Ihad read a novel - A Man called Ove - about a man who was so unremarkable and self-effacing as to be almost invisible. And then there is a contrast

What does one call someone who heads the country, rags and bullies leaders through social media, pulls out radical ideas day on day, thrives on bluster and hyperbole and believes in calling a spade a spade? He is called Trump!

Trump is someone you want to ignore due to the craziness of his ideas, but you do that at your own peril as he is dead serious about his wacky proposals. He is set on Making America Great Again (MAGA). But can he do that by bullying and unilaterally threatening with tariffs is a Zillion dollar question.

Whatever the outcome, we all need to sit up and take notice. And also wear helmets to protect from the projectiles he is aiming all around.

Dedollarisation

Trump virtually froths at the mouth when he hears the word dedollarisation. He has threatened BRICS with 100% tariffs if they threaten the wonderful US economy and the mighty Dollar. BRICS currency is some years away, considering the disparate nature of the membership and their varying requirements. People have called it a motley group of countries and it is. However, BRICs cannot be wished away.

It is wrongly believed that another reserve currency will challenge the hegemony of the dollar and that is when dedollarisation will happen. A new reserve currency may never emerge and yet dedollarisation can happen.

Dedollarisation is happening as many countries have started using barter trade as well as trading bilaterally in their currencies. BRICs nations are trying to setup currency settlement networks like M- Bridge. China, India and Russia have their own systems with differing capabilities. China has Cross- border Interbank Payments system (CIPS), India has Unified Payment Interface (UPI) and Russia has MIR. This is whittling away the dollar hegemony.

Trumps threats and hectoring may even work in the short-term; but it will accelerate dedollarisation in the long-term.

Tackling waste & collecting dues and rent

Trump has dived headlong into cutting off wasteful expenditure, that seems to be a byword in the corridors of US Governmental power. Millions getting pensions that they are not supposed to get. Massive spending on Illegal immigrants who were housed in five-star hotels for months amounting to hundreds of millions of dollars and grants of liberal doles to them to take care of their day to day expenses!

Apart from these, lots of expenditure is also unaccounted. As an example, Pentagon, the US Department of Defence HQ, is not able to fully account how it has spent over USD 800 billion of annual budget; also, it is also not able to account for the USD 4 Trillion of Defence assets spread across the US, due to which it keeps buying things that may already be there. In many other departments, there are gaping holes in tens of billions of dollars and no one knows where the money went. This is incompetence, graft, corruption on a gargantuan scale!

Then there are programs like USAID, masquerading as benign programs, but funnels money to create unrest, engineer uprising and protests, foment trouble, buy influence, change regimes, start and fuel wars all to ensure that US continues to be the preeminent power in the world and thrive.

Trump is not interested in most of them. Not that he is any more ethical than those before him he prefers far more direct methods and wants clear quid pro quo for anything he hands out. Trump is not against wars like he makes it out and many people think he just wants to be paid for everything in full!

That is why he is after Ukraine to get rare earth mining concessions in exchange for all the money US has pumped into the war with Russia. The irony is that Ukraine will probably have to part with about USD 500 billion of rare earths, maybe even land and other resources, when they have almost lost the war that US and the west had fuelled. If anything, they will lose a good portion of their territory to Russia. The supreme irony is that US & Russia are making deals to carve up Ukraine for themselves!

Tariffs and tax cuts

Tariffs are the tool of choice for Trump. It was, in his first outing and continues to take centre-stage in his second as well. Tariffs sound better than sanctions but can have devastating effects as they may be more wide ranging and crippling unlike sanctions that maybe more specific (like a few entities connected with nuclear energy are sanctioned and hence not as problematic to navigate).

Jingoism is great when you play to the gallery. MAGA crowd loves Trump for that. But tariffs are a double-edged sword. When US slaps tariffs, the other country will also take counter measures. When tariffs are applied, that item would become costlier for US consumer and hence inflationary. Tariffs would also impact US ability to export to other countries who have applied counter-tariffs as the prices would be higher and may not be able to compete with other countries.

Trump has also said that the tariffs so collected would allow US to lower the taxes. Again, it sounds wonderful; but hardly has a chance of success. In a tariff regime, things would become costly for everyone but tax savings are only for those who pay taxes. Hence, even if this works, it will help the more affluent sections of the society only.

Tackling debt

Trump is an idea-a-minute President! His latest brainwave is a Gold-card which will allow people from across the world to get US Citizenship. The catch is that one has to pay USD 5 million for it. This is in contrast to the EB-5 ( Citizenship by investment ) where one needs to invest between USD 800,000 to about 1 million, depending on the investment destination. In EB-5, one will most likely get the investment back, along with some returns. The Gold-card scheme in contrast would mean paying US a one-time charge for US Citizenship. This charge for Indians would be about Rs.43 Crores. This is mind-numbing expense to relocate to a country whose future prospects are not entirely assured in a rapidly changing global scenario, where US influence is on the wane.

The other idea is to revalue Gold reserves at Fort Knox, which at todays value would be about USD 800 billion. To extinguish US government debt of USD 36 Trillion, Gold needs to be revalued to about USD 1.3 Lakhs an ounce ( as compared to USD 2,950 an ounce at the moment ). This would mean devaluation of the dollar to that extent. This will have unknown consequences for the US and the world. Due to that it will probably remain only on paper.

Also, there is uncertainty whether Fort Knox holds the extent of gold it is supposed to be having. There is also another allegation that some of the Gold Ingots are actually Tungsten Ingots coated with Gold. Tungsten and Gold have a density which are very similar ( difference of just 0.14% ) and hence can easily masquerade as Gold. So how much Gold US holds itself is in question.

Solving US debt through Tariffs, Gold-card, Gold repricing and other such schemes like replacing the system with CBDC etc. are good for mind games and little else.

Advantage US?

A hard talking President who rubs people everywhere the wrong way ( including close allies like Canada, Germany, European Union etc. ) would probably be a liability in the long- term.

His blow-hot, blow-cold strategies are that of a hard negotiator, which may yield some concessions. Shooting off the mouth is another problem. Quoting wildly wrong figures like India has a trade surplus of USD 100 billion [ actual is USD 42 billion ] or India levies 100% on bikes [ reality is 30% ] may sit well with the MAGA supporters, but shows him as an ill-prepared, manipulative figure who cannot be trusted.

In the short-term, he may be able to show some results. That is the best that can be said about The man called Trump!

These are interesting times for the World. It gives many countries opportunities to realign and forge new alliances. The world is in transition and a new world order may start taking shape sooner than most expect.