PISSED OFF World DELIVERS FATAL BLOW to U.S. ECONOMY

What this episode is about

The content discusses the significant impact of recent geopolitical events, particularly the illegal kidnapping of Venezuelan President Nicolas Maduro, on U.S. economic stability and global trade. It highlights the turmoil caused by the Trump administration's unilateral tariffs and their repercussions, including increased inflation and a reevaluation of international alliances, while also touching on the legal challenges surrounding the use of executive power in implementing these tariffs.

Key takeaways

• US tariffs: a double-edged sword fueling trade chaos while inflating prices and straining alliances.
• The Supreme Court holds the Trump administration's economic fate, but what if they just kick the can?
• A 30-billion-dollar drop in the trade deficit, but is that victory or just a temporary mirage?
• US imports are becoming a scapegoat for economic woes—consumption isn't extraction, it's how economies thrive!
• Without a national industrial policy, tariffs are just band-aids on a bullet wound—manufacturing needs more than protection.

Who speaks in this episode?

• Max (Guest) · 20 min speaking

What is discussed, and when

1. 0:00 – 5:00: Census Bureau
2. 5:00 – 10:00: Merkaser free trade agreement
3. 15:00 – 20:00: Triffin dilemma

Notable quotes from "PISSED OFF World DELIVERS FATAL BLOW to U.S. ECONOMY"

• Huge movement in the US balance of trade that the administration is definitely going to tout as a win. The US Census Bureau and the BEA announced that the goods and services…

  about Census Bureau · at 3:27

• Development that got relatively little attention in US media was the soontobe ratified Merkaser free trade agreement.

  about Merkaser free trade agreement · at 9:31

• Volume of dollars in circulation. Of course, there's a tipping point. There's something called the Triffin dilemma.

  about Triffin dilemma · at 17:03

Who and what is mentioned in this episode?

Companies & orgs

• Census Bureau — Company · 1 mention · first at 3:31

Concepts & topics

• Triffin dilemma — Concept · 2 mentions · first at 17:09
• Merkaser free trade agreement — Concept · 1 mention · first at 9:35

Full transcript with timestamps

0:00 Hey, this is Max from UNFR with the macro take from the Midas Touch Network. As if 2025 wasn't bad enough, the start of 2026 has been nothing short of astonishing with the Trump administration doubling down on destroying the global order. So, our top story today covers the fallout from the illegal kidnapping of Venezuelan President Nicolas Maduro. Now, apart from the serious geopolitical consequences of this brazen coup d'eta, this unconscionable violation of sovereignty might very well be the turning point of US economic hegemony.

0:35 All that and more on the macro take. So, let's go to dig into our top story on the economic fallout from the invasion of Venezuela. Let's look at some of the top headlines of the week to add some context. The theme is international because things are unraveling quickly and US economic policy is ground zero for all of it. So leading off, the Supreme Court was expected to release its opinion on the legality of Trump's unilateral or so-called reciprocal tariffs. There's a lot writing on this as Trump's tariffs have thrown global trade into utter chaos, increased input prices on US imports, eaten into corporate earnings, kept inflation elevated, and forced the world to rethink alliances. Well, this is punted for now. So observers are looking to next week for an announcement. And here's what you need to know. So, the Trump administration has been pushing through tariffs under something called,

1:36 which stands for the International Emergency Economic Powers Act, a law from 1977 that grants the president broad authority to regulate commerce and transactions under a declared national emergency. The stated national emergency of course was the fentinol crisis. Now, the logic is extremely shaky and many believe that even the Roberts court is going to have trouble justifying this maneuver. Granting such broad authority to the president has broader implications regarding executive power and cutting out Congress. So, so far the lower courts have struck down the emergency powers argument. So, it's up to the Supreme Court to finally decide.

2:13 Either way, the one thing the Supreme Court has done is given the administration time. Time to develop a workaround or several. And Scott Bessant, among others, has publicly alluded to the fact that there is a plan in place to do exactly that. Several provisions under prior trade acts theoretically allow the administration to re-implement the same tariffs temporarily and then continually reauthorize them. It would be a lot of work, but it's highly likely that this will be successful. The other path would be to work with this incredibly slim congressional majority that Trump enjoys at this moment to authorize tariffs retroactively. Now, this might actually be a lot harder to pull off considering that there are house districts that have really taken the brunt from these tariffs and the farm belt in particular is none too happy. So, if the SCOTUS knocks it down entirely, then US importers even have a case to sue the

3:07 government for a refund. Then this would be a huge loss for the Treasury if they were to succeed. But it's unclear whether or not this is even going to be part of the decision. So, there's a lot to unpack. More on that later when we talk about the new world order that does not include the United States. Okay, so let's expand out from tariffs to look at trade more generally because there was a huge movement in the US balance of trade that the administration is definitely going to tout as a win. The US Census Bureau and the BEA announced that the goods and services deficit was nearly 30 billion in October, which is down from 48 billion in September. So what you see here on the gold vertical lines is that our trade deficit has in fact come down substantially. What I really want you to look at is the divergence of the blue and the red lines at the end of the graph, which we'll come back to later.

