Upcoming: Changes in the U.S. and World Order Under the Trump Administration

Author: Ray Dalio

Translation by: Block Unicorn

 

Now, with Trump’s right-wing team achieving a decisive victory in the election over Harris’s left-wing platform, the nightmare scenario of a contested election due to a narrow Trump loss has been averted. With some key appointments already announced, a possible scenario is beginning to take shape. Let me be clear: the picture I am painting is intended to reflect the situation as accurately as possible, without bias toward good or bad, as accuracy is critical to making the best decisions.

 

Here is the current state as I see it:

 

A Massive Overhaul for Government Efficiency

A large-scale restructuring aimed at enhancing governmental efficiency, which will spark internal political battles to turn this vision into reality.

 

An “America First” Foreign Policy

External preparations for potential conflict with China, viewed as the greatest threat to the U.S. This approach has parallels to the actions of some nations in the 1930s. Trump is selecting individuals to assist in achieving these goals, including Elon Musk and Vivek Ramaswamy, who will head the proposed Department of Government Efficiency; Matt Gaetz, set to become Attorney General (pending Senate approval), to delineate the legal boundaries of this new governance order; RFK Jr., who will overhaul the healthcare system as Secretary of Health and Human Services; Marco Rubio as Secretary of State; Tulsi Gabbard as Director of National Intelligence; and Pete Hegseth as Secretary of Defense, tasked with leading the fight against foreign adversaries.

 

Furthermore, numerous other figures—some internal to the government and others external advisors, such as Tucker Carlson, Steve Bannon, and members of Trump’s family—will join Trump in executing this mission. They are “victory at all costs” advocates loyal to their leader and the mission. Their goal is to dismantle the so-called “deep state” and replace it with a new domestic order they believe will maximize economic power and combat foreign enemies.

 

Once these individuals are in place, this appointment strategy will likely extend to removing those accused of being part of the “deep state”—those deemed unsupportive or disloyal to the mission. This purge will span across various parts of the government system, including traditionally less politically or ideologically controlled institutions such as the military, Department of Justice, FBI, SEC, Federal Reserve, FDA, CDC, DHS, and Interior Department, as well as federal employees classified as “Schedule F” (a designation Trump hopes to reinstate to eliminate civil service protections for certain government positions). Nearly every position that a president can control, in collaboration with a Republican-controlled Senate, House, and Department of Justice, will be filled with individuals aligned with Trump’s goals for a new domestic order.

 

Throughout this process, nearly everyone inside and outside the government will be seen as either an ally or an enemy, and all the powers at Trump and his allies’ disposal will be used to combat those obstructing reforms. These actions are almost certain to have a significant impact on changes in both U.S. and global order. What might these changes look like?

 

Shifts in the American Order

It is now clear that Trump and his team will reform the government and nation as corporate raiders do with inefficient companies—through personnel changes, massive cost cuts, and the introduction of new technologies. This transformation evokes the perspective conveyed in Gordon Gekko’s “greed is good” speech but applies it to a U.S. president addressing the federal government and, by extension, the entire nation.

 

As previously noted, the most similar historical example is the extreme right-wing governments of the 1930s. To clarify, I am not suggesting Trump or his administration are fascists or will act like fascist leaders in many ways. Instead, understanding those now in charge and their nationalist, protectionist, top-down government-led economic and social policies—along with their lower tolerance for internal dissent and involvement in international great-power conflicts—can be informed by examining the actions of nations with similar policies in the 1930s.

 

Economic reforms are likely to include industrial policies aimed at improving productivity and efficiency, with less focus on issues such as environmental protection, climate change mitigation, poverty alleviation, or fostering diversity, equity, and inclusion. Certain critical areas, such as education and debt management (which Democrats might also neglect), may be overlooked.

 

During Trump’s partnership with Musk, they will become the primary architects and executors of the new American order. Whereas these entities were previously constrained in many ways, they will now operate more freely, unencumbered by government restrictions.

 

These policies will benefit financial intermediaries, banks, and asset managers significantly due to loosened capital controls and pressures on the Federal Reserve to make monetary policy more accommodative, granting them more freedom, funds, and credit. The policies will also favor Trump-supporting technology companies, allowing them to grow and operate largely unrestricted. Lawyers, too, will benefit from increased activity.

 

Plans are already underway to achieve more during Trump’s administration than during a Democratic one. Additionally, AI regulation will be relaxed, while tariffs will be used to increase tax revenue and protect domestic producers. If the Federal Reserve continues to insist on lowering interest rates (though I believe it shouldn’t), this will also redirect vast amounts of money parked in money market funds and other deposits into other markets, stimulating the economy and markets.

 

Changes in the International Order

The international order will transition from:

a) The existing fractured system created by the U.S. and its allies after WWII, based on universally accepted standards of behavior, rules, and governance institutions like the UN, WTO, International Court of Justice, IMF, and World Bank.

b) A more fragmented world order where the U.S. pursues an “America First” policy, clearly defining allies, adversaries, and non-aligned nations, as economic and geopolitical conflicts intensify over the next decade, with an increased likelihood of military wars.

 

In short, the era of U.S.-led multilateral cooperation is ending, replaced by a more self-interest-driven, survival-of-the-fittest system dominated by two major players: the U.S. and China.

 

This shift will reduce the global importance of U.S.-promoted moral and ethical standards, as the U.S. will no longer be the global leader championing and enforcing these principles. Alliances and adversaries will be chosen based more on strategic considerations, such as achievable deals.

 

The full article can be found at Foresight News:

https://foresightnews.pro/article/detail/72556

AIC Team
2024/12/2