Key Facts: A new era of the dollar is on the horizon with the possibility of Trump winning the presidency. Analysts believe that a weak dollar will undoubtedly impact the economy. Global economics analyst Louis-Vincent Gave said a while ago, “Trump is first and foremost a mercantilist; he clearly wants a weaker US dollar.” Now that statement is being seen as a prediction of what could really happen if the now pro-bitcoin candidate for the US presidency wins the elections next November. Donald Trump has been promising at his rallies that if he returns to the White House next year (his list includes massive import tax increases, a global trade war and an exploding budget deficit), there will be a weaker US dollar, according to reports. Although many are wondering why the Republican candidate seems to think that Would a weakening dollar be beneficial to the US economy?
In an interview with Bloomberg last week, Trump explained why he believes a weak dollar, rather than a strong one as he has previously promoted, will ultimately be beneficial to the U.S. economy. He said the dollar is overvalued compared to currencies used by U.S. trade rivals such as China, Japan and Europe. A weaker dollar would make imports much more expensive for Americans and would make exports from their country much more attractive in global markets.
“The discrepancy, for example, between the dollar and the yen and the dollar and the yuan is incredible. With the dollar high and the other currencies very low, I realized that others fought very hard to keep their currency low. It doesn’t sound good, but from the point of view of what they do and the manufacturing of products, that’s how Japan was built. That’s how China was built. I think we’re in a very bad position.” Donald Trump, candidate for the presidency of the United States.
In summary, A strong dollar makes it difficult to sell American products abroad to buyers with weaker currencies, as they need more money to complete those deals.
A weak dollar favorable for bitcoin?
Trump and his running mate, JD Vance, share the idea of weakening the dollar and this could have a major impact on international trade, increasing the prices of imports. Several analysts have begun to give their opinions on what could happen if Trump wins the presidency. For his part, economist Mark Sobel warned that A weak dollar and higher tariffs may boost inflation. This, coming in response to Trump's proposed high import taxes and tariffs on Chinese imports, raising concerns about their impact on the US economy. Meanwhile, commodity analyst Michael Kao offers a contrary perspective, suggesting that Trump's policies could be deflationary for oil. Kao believes that Trump will reverse Biden's foreign policies in the Middle East, which will contribute to lower oil prices, while weakening the dollar to control inflation. «The fall in oil may be just what the Federal Reserve needs to eventually turn and weaken the dollar, so the direction of causality is reversed, in my humble opinion,» said Kao, who suggested that the possible monetary measure implemented by Trump would help control inflation. So far, Trump has not given any major signals about what he would do to weaken the dollar, but what has happened in the past allows us to visualize what would await the US economy if Trump becomes president. In October 2021 The annual inflation rate was 6.2%, the highest in the United States in 30 yearsas reported by BitcoinDynamic. Two months earlier, Powell had admitted that the Central Bank has created dollars from scratch at an unprecedented rate. The measure responded to the many tools used by the government to rescue the economy in the midst of the coronavirus pandemic. Therefore, in case Trump activates unlimited monetary issuance to weaken the dollar, there will be a greater rapprochement of the population towards bitcoin. This is due to the fact that in times of economic uncertainty, people's response is usually to search for alternatives to secure their economy and there are many who see the potential value of assets such as bitcoin with a transparent and limited supply.