I don’t think Trump wants to withdraw from the globe. Currency outlooks should reflect this.

Calling Trump’s bluff …

European and British banks have been and still are collateralizing Africa and Asia for centuries. Since the mid 1940s, the United States has been providing the military and mercenary duties necessary for protecting European and British extraction of resources from these areas of the world.

(Ready to step up your trading game? Visit https://traderswithedge.com/?r=348.)

Publicized efforts on the part of countries such as Mali, Niger, and Burkina Faso evidences a slip in European ability to collateralize the aforementioned areas of the globe. The United States has been threatening to pull out of military alliances with Europe and to eat away at income from trade received by Europe from the United States by increasing tariffs on Europe.

But is this a Trump bluff? Mr. Trump asserts that he wants fairer trade and that by imposing tariffs he seeks to encourage American and foreign producers to build factories here in the United States. But Mr. Trump may be having visions of a Queens, New York of the 1950s where some New Yorkers toted lunch buckets to work and ground out 12-hour shifts on a production line. These days the only lines seeing production are lines of computer code and even that activity is under severe threat from artificially intelligent digital agents that can do the work faster, cheaper, and allegedly more accurately.

America makes its coin off of paper, not the sweat that pours out of the American blue-collar worker. I believe Mr. Trump is an agent for the merchant faction, not necessarily a mercantilist policy. When I say merchant faction, I am including traders, merchant banks, and prime brokers; those who live off of the spread. America is rich in resources as well and the merchant class wants to see the US and other areas of the globe generate optimal yields on those resources.

Is America desiring to be the manufacturing nation that supplies the rest of the planet? Can it rely on a resource-rich South America to be the consumer of last resort for American goods and services? Did not America liberate itself from England when it played manufacturer to Britain’s metropole?

I believe traders and prime brokers prefer to see these regions compete with each other; to see the animal spirits in Africa, Asia, North America, and Central/South America create and market high yield generating products.

The new currency world order …

I see the new world order giving attention to these currencies because of the commodities that underlie them:

Angolan Kwanza (AOA)

Nigeria Naira (NGN)

South African Rand (ZAR)

Ghanaian New Cedi (GHS)

Other than the old investment, ethnic and cultural ties between the United States and the Anglosphere, I never saw the reason for the major de-emphasis the U.S. places on emerging market currencies. Then again, infrastructure and rule of law in these non-Anglo countries are legitimate concerns. But America’s Anglo pals trade for the resources in Africa and Asia and if the relationships between the Anglosphere, Asia, and Africa deteriorate ala BRICS, then the US will have less reason to see Europe as a trading partner. Heck. The US dollar would strengthen against European currencies as the allure of European currencies fades.

The takeaway: Trump’s mercantilist bona fides are fake and he is bluffing deglobalization.

Alton Drew

24 May 2025

DISCLAIMER: I am not a financial adviser. These blog posts are for educational purposes only. Trading of any kind involves risk. Your trading decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary.

LEGAL ANALYSIS: For an analysis of the legal or regulatory environment surrounding the events described in this post, contact me at altondrew@altondrew.com to set an appointment.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase.