❓🧠Trump's Globofeudalist Empire

04 Apr, 2025

Part One: Some Basics

(Skip if you have some basic understanding of international trade dynamics)

Let's imagine two countries outside of the American system: Germany and Italy.

Let's imagine they each have their own currencies, they are not using the Euro in this analogy.

Germany has the Deutsche Mark and Italy has the Lira.

Germany has a strong industrial system, and exports many cars which you have to buy in Deutsche Marks.

Italians import these nicer, reliable cars but over time they buy too many and this means they want many Deutsche Marks to buy them with.

The demand for Deutsche Marks goes up, so the Deutsche Mark raises in value in comparison to the Lira.

Now it's very expensive to buy German cars with Italian currency, and eventually you hit a tipping point where Italians can only buy Italian cars with Lira, so they switch from buying BMWs to buying Alfa Romeos.

Similarly, Germans now realise that they can buy BMWs with their own currency, or they can import very cheap cars from Italy because their currency is so much stronger.

So now there is plenty of demand for Italian cars from both Italians and Germans, and the currency resettles into equilibrium experiencing pressure in both directions.

This is how macroeconomics should remain in rough equilibrium even when two countries have very different manufacturing capabilities.

This is great because it also means if Italians take loans from German banks in order to buy cars in bulk, the costs of those debts can be altered depending on how much currency you print, so you can escape debt by causing inflation on purpose, which is another mechanism of control for a country.

Now let's replace Germany with America.

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Part Two: Why America works Differently

America has another interesting feature, which is that it is the world's reserve currency, and that means that because everyone holds the dollar (for many reasons, including reserve currencies, the ubiquity of the petrodollar and global contracting), there is essentially an endless demand for the dollar and the strength of the dollar doesn't drop even when not many people are buying American goods with American dollars.

So now we have the same dynamic, except the Americans buying Italian cars never find those cars too expensive because their currency is held at the same level, but Italians gradually find themselves priced out of American goods markets. So Americans can buy very cheap Italian goods but Italians can't buy American goods. This reduces demands on American goods and so American companies benefit from moving those goods overseas to cut costs because they're importing anyway - they may as well own the companies importing to America. Now Americans own the profits of the Italian businesses, and they're using cheaper Italian labour to make cars, and America doesn't need to manufacture it's own cars, so it begins to deindustrialize even as its economy grows. All this spare wealth in America can't be invested in goods production, so where does it go? Generally the purchasing of appreciable assets like stock buybacks or housing.

This is good for a while but because so little of the "real economy" begins to exist in America, the buying power of the american consumer starts to drop lower and lower especially when it comes to buying stuff in America like housing. So they get priced out of critical local assets and goods they need to buy, but they can still buy cheaply manufactured crap from overseas. The American consumer continues to apply consumer demand globally despite the inability to pay rents or purchase property in their own country.

American companies and the government massively benefit from the spending power of the US reserve dollar, so they don't want to give that up, but they also want to prevent deindustrialization in order to stop Americans losing jobs, and they want to make foreign goods less competitive to achieve that, so what can they do.

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Part Three: Trump's Plan

Well what if America could have control over the currency on BOTH sides of the trade - they keep the Italian Lira nice and high so Italians are in a position to buy American goods, which will reduce demand on Italian industry from America because now it's not as cheap to import Italian goods. This rebalances the trade equation in a way that reduces the trade deficit to Italy.

People who already hold wealth have the currency of that existing wealth improve, so inequality is worsened and speculative markets get a boost. Italy loses control over its own economic conditions so if it ends up in debt it wont be able to devalue its currency to get out of it, so it'll likely end up in debts it can't leave, a bit like it did with the Euro in the financial crisis.¹

It boils down to this, what if America just decided what the goods they interacted with globally should cost - killed the free market mechanisms that drive macroeconomic behaviours? If you embrace their dominance you will become a vassal state with favourable terms serving a US global fiefdom. Your aristocratic capital and finance class will be richly rewarded for the deepening exploitation of their serf class.

The transition from Capital to Technofeudalism to American Globofeudalism.

Strangely enough America is taking some notes from the European Union when it comes to centralising currency manipulation to benefit the largest global corporations at the expense of labour markets in local economies - no longer able to benefit from the weakening of their own currencies. America would like the benefits of both sides of the coin - a weaker (relatively) American currency that makes it easier to purchase American goods, without any loss of spending power. This will likely make it easier for rich people to purchase foreign goods, and harder for poor people to purchase foreign goods. This keeps more money in the hands of the rich, who will continue to purchase assets like stocks and housing.

The gambit the Trump administration is making overall then is:

1. By increasing domestic demand for goods (Like the Italians buying Italian cars) they can reindustrialize some portion of their economy and rebuild some portion of their "real" economy.
2. By increasing the spending power of foreign markets by keeping their currency high, they will increase foreign demands on American goods, which will be cheaper.
3. By controlling other countries economic policies, they can do things like increase wages in foreign states, which will make manufacturing there more expensive while increasing consumer spend power of those countries. This is essentially the vassalization of foreign states in service to America.
4. It holds enough economic authority today that it can essentially use insane tariffs as leverage to dominate other countries until they concede to America, and no other alternative economic system is in place to resist this. This might genuinely be the crucial mistake they've made as a result of their American Superiority blindspot. They aren't held in very high regard globally at the moment backlash may be a very popular sentiment.