3:56 Here's why the Trump administration is going to claim victory on this. Why it is in fact not a victory, and how it ties into the larger theme of US dollar and demand destruction. Donald Trump has long said that he thinks the world is taking advantage of the United States because we're a net importer of goods and services. So in his mind, this is extraction rather than a reflection of the fact that the US economy is based on consumption. Now, it wasn't always this way. So that's why he's trying to force through this reckless tariff regime. Now the downside of negative negative trade balance where we import more than we export is of course that it means that certain US sectors like manufacturing aren't theoretically as competitive but this is a very narrow view. There are goods and services we simply don't provide and so we need to import them.

4:48 Now, to be generous, it is a problem that US trade policy over the past several decades was designed to crush US competitiveness as we move to an increasingly financialized economy. One need look no further than the burnedout industrial areas in the Northeast or the rust belt to see how we have deliberately crushed the US manufacturing base. So, not a good thing. Now, let's allow that the Trump administration sees the problem clearly, even if they've misdiagnosed it and offered the exact wrong prescription. See, tariffs alone cannot fix the problem. As evidenced by the ISM manufacturing data and labor statistics, as you can see by the year-end ISM data release, every input of manufacturing is slowing down except for production, which is listed as growing over the past 2 months, but slower than in the past.

5:40 So every aspect of manufacturing is in contraction and it has been for 10 months in a row. Moreover, the labor data for 2025 bears this out as well because it's estimated that we lost 70,000 manufacturing jobs. So Trump's tariff policy was designed at its core to reinvigorate manufacturing. But absent a national industrial policy and an actual plan, tariffs alone cannot do the job. Now, the last two major developments that set us up for our top story today are maneuvers happening outside of the United States. At the last meeting of the BRICS Alliance in 2025, Brazil handed over the leadership role to India whose representatives unveiled their major initiative for 2026 and beyond, something called the BRICS unit. Now, we've talked about bricks before. We got Brazil, Russia, India, China, South Africa. Indonesia is now a major partner along with countries like Egypt, Ethiopia, Iran, and the UAE. Now,

6:41 the BRICS unit is a digital currency backed 40% by physical gold and 60% by a basket of bricks currencies equally, so that there's diversification. Now, here's where it gets interesting. Each BRICS nation is also independently moving toward digital transactions internally. India's UPI system, unified payments interface, is revolutionizing how money moves inside the world's most populous country. And they just announced in December as well that their UPI technology is going to be leveraged throughout the whole of Ethiopia. Now, it's important to understand these aren't just payment apps. This is fundamental infrastructure and the unit is designed to sit on top of all of them creating unified rails that connect these digital ecosystems together. So here's why this is the most under reportported story in global trade and finance. The bricks is not ready for prime time. So I just want to be clear

7:38 about that. But the priority of the alliance is to make this system operational so it can begin settling transactions among BRICS nations for things like oil. And you can probably see where this is all going. The biggest US superpower is the fact that the global currency of record is the US dollar. If you want to do multinational business and crossber business anywhere in the world, chances are you're using the dollar. There are exclusions to this, but by and large about 80% of global transactions are settled in dollars. More importantly, for our purposes today, this is also true of oil. And we call these petro dollars.

8:18 They're not different from dollars. They're just dollars specifically used to settle oil trades. Now, think about what we just pulled off in Venezuela. without emotion or even shock at the brazen illegality of this maneuver. Venezuelan oil has long been sanctioned by the United States unless Chevron was involved and carved out. Same holds true for Russian oil since the invasion of Ukraine, also for Iran. Now, Venezuela has still managed to sell oil on the global market, but they've had to sell it in alternative currencies and take a heavy discount. So, what this means for us is that dollars aren't being used.

8:55 And the two biggest buyers of Venezuelan crude are India and China, the pillars of the BRICS alliance, with China representing about 80% of the purchases in recent months. You see, the one thing that allows us to maintain our grip on the whole world economy isn't the US military, it's the US dollar. So interesting timing that the largest economy in Latin America and the two largest Asian economies just teamed up to create an alternative settlement mechanism to the US dollar. And that leads us to an even more recent and shocking development. The other development that got relatively little attention in US media was the soontobe ratified Merkaser free trade agreement.

