According to the preponderance of experts on CNBC, FOX Business, Bloomberg…you name it…the sky is falling on Wall Street because of Trump’s stupid, dumb, crazy, monstrous, ill-conceived, ridiculous tariffs. Why Trump just does not understand the way the world works…free trade means every nation on the planet has unfettered access to the US market while US made goods are effectively banned from international trade. Trump’s tariffs are going to cause massive inflation that is going to plunge the US economy into recession…if not depression. A trade war is imminent that will destroy the delicate balance of international markets that maintains our standard of living. This is why the markets are cratering and your 401K is toast. Except it is not.
There are two reasons why the markets are down big and it has nothing to do with Trump’s tariff policies. Here they are…
1. Few people understand that the vast majority of trading on the world’s major stock exchanges is done by computers running algorithmic trading programs. The idea that the markets are moved by some investor in Peoria calling his broker and selling a hundred shares of XYX Corporation went by the wayside about the middle of the second half of the 20th century. Today super computers are trading billions of dollars of all manner of financial securities in nanoseconds after some trigger event causes the algorithms by which they abide to react. No human brain stands in the way but there is a computer god that does conduct the algorithm orchestra, and that god is not a god but rather a genie whose name is Aladdin! Really…not Disney’s Aladdin, but Larry Fink’s Aladdin.
Yes, that Larry Fink, the god-king of Blackrock that effectively controls the major corporations of the world through its investment funds. Besides controlling every corporation that makes everything that you need in order to live…your food, clothing, and shelter…Larry put together a really cool investment management computer program called Aladdin that runs the $10 trillion+ BlackRock portfolios and now guides most of the investment fund managers’ computers that manage the rest of the money in the world that is not managed by BlackRock.
Today Aladdin is essentially the guiding light of the world’s investment community as its algorithm is the soul of most of the investment algorithms running the world’s investment securities.
Why is this important to know right now? It is important to know because Larry Fink is a globalist card carrying member of the World Economic Forum and an international deep state operator extraordinaire. Larry views the world as an assembly of trans-national corporations whose only loyalty is to their shareholders, not as a collection of nation-states whose governments are supposed to be loyal to the interests of their citizens.
Larry views populist leaders like Donald Trump who are trying to put their own countries’ interests first as a cancer on the world stage. Larry and his globalist collaborators are the ones who oversaw the de-industrialization of America and the consequent destruction of the American middle class…the middle class that Donald Trump seeks to bring back to life. In Larry’s world a vibrant middle class in any country is a profit drag on the corporations that he controls along with his friends at Vanguard and State Street. The idea that Donald Trump would challenge the globalists’ perfect world of trade barriers that protect the slave masters as opposed to the legitimate interests of the nation states is just anathema to Larry’s very being. So, what is a god-king globalist to do in such a situation? If you are Larry Fink you just tell your personal genie Aladdin that your current wish is to crash the world stock markets and voila, you have instantly turned Donald Trump from a populist national hero into a wealth destroying villain who has just recklessly devastated the retirement savings of his core supporters…who should now despise him. Sounds like a plan, huh? That’s the first reason that the current market crash is happening, not the tariffs.
2. The second reason that the stock markets are crashing right now is very much related to what Donald Trump is doing in America at the moment, but again it has nothing to do with the tariffs. Since late 2010 to late 2024 the Dow Jones Industrial Average went from approximately 10,000 to 45,000. Without getting too technical here, you don’t do that…450% increase in fourteen years…based upon traditional drivers like corporate earnings. Historical long term annual return on the Dow used to be around 8% including dividends.
Something else crazy was going on these last fourteen years and the only thing that could possibly do anything like this is liquidity. Very simply the US federal debt has gone from about $13.5 trillion in 2010 to about $37.5 trillion in 2025 where much of the debt was created by printing fiat dollars rather than by creating real value in the economy. In 2024 the federal debt was increasing by $1 trillion every 100 days and the money printing was in triple overdrive. We’re talking about trillions of dollars being pumped into the economy with reckless abandon.
That money had to go somewhere and a lot of it ended up in the stock markets of the world, driving stock prices through the proverbial roof. So, what is Donald Trump doing right now that is causing stock prices to crash that has nothing to do with tariffs? He is working to turn off the money spigot that has been driving this outrageous market. It’s that simple. Stock prices are as susceptible to inflation as are goods and services. When too much money is chasing too few of anything, the price of anything goes up…and in this case way up.
The fact of the matter is that Trump with the help of the DOGE have discovered massive, massive waste, fraud, and abuse in the spending of the U. S. government in the trillions of dollars. Additionally, they have found that over a long period of time various departments of the federal government have been paying for programs by making up dollars out of thin air. There are estimates that these fairy tale dollars may be fifty (50) to one hundred (100) times the annual federal deficit for 2024. If this were found to be true, the value of the dollar would totally collapse and the stock markets would literally implode…something that would make what we are seeing right now seem like a walk in the park.
Anyway, the stock markets for the last several years have been driven to extraordinary prices by a flood of liquidity resulting from incredibly colossal, uncontrolled government deficit spending and money printing. It’s kind of like a Ponzi scheme on nuclear steroids where you keep having to raise new investment to pay off old investors. At some point the music has to stop…Donald Trump has decided that it’s time for the orchestra to go home for the night and for the moment it’s curtains for the markets…nothing to do with tariffs.
The good news is that having the fluff blown out of the markets is no reflection on the state of the US economy. Larry Fink can do whatever he wants to scare the people by tanking the markets but that is all that it is…scare tactics meant to hurt Trump the Populist any way he can. Stopping the runaway train of government spending and money printing will bring us back to a true value-priced market based on corporate earnings. We’re returning to reality as it should be, led by someone who wants to make America great again. It’s going to be a bumpy ride but it's the only way to get ‘er done.
MAX