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Part Four: 🧠 Speculations & Predictions

There's a lot of issues with this, it implies the non-existence of extremely parasitic capital and financial systems that primarily reside in the American economy. Foreign states enact tariffs on American companies in part because American corporations are so adept at exploitation that these invading monsters need to be fended off from nascent foreign industries. Unfortunately for America, the monster is already inside the house.

Without colossal state intervention (Perhaps a MAGA re-orientation of Lina Khan's excellent work) this is unlikely to occur, but if it does it will mirror China's state capitalist methods of intervention. We would then see countries like the UK becoming willing vassal states for foreign investment similar to the China-Hong Kong relationship today. This means significant investment in UK assets (similar to Hong Kong, land is at a premium in London and makes for an excellent investment vehicle) which will likely price out the UK consumer and result in American profit extraction from UK assets. Excellent news for people holding UK assets and wealth today, possibly good news for the UK government if they can capture that wealth for itself to end austerity.

I am beginning to suspect that Starmer's eagerness to pursue this plan might be why after their backroom conversations, Trump suddenly granted many concessions favorable to Starmer's position. If I'm even more pessimistic and speculative, some of these cuts to UK welfare (Like the drop in disability benefit) could be a framing device to make the British people very aware of the desperate situation they're in, before selling an American relationship as the cure.

So there are some potential outcomes here:

"Nothing Ever Happens"

The Global economy bears down, divests from the US Dollar, refuses to engage in long term dealmaking with an entity as chaotic as the Trump administration and nothing really changes except the loss of American hegemonic economic power as countries build new economic relationships to weather the storm.

"The Good Ending"

This is the big one they might be aiming for and it could even be The Good Ending. American economic power is locally incentivised to improve to working conditions of everyone else in the world. If everyone in the world has higher wages, then their manufacturing is more comparatively expensive relative to American industry AND they have more spending power to purchase American goods. This would result in a massive upheaval of American manufacturing companies that have relied heavily on outsourcing, profits would probably drop and a greater share of global income would be in households rather than corporations.

This kind of explains the moral basis for these insane tariffs. It could honestly make the world a better place, in theory.

I think in practice American industry is too powerful and will oppose it, raising prices to punish the Trump administration with a view to waiting out this attempted transition away from the economic world order that burned them. This will likely be highlighted heavily by the MAGA movement and used as further evidence that a stronger state is necessary to bring American corporations to heel, which potentially opens the door for state interventionist policies either way. I suspect this is Steve Bannon's gameplan.

The man has made clear he continues to hate oligarchs like Musk, and with Musk moving back to his industry (and probably benefitting in some respects from this change, being an American manufacturer) this could be the economic shift.

This is obviously a complex plan with many moving parts and many opportunities for foreign powers or large global corporations to intervene and sabotage it. That sabotage will likely further fuel a desire for change that the MAGA movement can exploit to further its aims of dominating the American landscape and furthering American global interests.

My predictions are as follows: This will further schism America and Europe, the UK will vassalize, China and Europe will strengthen economic relations, America will strengthen relations with Russia and we'll begin the next phase of the global order:

The Great SinoEuropean / RussoAmerican Conflict.

"SinoEurope vs RussoAmerica"

Some countries like the UK cave and accept vassalage in exchange for desperately needed capital investment. Inequality rises but the UK government makes their own gamble that the injection of wealth can be used to end austerity and restore services like welfare and healthcare. Assets become yet more unattainable and space becomes ever more divided until we end up in a Japan/Hong Kong housing situation where people do have space to live and some economic stability, but very little space and very precarious economic stability.

Other markets like Europe begin to divest militarily and economically from America and strengthen relationships with the only other economic superpower - China. America essentially shoots itself in the foot and ends up in a weaker position. They resolve or gloss over their differences in humanistic principles and perhaps trade moral cachet and legitimacy to China (perhaps coming with some concessions like the end of the Uyghur genocide) in exchange for Chinese goods, technology and investment. America will look to its strongest relationships, possibly its nascent one with Russia (Having already squandered much of its potential relationships with South America, Africa) and there will be a reshuffle of superpowers. America/Russia/India/MEA vs Europe/China/Africa/South America.²

America finds its new connection to Russia very compelling, they share oligarchical illiberal antimodernism, they have a monumental combined energy dominance and Russia will be coming out of a costly war as an isolated wounded bear weakly positioned against Europe and China with dire need of investment - they are also both extremely proficient in the application of modern technocapital and information warfare. Russia will enable America to position more favorably against China for military conflicts, and America will reduce the power of NATO allowing further Russian expansion into Europe in consequence for Europe refusing to vassalize to America. The American Navy rules the seas, working with Russia to maintain the Arctic shipping corridor to extract wealth, while RussoAmerican propaganda suppresses foreign populations with information warfare, soft power and wealth extraction.

But then I'm a pessimist.

Footnotes