness, and when war took place with Persia, the first debasement took place. That was still fiat, even though the coinage was gold and silver, for they lowered the weight but valued it the same.

The next financial capital of the world after Persia became Athens, Greece. There was the Peloponnesian War, where Sparta defeated them in 404 BC. Once again, we can see the cost of war, and they ran out of silver, issuing emergency coinage, bronze that was silver plated.

In 1963, President Kennedy issued an executive order to take silver out of the coinage. We, too, issued what became known as clad coinage. Again, a copper core was used, but nickel was placed on both sides to retain the appearance of a white metal like silver. This was the same response to inflation from the Vietnam War and the endless Neocon expenditures to dominate the world.

In the aftermath of World War II, the two countries that rose to the top of the economic food chain were Japan and Germany. They did so without gold; the true power was the productivity of the people. Russia is the wealthiest country in the world from a natural resource perspective. They had the largest gold reserve in history in 1917. Someone hid them so the Communists would not get them, and to this day, they have never been found. Russia had even issued platinum coinage during the 19th century. Yet, despite the resources, Communism suppressed human nature, and that destroyed the productivity of its people, preventing Russia from becoming the financial capital of the world simply because it has the most tangible assets.

What made the dollar the reserve currency was NOT gold – it was our productivity and freedom of the people to invent what they might. That was displayed with Nixon’s famous Kitchen Debate of 1959 with Kruschev. Nixon showed that the American living standard was the best in the world because of the freedom of the people to invent rather than be restrained by government and directed by the government, as took place even in Europe postwar.

The core behind the dollar reserve status has NOTHING to do with fiat nonsense since all currencies are fiat even when they were gold and silver. The people and their productive capacity are the true backing of the currency, precisely as was the case with ancient Rome. India was a significant trading partner with ancient Rome. There was a trade deficit with India since that is where all the spices came from and there was the importation of dyes and silk from China. Chinese records demonstrate that under the Roman Emperor Marcus Aurelius (161-1980AD), he had even sent an ambassador to China for trade negotiations.

While in Northern India, there was the Kishan Empire issued its own coinage in gold, in the south, they struck gold coinage for over 200 years, imitating Roman coinage. Why? Because of the trade with Rome, the economic dominance of Rome made it the reserve currency, so the gold carried a premium when issued by Rome.

Even before Rome, we see imitations of the coinage of Alexander the Great. These were “imitations” rather than counterfeits because they were struck in silver with generally the same weight. We find imitations of Alexander’s coinage in Eastern Europe right into Switzerland.  Once again, this demonstrates that for centuries, a currency’s value carried a premium if it were the dominant economy that others traded with. All the old theories on money are out the window that were based on the people of the Middle Ages when coinage was merely exchanged on pure metal content because Europe was divided and there was no dominant economic power.

This has been misleading ever since the days of Sir Thomas Gresham when debasement took place and currency values declined solely because the exchange rates were entirely confined to the metal content.

It was Napoleon who first created the idea of a single currency. Like Alexander the Great, as he conquered regions, he revised their monetary system by standardizing the weights. Thus, we see that the economic system of Napoleon was all based on the metal content.

The world saw the advantage of a quasi-single currency despite the varying names. They were all established on the standardization of metal weight. The Latin Monetary Union eventually collapsed because the coinage union excluded several forms of monetary issues that were left unregulated and became a loophole when in financial crisis. Italy, Greece, and the Pontifical State all faced financial imbalances linked to the wars of national unification. To cover the costs, as has always been the case since the birth of coinage in the 6th century BC, they all used increased amounts of unregulated forms of monetary issue. This included the issue of banknotes inconvertible in gold and silver, as well as of copper coinage.

The United States $5 gold coin weighed 8.359 grams at 90% pure, so it was overvalued in the Latin Monetary Union. They prepared a pattern of a $4 Stella to join the union. But it was never issued, and the LMU collapsed.

Trump has been anti-BRICS, seeing that as a threat to the reserve state of the dollar yet overlooking the entire reason BRICS has even come about. BRICS was set in motion because our Neocons wanted to destroy the Russian economy so they could invade and conquer Russia – a lifelong dream. Removing Russia from SWIFT sent a red flag to the entire world – BRICS is now a reaction to the arrogance of the American Neocons and has grown to exceed 50% of the world population. Its backing is irrelevant if any. The issue is neutral politics as the SWIFT used to be before the Russian Sanctions.

