I’ve never quite seen anything like the period of time we are in now. It is the first time in history an independent populist businessman has been sworn in as President of the United States. This has created the most unpredictable economic and geopolitical environment in my lifetime, and in many respects it rivals those of any period in the history of this country.
That means the Great American Reset that we are all now moving through has multiple paths it could take with multiple potential outcomes. How it unfolds depends on a number of unanswered questions.
Question #1: How will President Trump go about enacting his agenda?
It is loosely defined at best and while a good 35% of the country is all for it (at least what they seem to know about it), another 30-40% are lukewarm. And of course there is that 30% that are staunchly opposed to it. There is no question that Trump can galvanize support from his 35% to put pressure on Congress, which leads me to the next question.
Question #2: How much opposition will actually materialize from the hard left secular Progressives?
The power structure of the Democratic party and the entrenched establishment Republicans will actively (yet subtly in the case of establishment Republicans) oppose his agenda. But it is yet to be seen if they can galvanize a critical mass of American people to provide the support needed for their opposition to have meaningful effect.
The highly anticipated mass protest and disruption of Trump’s inauguration didn’t materialize. Not even close. Is this an early indication that the massive grass roots opposition that the media and celebrities have told us exists really doesn’t? If so, this leaves the establishment to slug it out in the halls of Congress and through other more covert means.
Question #3: How will world leaders react to the global rise of populism?
First there was Brexit. Then came President Trump. This year France and Germany have elections and their populist/anti-globalist candidates are surging in the polls. If either or both nations elect populist/anti-globalist leaders, Europe will need to figure out how to untangle their intertwined politics and economies while still maintaining peace culturally.
This is where the double-edged sword of populism rears its head. Yes, it rightfully empowers ordinary people. However, nationalism can generate a wave of economic protectionism. These policies can go too far, causing unnecessary economic strain as trade flows rebalance. The door is then open for the elites to use their propaganda machines to inflame old passions and manipulate the people into becoming hostile toward other nations. As the old saying goes – when goods do not cross borders, armies do.
Question #4: When will the long anticipated global sovereign debt crisis become a major factor in the world?
This is a big one. I said months ago, it did not matter who won the Presidency. The next President will have to deal with it. With Trump’s election however, the economic cross currents are going to be strong enough to confuse even the most seasoned economists.
If enacted, President Trump’s policies of deep cost cutting along with tax cuts and repatriation of a trillion dollars or more in offshore corporate profits will boost the value of the dollar. However, a strong dollar is also a sharp double edged sword.
A strong dollar attracts capital investment which would boost the economy. This in turn would lead to the Fed raising rates. In a world awash with debt, national deficits would explode higher as the cost of servicing that debt drastically increases. Higher interest rates can also attract more overseas capital and further strengthen the dollar.
Unfortunately, a strong dollar makes our goods and services more expensive overseas. It also has a negative impact on emerging economies that have their currencies pegged to the value of the dollar. So, where does America sell the products and services created by our growing economy if the rest of the world falls into recession?
Those are but four nagging questions I have as I examine the state of the Great American Reset post inauguration day. There are many others.
Will Trump be able to calm some of the last minute geopolitical tensions Obama created with Putin?
Will China continue to flex its muscles over Taiwan?
Will Trump’s business based hard line negotiating style play in the world of politics?
Will the nation’s Community Organizer in Chief stay out of the limelight or break tradition and actively engage in opposition?
How far can the Fed raise rates without popping the sovereign debt bubble?
I could go on, but you get the picture.
We are headed for a period of great uncertainty. The Great American Reset under a Hillary presidency would have been a little more predictable. Established trends would simply be projected into the future until they reached a crisis point.
Instead, the entire geopolitical world has been destabilized. There are those that hope that the well established trend toward globalism (by players decidedly unfriendly to their worldview) can be reversed without too much disruption. Unfortunately, the differences between the secular/Progressive worldview driving the original trend and the Judeo/Christian worldview leading the trend change is of such magnitude that history does not give us comfort that it will be uneventful.
Then there is the simple math of the looming debt crisis. Conventional wisdom among those economists I follow and trust is growing that Trump’s policies would likely strengthen our domestic economy and may delay the onset of the crisis here in the United States. Those same policies could however, speed the onset of the crisis in much of the rest of the world. See question #3 for how that could play out. Regardless, the cold hard numbers will eventually impose their will on the world, including here at home. The question as always remains one of timing and magnitude.
So what is the plan among all this uncertainty? Simply this…
Do not let your guard down. This is no time to become complacent. Over the next few months a new trendline will begin to emerge that will help us gain a feel for what is to come and to a lesser degree when.
As we await the emergence of that trendline, I will turn my focus to address a subject that I am quite involved with and that is a primary contributor to all of the uncertainty we are dealing with today. Our monetary system. We can dramatically reduce our monetary system’s role in fostering global economic and political instability. This will free future generations to focus on building the Kingdom of God with a monetary system that supports their efforts rather than one that is openly hostile toward it.
The inauguration is over. Who knows what tomorrow brings? Rest in the peace of God, knowing that in due time He will reveal His plans. It is then we can join Him in His work – and believe me, there is plenty of work to do.
P.S. If you missed last week’s post, I highly recommend that you read it and invest the time to view the documentary.
All the best,