9:38 So this is a highly contentious trade deal between the EU and Latin American trade block that includes Brazil, Argentina Paraguay Uruguay and Bolivia. Now, there have even been protests and push back among agricultural providers in Europe, most vocally in France, who see this as a competitive affront and a potentially harmful step because certain South American countries don't adhere to the same strict environmental and health standards. So, the opposition was so strong that a lot of people thought that it was going to collapse last year, but it was reinvigorated after Trump's invasion and overthrow of Venezuela.

10:15 Now, here's the thing. Think about how significant NAFTA was for us. Think about all the emotion. Those of you old enough to remember the discussions around it, it was a really big deal. And we saw over decades that it had a demonstrable impact on the United States. and not in a good way in terms of our manufacturing base. So free trade agreements like this have big big ramifications and this one has a long-term ramification on the US strangle hold over global trade. So with all of that under our belt now let's look at the kidnapping of Nicholas Maduro and the overthrow of the Venezuelan government through this lens.

10:59 We can't take a chance at somebody else takes over Venezuela that doesn't have the good of the Venezuelan people in mind. Had decades of that. We're not going to let that happen. We're there now. And what people don't understand, but they understand as as I say this, we're there now, but we're going to stay until such time as the prop proper transition can take place. So, we're going to stay until such time as we're going to run it essentially until such time as a proper transition can take place.

11:38 A lot has already been said about the pretense for the kidnapping of Maduro. It's about the oil. We want their minerals. We're gonna steal their Bitcoin. US oil companies want their money back. They have the largest proven reserves in the world. So, we're just going to take the oil, as Trump has said on literally every occasion possible. So, given the Trump administration's naked admission that these were indeed the reasons that we intervened because they seem to drop the whole narotism thing pretty quickly, it's easy to see why these narratives have taken hold.

12:10 But I just don't buy it. And here's why. Most of the negative economic trends that we report on have been long in the making. So over the past several decades, the United States has been on a determined path toward financialization. An economy based on nebulous assets like equities derivatives options puts calls, warrants, and leverage. Lots and lots of leverage. And an economy can run on a financial engine so long as it has access to the fuel that it craves. Dollars. lots and lots of dollars. But what happens when that fuel runs dry? We put up with dictators all over the world and we do business with many of them. We put a lot of them in power. Nicholas Maduro would have been thrilled to let oil flow to the US refineries in the Gulf. And how do I know this? Because during the oil supply slowdown postco, the Biden administration loosened sanctions and allowed Venezuelan oil to flow. Venezuela's intrigence was never

13:11 the issue. Moreover, as has been widely reported, Chevron, an American oil interest, is still doing business there. Everything we're purportedly taking, could have just as easily been purchased, and it wouldn't have cost the United States government a dime. So, I just don't buy these as the chief reasons. This is about fuel, just not the one that everyone's talking about. It's about dollars, petro dollars, to be more specific. the fuel that the financial engine of the United States economy requires. So, as usual, the entire situation, this is all of our own doing. US foreign policy has always been lacking in foresight. And here's what I mean. Sanctioned oil, such as Venezuelan oil, was still being traded on the open market, but it was paid for in alternative currencies like the Chinese yuan or even cryptocurrency. It's one of the reasons that the US dollar has fallen dramatically over the past decade

14:08 as a share of world currency rever reserves. We have weaponized the dollar by sanctioning regimes and force these economies to find alternate distribution and currency conversion paths. So this is a self-inflicted wound. When we print dollars, we don't just give them away, we sell them. And that means that these are also interestbearing dollars. And this is a very good thing for an economy that runs enormous deficits because it means that there's a market for our freshly minted dollars in the open market. But it also means that these dollars come at a cost and these have to be repaid. So if you cut off the number of people who buy them to settle transactions, you sell less of them. Again, I think it's all pretty straightforward, but some analysts have floated the idea that this is a sly foreign policy maneuver to punish China since China purchases 80% of Venezuelan crude. But China has been

15:04 front running heavy sour crude from Venezuela and other states ever since Trump came to power because they saw this coming. In fact, they were so far ahead of the game that the Chinese government has begun converting many of their heavy sour refineries to handle lighter distillates that come from parts of the Middle East. So, if this is the reason, the Trump administration is super late to the party. China has enough heavy sour crude just floating on barges that it can wait out Trump's entire term. Others have speculated that this is a shot across Canada's bow because the vast majority of our refineries in the Gulf are built to manage heavy sour that comes from places like Canada, Mexico, and Venezuela. But Venezuela is a lot closer to the Gulf than the tar sands in Alberta, maybe.