DO AS THE USA COMMANDS, OR YOU, TOO, WILL BE BARRED FROM THE WORLD ECONOMY!

You had the Biden Administration threatening even China to remove them from SWIFT if they helped Russia. They only saw their military power and the quest to conquer Russia while being ignorant of how the world economy functions. China immediately set up its CIPS system – the alternative to SWIFT. The Neocons divided the world economy and this set in motion the beginning of the end of the dollar as the reserve currency, which will evolve over time for post-2032.

What makes the dollar the reserve currency today? Like Rome, we remain the dominant economic power. Germany and Japan rose from the ashes by selling goods to American consumers. This is what Trump DOES NOT understand. Imposing 25% tariffs, thinking he will Make America Great Again by forcing manufacturers to return to the United States, will not just send the rest of the world into economic decline; it will remove the very foundation as to why the US greenback became the reserve currency because everyone could sell to Americans and as such they had to deal in dollars.

Companies left because, thanks to the Supreme Court during the progressive era, rules that the income tax applied to worldwide income. No other country was taxed in that manner. Companies that were competitive worldwide had to leave. If we allocate global trade according to the flag the company flies, the USA had virtually a trade surplus because American companies have always been far more competitive and innovative than foreign competition.

Trump’s ideas, even cryptocurrencies, are all based on antiquated theories that expired long ago. Trump’s advisers have decided to impose drastic tariffs, thinking this will somehow Make America Great Again, but they are just wrong. It will shrink the US economy and send the rest of the world into recession. In the end, America will decline, which is all part of our computer’s forecast for 2032.

Sorry Donald – We are headed into a recession, and unemployment will rise into 2026 – not decline!

Medical insurance and pharmaceutical companies are predatory. The number one cause of bankruptcy in the United States is health care. This is a growing concern as our population ages. Unfortunately, we have all lost someone to cancer. A troubling but important statistic from the American Journal of Medicine explains that 42% of cancer patients will lose their entire life savings within the first two years of treatment.

The total cost of cancer care in America reached an estimated $183 billion in 2015. Ten years later, that figure is set to rise by 21% to $222 billion. Different cancers require different treatments. The US currently allows Big Pharma and insurance companies to charge and cover what they see fit. CAR T-cell therapy, for example, treats lymphoblastic leukemia but can cost up to $475,000 per patient. Kimmtrak treatment for melanoma could cost $975,520. T-cell lymphoma patients could pay $842,585 for Folotyn treatments. The costs are simply astronomical, as are the profits for Big Pharma.

Turning back to the study by the American Journal of Medicine, around 85% of cancer patients will be forced to leave the workforce at no fault of their own. Within the first two years, 42.4% of patients empty their entire life savings on treatments, with the average net worth declining by $92,098. By year four, 38.2% deplete all their assets and are forced to pay $51,882 on average.

I am not advocating for universal health care where the quality of care drastically declines. I am advocating for measures on the pharmaceutical and insurance companies that have free reign over the lives of millions. Few politicians on the right or left speak out against this mass injustice because these same organizations line their pockets.

The Inflation Reduction Act allowed Medicare to negotiate the price of certain drugs based on what Big Pharma sees as a “maximum fair price.” Part D drugs will be subjected to this law in 2026. Donald Trump, in his first term, demanded transparency from hospitals and required them to list the prices of procedures, but that has not been adopted on a large scale basis.

Look at the most recent election. Eli Lilly under the Lilly PAC donated over $180,000 to politicians running for the House and Senate on the right and left. Then individual CEOs donated the maximum individual contribution permitted by law. CEO David Ricks paid off Republican Congressman Brett Guthrie from Kentucky and donated to two PACs, including the Carolina Victory Fund, which donates solely to Democratic candidates.

Johnson and Johnson has the J&J PAC that paid out $500,000 from 2023 to 2024 to both Republicans and Democrats. AbbVie has its own super PAC as well, and CEO Robert Michael pays into the PAC monthly. Merck & Co. has the Merck PAC and paid out over $300,000 to members of the House and Senate. CEO Robert Davis shelled out the maximum personal contribution to candidates on both sides. Amgen has the Amgen PAC and a CEO who also donates to candidates but favors Republicans. Pfizer, of course, has become a Democratic-leaning organization. The Pfizer PAC donated 63% of funding to Democrats compared to 37% to Democrats.

