“The fabric of American empire ought to rest on the solid basis of THE CONSENT OF THE PEOPLE. The streams of national power ought to flow from that pure, original fountain of all legitimate authority.”
-Alexander Hamilton
July 17, 2025 — Last week brought more than the usual ration of surprise. It was a week of marvels, and the first miracle performed by a public figure since Moses parted the waters of the Red Sea.
First the marvels. We had thought the trade wars were happily resting in their graves. But last week, they rose up again…ghoulish and ghastly.
After the ‘reciprocal’ tariff program was abandoned, the administration’s top quack economist, Peter Navarro, had promised ‘90 deals in 90 days.’ And so, the trade negotiators went to work. But after three months, there were only three deals done. One of them was with the UK, with which we had a trade surplus…and the other two — with China and Vietnam — are fishy and probably won’t stick.
Perhaps frustrated by the lack of progress, the US president first lashed out at Japan and Korea. The Irish Star:
Donald Trump renews global trade war with shocking 25% tariffs on Japan and South Korea
Then the trade war salvos came so hot and heavy, the press could barely keep up. USA Today:
President Donald Trump…threatened up to 200% tariffs on pharmaceuticals and slapped a 50% tariff on copper imports that sent copper prices soaring to an all-time high.
CBS took the next one:
Trump threatens 35% tariff against Canada
And then NBC:
Trump says he will hit E.U. and Mexico with 30% tariff
The oddest of the tariff threats had nothing to do with trade, but with Brazil’s internal politics. New to the annals of ‘trade war’ history, the US president is now using the threat of tariffs to influence internal politics in other sovereign nations. CNN:
Trump threatens 50% tariffs on Brazil if it doesn’t stop the Bolsonaro ‘witch hunt’ trial
In between the waves of tariff assaults, came another marvel. Back in May, the president was calling for a 1% cut in the Fed’s key lending rate. On Wednesday of last week, the demand got multiplied by three:
“Our Fed Rate is AT LEAST 3 Points too high. “Too Late” is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs. No Inflation, COMPANIES POURING INTO AMERICA. “The hottest Country in the World!” LOWER THE RATE!!!” Trump wrote on Truth Social.
In other words, POTUS says a rate cut of ‘three points’ — or 3% — would save the US more than a trillion dollars in interest. Just like that. But if you cut the yield on T-bonds by 75%…who would buy them? Nobody.
The Fed would have to ‘print’ the money…US bonds and the dollar would crash…sending the US into the long-awaited credit crisis, chaos and recession.
But the week was still not over. And as remarkable as it was to befoul the US economy with trade barriers and very fake interest rates, the most remarkable thing was still to come.
We only bring it up because it suggests that the empire really has entered a dark, degenerate phase typical of a declining empire.
Pam Bondi is America’s top cop — the Attorney General. And just a couple weeks ago she had the most explosive criminal document in the nation’s history, “right on my desk,” she said. It was a ‘client list’ from a notorious pedophile whose friends (with whom he apparently shared his underaged girls) included some of the richest, most powerful people in the world — including Bill Clinton, Bill Gates, Prince Andrew, and (his best friend for several years) Donald Trump.
We don’t know where she stands on flying saucers or the virgin birth, but when Ms. Bondi tells us that something that important was ‘on her desk,’ we assume she would guard it with her life. But at the close of last week, she swore didn’t have the ‘file’…and that she wasn’t going to look for it…because it never existed. It was a miracle; the whole thing just de-materialized.
In logic, it’s called the ‘principle of noncontradiction (PNC).’ A proposition cannot be both true and not true at the same time. It couldn’t both be there and not be there.
What then had been ‘on her desk?’ Maybe it wasn’t really a document that incriminated some of America’s richest and most powerful citizens, who were now subject to blackmail. Maybe it was just her shopping list — two heads of lettuce and a six pack. Anyone could make that mistake — mixing up a document that could blow up dozens of illustrious careers and shake faith in the international elite — with a grocery list.
So, you can’t blame Ms. Bondi. And the press has decided that it doesn’t matter who was on that list anyway; it’s really just another inside politics story. Donald Trump:
What’s going on with my ‘boys’ and, in some cases, ‘gals?’ They’re all going after Attorney General Pam Bondi, who is doing a FANTASTIC JOB!”
But wait. Ms. Ghislaine Maxwell is presently walking around a track, behind a chain-link fence in a federal prison in Florida. Assuming she does her time as ordered, and she keeps up with her exercise program, she’ll go around the track approximately 6,500 more times before they let her out. Her crime was ‘sex trafficking of underage girls.’ And the question ‘the list’ was supposed to answer was: to whom were these girls trafficked? Who was on the other side of the trade?
The press doesn’t want to ask. And the Deep State — now garrisoned by Bondi, Patel, et al — won’t say. But if the customers never really existed, why is Ms. Maxwell (daughter of suspected Israeli spy, Robert Maxwell) doing laps in Tallahassee?
Bill Bonner
Bonner Private Partners and Grey Swan Investment Fraternity
P.S. from Andrew: In 16 years of working in this industry, the focus has shifted from talking about the economy, to a focus on stock picks, to a focus on options trades, and finally crypto opportunities.
The work we provide at the Grey Swan Investment Fraternity brings the focus back to the economy – the signal that matters – and the signal that will make a big difference in your wealth as America’s empire continues down a path to unravel.
Echoing that theme, reader Basil writes in regarding yesterday’s commentary on the need to end the Federal Reserve, given its history of failure and policies which are squeezing out America’s once-great middle class:
Still out here reading.
Thanks to Andrew for his, usual, pithy un-packing.
Indeed, the Federal Reserve is neither. Nothing more than a group of “bankstas” with their own gangster self-interests in mind.
Clever naming that night there in 1913 on Jekyll island. (Can”t make this stuff up if you tried.)
Deserves the wrecking ball. Problem is, they cloned themselves all around the world. Every country has a “central bank.”
But, I guess you have to start somewhere and ours would be as good a place.
Again, thanks.
Thanks for the positive feedback, Basil!
Unfortunately, the Fed isn’t done yet.
As much as we’d love to live in a world where we could make investment decisions without having to think about how the central bank would react (flood the system with money if there’s a problem), it’s very much a problem.
It’s likely to get worse as America’s financial empire reaches its breaking point in the years ahead. Until that happens, financial markets will likely trend higher until a crisis hits.
Your thoughts? Please send them here: addison@greyswanfraternity.com
