President Donald Trump wants to be a modern ‘Stupor Mundi or wonder of the world. The last ‘stupor mundi’ was the celebrated German Holy Roman Emperor and crusader, Federick II, known as ‘Barbarossa.’
It appears that President Trump seems determined to become the most important and commented upon person on earth. So far, he has succeeded brilliantly. So far, that is. As of this writing, Trump’s tariff crusade has become a debacle, making him and the United States the objects of hatred and fury around the plant – except for farm regions in the US and among Israel’s supporters. Now even the farmers in the Dakotas are mad as hornets at the president from Queens, New York for wrecking the soya bean market with new tariffs.
To many professional money men, it appears that Trump’s Russian roulette with tariffs threatens to bring a serious recession or worse. One of America’s smartest, most successful money managers, Ray Dalio, just warned that Trump’s on-again, off-again tariff proclamations and other economic policies threaten an eventual global meltdown. Dalio is a noted financial pessimist, but we are unwise to ignore his jeremiads now that America is up to its ears in too much debt.
As a historian, my mind goes quickly back to another financial miracle-worker, the infamous Scot, John Philip Law. He was a gambler who somehow convinced the bankrupt French king Louis XIV to replace gold coins with new paper money. Law created a paper company, the Mississippi Company, that was supposed to mind vast caches of gold.
Law became the richest man in Europe.
In 1720, Law’s company collapsed when it was unable to pay out gold for paper money. He fled to Venice. French state finances have never been the same since. Two other major get rich fast financial scams followed: the South Sea Island fraud and the great Tulip disaster.
We may be seeing a modern version of the Great Mississippi financial fiasco as scoundrels get their hands on the levers of state finance. Trump’s goals in his tariff jihad may be legit – to make America very rich for a short while before the rest of the world gangs up on the unloved USA.
But Trump’s methodology has been calamitous. He and his minions have ignited a worldwide panic, damaged US allies, enraged much of the globe and caused massive damage to world finance and business. And for what? To make President Trump the Stupor Mundi of the moment. Ego on steroids.
What all this betokens is the opening salvo of a coming US-China war. The 17th and 18th century trade wars offer ample evidence of how trade rivalries lead to wars. We are doing it again. We are wildly unwise to revert to the mercantilism of past eras during the nuclear era.
Even at the very end of his life, King Louis XIV knew his warlike, mercantilist policies were wrong. He urged his successor, Louis XV, to eschew expensive wars and to study peace. Young Louis followed this excellent advice and devoted himself to conquests of the boudoir.
Reprinted with permission from EricMargolis.com