15:55 But again, it's just a lot easier to lift sanctions and let the oil flow than it is to take over a country. So for my money, all roads lead back to money. specifically the dollar. We need petro dollars flowing because we have to refinance $9 trillion in US treasuries in 2026. So I think that this is a message to anyone who's thinking about trading outside of dollar denominated systems because maintaining demand for US dollars is not only imperative for managing our debt, it's what the entire economy is built upon. Manufacturing continues to decline. The labor market is shrinking and a lot of that has to do with our mass deportation regime. Our global reputation is in the toilet. But so long as the world is doing business in dollars, we're in the money. And those dollars flow into US assets like real estate and the stock market and it helps keep these valuations high. So if the demand drops for dollars and the

16:54 cost therefore increases yields, then that money moves to bonds and treasuries and away from the other phantom parts of the economy that are propped up by the volume of dollars in circulation. Of course, there's a tipping point. There's something called the Triffin dilemma. Now, we've spoken about this before. The Triffin dilemma basically posited that the gold peg meant a limited supply of dollars would be subject to supply and demand shocks. Put another way, a bad foreign actor could theoretically manipulate the value of the dollar by hoarding it or liquidating supply. But this whole idea was essentially debunked in 1971 when Nixon pulled us off the dollar peg and allowed the dollar to float. So as long as the floating dollar was the world's reserve currency and demand was unlimited, then the dilemma was solved. All we had to do was maintain good trade relations and foster goodwill. among trading partners. Also,

17:53 everyone needs to have the faith in us that we're going to pay back our debt obligations. And in just under one year, the Trump administration has managed to revive the Triffin dilemma needlessly but deliberately. See, by placing punitive tariffs on every country in the world, we have purposely devalued the dollar. It's down 10% from its high when Trump took office for the second time. Our enormous deficits require the sale of dollars and the lower the value of the dollar, the more we have to sell. This is just a vicious cycle. Kidnapping a foreign leader of a sovereign nation and effectively taking over the country means that we are now a rogue and belligerent nation. So what does this do to trust? This increases the desire of foes and supposed allies alike to find alternative ways to transact. And that also means fewer dollars. So now let's look back at that balance of trade graph because it will resonate even more. The

18:53 administration has managed to largely accomplish its goal of balancing trade by increasing exports and reducing imports. That's the divergence at the end that we talked about earlier. But a deeper look into the exports themselves and the reasons behind this trend should cause panic in the markets. It won't because no one's paying attention, but it should. The number one exported good that increased was gold. Foreign investors increased their purchase of our gold. And the reason that our imports decreased is because the value of the dollar is falling, which makes foreign goods and services more expensive, i.e. inflation. So what this amounts to is the hastening of ddollarization.

19:37 And it didn't have to be this way. It probably would have gotten there eventually, but not within most of our lifetimes. But the Trump administration's overthrow of Venezuela might have been the straw that broke the camel's back, leaving sovereign economies around the globe no other option than to work around the most unreliable partner in the world. If the value of the dollar and the demand for it continued to decline along with our manufacturing base because we have no industrial policy to speak to other than building data centers design themselves to create labor displacing technologies then we're headed towards a path of becoming unremarkable.

20:21 If other countries find ways to trade with one another and cut us out and not use dollars GDP will slow. If major oil producing and oil consuming nations can begin settling trades in bricks units or other non-dollar-based digital currencies rather than petro dollars, we lose even more of that exorbitant privilege. And look, as a long-standing critic of capitalist systems, it's easy for me to be unemotional about all of this. This is the end that the great anti- capitalist theorists always predicted, just not in such spectacular fashion. and at the hands of the person who literally considers himself the avatar of capitalism.

21:05 And in many ways, maybe he is. For the Minestouch Network, I'm Max from UNFR. You can find me on YouTube and Blue Sky UNFR. And make sure to sign up for our free weekly newsletter at UNFR.com. Like this video, subscribe to the Midasouch channel, and I'll see you online. Want to stay plugged in? Become a subscriber to our Substack at midasplus.com. You'll get daily recaps from Ron Philipowski, add free episodes of our podcast, and more exclusive content only available at midasplus.com.

Questions about this episode

Who speaks in "PISSED OFF World DELIVERS FATAL BLOW to U.S. ECONOMY"?

Max (Guest).

What is "PISSED OFF World DELIVERS FATAL BLOW to U.S. ECONOMY" about?

The content discusses the significant impact of recent geopolitical events, particularly the illegal kidnapping of Venezuelan President Nicolas Maduro, on U.S. economic stability and global trade. It highlights the turmoil caused by the Trump administration's unilateral tariffs and their repercussions, including increased inflation and a reevaluation of international alliances, while also…

What is mentioned in this MeidasTouch episode?

3 people, works and ideas are mentioned, including Triffin dilemma, Census Bureau, Merkaser free trade agreement. Each one on this page links to its own page with every episode that mentions it.

How long is "PISSED OFF World DELIVERS FATAL BLOW to U.S. ECONOMY"?

The episode runs 22 min; the transcript is about 3,523 words in 27 timestamped sections.

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