America permits pharmaceutical super PACs from outside the US to influence our politicians. Novartis, Novo Nordisk, Roche, and AstraZeneca all donated to candidates during the 2024 election period. Yet, everyone was concerned about foreign interference.

Two wings on the same bird, Washington is filled with corrupt individuals who serve their own private interests. These companies could charge a fair amount for procedures and still make a profit. There is absolutely no reason for people in the richest nation in the world to face bankruptcy when they fall ill. Who will be brave enough to tackle Big Pharma and the insurance companies? Or should I say, who cannot be bought?

A new Quinnipiac poll revealed that the Democrats have completely fallen out of favor with the American people. Only 31% of voters see the party in a favorable light. The people look at the past administrations of Jefferson, Jackson, Kennedy, Clinton, Obama and Biden with a 57% unfavorable rating – a historic low.

Once they seized power under Biden in 2020, they reached at best 51% compared to Clinton, who had captured 58%. Biden attempted to implement new societal norms with woke ideology that completely backfired. The economy will always sway elections and favorability. Build Back Better and Bidenomics failed. The average American does not feel represented or seen by the Democratic Party. Not a single person can honestly say that they were better off under Biden.

Yet, they cling to Marxism in hopes of reliving the glory days of Franklin D. Roosevelt. That was the only time that Americans welcomed socialistic messaging but the timing was on point and it also coincided with the state of the American economy. The Party of Jefferson split into the Democrats vs. Republicans (South vs. North) over slavery. The Democratic Party of today will soon be a relic of the past.

Even those on the far left like Bernie Sanders have admitted that their party is crumbling. “The business model, if you like, of the Democratic Party for the last 15 years or so has been a failure. People sometimes don’t see that because there was a charismatic individual named Barack Obama,” he once said. Moreover, he declared that Kamala LOST because the Democrats ABANDONED the public:

“It should come as no great surprise that a Democratic Party which has abandoned working class people would find that the working class has abandoned them. While the Democratic leadership defends the status quo, the American people are angry and want change. And they’re right.”

Bernie has always been clear on his stance. Does anyone know what the overall Democratic Party stands for? We have the center liberals who condone the war in Gaza and Ukraine. Then we have those who support Ukraine but want to abandon Israel. This is no longer the party of peace who opposes war. Then we have the Democrats like Nancy Pelosi who are overtly profiting on their position in the public sector through lobbying and insider trading. Even AOC has come out and said that this overt corruption must end. The people see this as a massive slap in the face amid the cost of living crisis.

Younger Democrats under 35 are far more likely to sympathize with Palestine, as a Quinnipiac University poll from last February found that 69% disapprove of how Biden handled the war, but older Democrats (77%) did approve.

Kamala attempted to use abortion to sway undecided and one issue voters. A June 2024 Cygnal survey found that Americans are understandably more concerned with other issues plaguing the nation. No one is concerned with abortions when they cannot afford shelter or food. Illegal immigration was stated as the second highest priority for voters, with 19.7% of voters voicing concerns after inflation (27.9%). Immigration has become another issue that the Democrats are divided over. Countless sanctuary cities have realized that their budgets cannot handle these newcomers. Their voters are disgruntled and many Democrats now agree that that there must be some order at the border. But on the other side, we have the likes of California’s Gavin Newsom who said he will fight ICE at every step.

Everyone forgets that Donald Trump was once a Democrat. Countless members of his cabinet from Tulsi Gabbard to RFK Jr were also once Democrats. The party has spiraled into a disorganized mess that lacks any core values or strong platforms. They are divided and will break apart as voters continue to flee and the centrists and socialists collide.

Conservative Leader Pierre Poilievre, who is widely considered one of the Globalists, proposed deporting illegal migrants who commit crimes. Why this is controversial is beyond me. Poilievre declared “woke ideology” a dangerous mindset that leads to crimes, such as antisemitism against Jews on behalf of Palestine. “We must not just condemn these things. We must take action against them. We must deport from our country any temporary resident that is here on a permit or a visa that is carrying out violence or hate crimes on our soil,” Poilievre said.

I reported last month that Canada’s migrant crisis is costing the nation $16 billion annually. Taxpayers are paying around $224 daily to fund newcomers, as it costs around $81,760 per year to fund each asylum seeker who enters Canada.

