HANG ON: Global USD War, US Panics “China In Depression”, EU to Ban Russian LNG - Are We Done?

Summary

The video script explores the impending financial challenges in 2025, focusing on Scott Besson, the replacement for Janet Yellen as US Treasury Secretary. Besson's policies aim to maintain the US dollar's dominance while pushing for a global tariff war, potentially spiking inflation and economic hardship in the US. It also highlights China's efforts to boost its domestic economy amidst growing tensions and how the EU is struggling with energy costs and sanctions. The script paints a picture of a volatile global economy, with rising trade tensions, inflation, and shifting economic power dynamics.

Takeaways

• 😀 Janet Yellen's replacement, Scott Besson, is expected to further escalate U.S. economic policies and maintain the dominance of the U.S. dollar.
• 😀 Besson advocates using economic sanctions as a strategy to secure the U.S. dollar's position as the global reserve currency, despite the challenges posed by tariffs and trade restrictions.
• 😀 Hedge funds are betting on a stronger U.S. dollar in 2025, with increasing leverage to back up their forecasts on global dollar demand.
• 😀 Besson's goal is to maintain global transactions in USD, especially to sustain demand for U.S. Treasury debt, crucial for funding the nation's debt.
• 😀 The U.S. faces growing pressure as foreign nations, including BRICS countries and even U.S. allies like Japan, reduce their holdings in U.S. debt, posing a risk to dollar stability.
• 😀 The U.S. faces a tough economic situation with rising inflation, a mortgage crisis, and extensive damage from recent disasters, putting even more strain on national finances.
• 😀 Higher tariffs could spark retaliation from other countries, leading to increased inflation and higher costs of living for U.S. families, with some projections suggesting an additional $6,000 in spending per household.
• 😀 Besson's proposed budget cuts to reduce the U.S. deficit could hurt social programs for lower-income Americans, potentially leading to an economic downturn and worsened living standards.
• 😀 Besson's plan to secure a stable bond market by 2028 involves reducing the federal deficit, but such a goal is challenging given the country's reliance on foreign borrowing.
• 😀 While Besson believes China is in a recession, China's economy is showing growth, with a 5% GDP increase, suggesting a complex situation where China remains both strong and weak at the same time.
• 😀 The EU's energy sanctions on Russia and the loss of cheap Russian gas supply are threatening Europe's industrial sector, with countries like France and Spain facing potential economic collapse from these moves.

Q & A

What is Scott Besson’s role in the U.S. economy, and what are his priorities?

Scott Besson, Janet Yellen's replacement, is focused on maintaining the U.S. dollar as the global reserve currency. His key priorities include promoting economic decoupling from China, maintaining global demand for the U.S. dollar, and using economic sanctions as a strategy to ensure U.S. financial dominance.

How does Besson’s approach to economic sanctions differ from previous policies?

Besson advocates for weaponizing the U.S. dollar by using sanctions more aggressively to influence global trade. He wants other countries to conduct all transactions in U.S. dollars to sustain demand for U.S. Treasury bonds and protect the U.S. economy.

What are the potential consequences of Besson’s plan for the U.S. economy?

Besson’s economic policies could lead to higher inflation, increased cost of living, and a strained U.S. household budget. The tariff policies and sanctions may backfire, causing economic challenges like higher interest rates, a credit card crisis, and further government debt.

What role does the U.S. dollar play in Besson's economic strategy?

Besson views the U.S. dollar as central to the U.S. economy’s survival. He wants to ensure that the dollar remains the dominant global currency, as a loss of its reserve status could lead to economic collapse. This requires maintaining global demand for the dollar, especially through sanctions and global trade policies.

Why are hedge funds betting on a stronger U.S. dollar in 2025?

Hedge funds are betting on a stronger U.S. dollar in 2025 due to expectations that U.S. economic policies, particularly under Besson, will drive global demand for dollars. The anticipation of continued U.S. financial strength and Trump's economic policies, such as tariffs, contribute to this outlook.

How does Besson plan to address the U.S. trade deficit and national debt?

Besson aims to reduce the U.S. trade deficit by imposing tariffs on global trade, especially with China, and reducing government spending. His goal is to decrease the federal deficit to just 3% of U.S. GDP by 2028, though achieving this will require significant cuts to social benefits and a successful tariff war.

What are the challenges of reducing the U.S. deficit according to Besson’s plan?

Reducing the deficit faces two major challenges: first, the difficulty of winning a global tariff war, and second, the need for drastic cuts to government programs, which would negatively impact middle and low-income Americans. These cuts would likely reduce living standards, making the plan politically unpopular.

What is the situation in China according to Besson, and how does this affect U.S. economic policy?

Besson believes China is in recession, but he acknowledges that China still has significant resources to invest in infrastructure, including energy projects. This situation presents a contradiction, as China appears both strong and weak, and U.S. economic policy may underestimate China’s ability to recover and compete globally.

How is China responding to economic challenges, and how does this impact global trade?

China is stimulating its domestic economy by offering subsidies for consumer goods and promoting the purchase of electric vehicles. This response boosts domestic spending, which helps shield China from the effects of U.S. tariffs. As a result, China's economic influence continues to grow, which may undermine the effectiveness of U.S. trade policies.

How are the EU's energy policies affecting its economy?

The EU’s energy policies, especially sanctions on Russian energy, are exacerbating economic challenges. With the loss of cheap Russian gas, the EU faces higher energy costs, which hurt its industrial sectors and weaken its global competitiveness. These policies are seen as self-punishing, benefiting the U.S. and China more than Europe itself.