GLOBALIZATION IS DYING

There is little question that the new U.S. tariff policy will hurt some countries around the world. Not to sound harsh, but that's their problem. Trump's job is to make America great again. President Xi's job is to make China great again. Chancellor-in-waiting Merz's job is to make Germany great again. James Rickards says that the U.S. cannot carry the world on its back.

- James Rickards

With so much attention focused on U.S. stock markets, it seems timely to pivot away from stocks for the moment and consider the global perspective. Globalization may be dying in terms of trade and supply chains, but financial markets are inextricably linked in ways that relatively few understand.

King Dollar Still Rules

The dollar still dominates the global financial system despite the cracks in the foundation and the valid criticisms. If there's a dollar problem in Eurodollar banks, it's sure to echo from Tokyo to Shanghai and New York. And problems in those locales affect everything else.

I've just returned from separate visits to India, Japan and Jekyll Island, Georgia. India has the largest population in the world, has the fifth largest economy, is a nuclear power and a key member of BRICS. Japan is the fourth largest economy in the world and is a key geopolitical ally of the United States in its faceoff with China. Jekyll Island is a lovely ocean resort but is best known as the site of a secret meeting in 1910 where the Morgan, Rockefeller and Warburg interests dreamed up the Federal Reserve System.

I continually urge people to get away from their desks, stop staring at screens and go out and talk to real people. There's no substitute for walking the streets around the world (including the poorest areas) if you really want to know what's going on.

While India, Japan and Jekyll Island could hardly be more diverse and geographically scattered, they share a common thread. It's their economic linkage through the U.S. dollar. The following are some impressions I gathered during these visits that reflect the volatile situation facing markets today.

A Reasonable Response to Tariffs