Home inventory has shrunk to unseen levels as millions of migrants and foreign workers have caused a massive uptick in demand. Jobs are sparse, especially entry-level jobs, and over 1 million Canadians are out of work. More importantly, Canada’s population surpassed 41 million citizens, marking an all-time UNSUSTAINABLE high. Disgraced former PM Justin Trudeau insisted that Canada needed foreign workers and handed out visas to temporary foreign workers like candy on Halloween.

There are countless reasons for Canada to implement a mass deportation program. Deporting criminals who are not legal residents should be a welcomed start. We saw Toronto police ask residents to allow criminals to steal their cars to prevent home invasions after 26 neighborhoods in Toronto reported a 50% increase in major crimes over a one-year span.

Yet, Canada already has legislation in place to remove illegals who commit crimes. In fact, around 14,000 people were reported last year. The larger question becomes, what will Canada do to curb migration and remove the countless asylum seekers living off of Canadian taxes? Then we have the issue of removing woke rhetoric from Canadian society. Nearly all Build Back Better nations are seeing a sudden reversal as governments pushed the people so far left that they fled to the right.

COMMENT: My question is about your forecast that the separation of the United States would begin with California and that 2022 would be the turn in your model. Please explain how you came to the 2022 target and how this separation will develop.

DVS

ANSWER: The target 2022 was 172 years (2 x 8.6) from joining the USA in 1850 after the 1846 California’s Bear Flag Rebellion. However, the model turned up in 2018, when California first proposed exiting the USA because of Trump.

We warned that the Economic Confidence Model peak of 2015.75 was the peak in government. Trump won against all odds and forecasts in 2016, and within 2 years of that, California was proposing to separate from the United States.

It was 1846, the starting point for the separation movement 172 years later (2018). It was 1846 when the California Republic was a rebellion breakaway territory from Mexico, which lasted for 25 days between June 14th and July 9th, 1846. It was an area north of San Francisco. Ironically, it only involved 33 illegal American immigrants who had entered without official permission. They staged a rebellion against the Mexican government over the issue that they had not been allowed to buy or rent land and were threatened with deportation. Today, California wants to be a sanctuary state for everyone other than Americans. This is a 180-degree opposite turn, which seems to be cyclical – i.e., bull vs bear market.

Mexican officials were concerned about the prospect of war with the United States, so they were trying to prohibit the migration of Americans to retain their power and culture. The rebels created a flag named “California Republic” and raised it. It has always been a question of whether they did this purposefully to seize California. The insurgents elected military officers, but no civil structure was ever created. Their flag featured a California grizzly bear, which gave the name Bear Flag Rebellion.

Three weeks later, on July 5th, 1846, the Republic’s 100 to 200 men military grew much like Ukraine suddenly raising an army. The Bear Flag Rebellion ended on July 9th when, conveniently, the U.S. Navy raised the United States flag. Did the US plan to seize California and send these 33 guys into the area to start the rebellion so the USA did not appear to be invading Mexico and starting a full-fledged war? From 1846 onward, the U.S. military began occupying California. They then joined the union in 1850.

It was November 2022 when Trump announced he would run in 2024, which increased the CalExit movement in 2022. This has improved tremendously. The joke is that Davin Nusom wants to become the king of California.

Just as the people in the Donbas are Russian and have nothing in common with Ukrainians who just hate them, they should be allowed to separate. Under that same reasoning, California as a whole has nothing in common with the majority of the country. They, too, should be allowed to separate. The United States will break apart in any event, most likely as soon as 2029, if not more post-2032. As I have explained in the tariffs pieces I have written, Trump will actually go down in history as Herbert Hoover of the 21st century.

COMMENT: We are toast !?

Then came John Maynard Keynes, a mathematician, not an economist. What he observed was the essence of a recession or depression. As uncertainty arises about the future, people will hoard their money and NOT spend it. This is what Gresham observed: debasing the coinage under Henry VIII, people hoarded the old coinage and spent the debased. The money supply shrinks with the velocity of money. I have been buying hoards of coins over the years, generally from the 3rd century AD when the political situation of the Roman Empire was in chaos. People buried the money in times of uncertainty. This is a fundamental human nature aspect.

Neither Trump nor RFK will call me in until a crisis.

Once in power, nobody admits a mistake until there is no choice!

We will post when we have dates and costs.

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Those who want to help with this project can also try to organize universities to have a streaming session for students worldwide. I know they will be doing this in a few countries, including China.

Babylon Bee

This interview is also available on X and Spotify: