The unexpected triumph of Trump also produced some surprising reactions in the "market"[1].This was manifest in part in the fact that investors assumed greater risks in their purchase of stocks instead of bonds and in the purchase of dollars, selling off other currencies and even gold. This behavior has occurred because the recently elected president has stated that he will undertake policies of investment in infrastructure and will apply tax cuts to strengthen production. If he follows this plan, it will lead to greater budget deficits and higher interest rates in the United States of America.

The global aspect of the re-calibration of the "markets" centers on the temptation to invest in dollars at the expense of the euro and the yen, since both are bogged down with low interest rates, or even negative ones. Capital flows obviously favor the dollar that has gained on the market at the expense of the euro and the yen. This could mean a new severe bank crisis in the European Union and its eventual entry into a process that would weaken its strategic unity, a fact that would signify an air of triumph for global financial capital, if the route is the disintegration of the European Union, depending on how the EU crisis is resolved. We must recall their recent defeat in the US elections (since their candidate was Clinton) and in the Brexit[2] in Great Britain. It is clear that financial globalism has been further weakened in the USA, now with the loss of executive power, and it had already lost the legislative and judicial powers, and was never dominant in the internal market or in the Pentagon. Although their dominance continues in the world market. But the EU, as such, continues to have stronger options of articulation with the multipolarism of the BRICS, together with China-Russia-India, etc. Nevertheless it could be under pressure from the USA that attempts to strengthen itself through its continentalism[3].

But global financial capital will not stay quiet in the USA; the Federal Reserve (FED) has already increased interest rates days after the Trump victory. The FED believes that this is the time to increase interest rates, announcing three increases for 2017 and projecting another three, both in 2018 and 2019. We should recall how the announcements of the FED operated under its former president Ben Bernanke, in June 2013, on the decision to increase the rates from 0,25% to 2.5%, producing the first great global financial run with a brutal exit of investments from emerging economies towards positions with better expectations. A fact that produced a slowdown of emerging economies from 5% to 1% with China from 7,8% to 4%[4].

Many Americans are hoping for Trump's economic miracle, but the fact is that the Federal Reserve will not be under his control until the second half of 2018; it's pro-Clinton globalists who will continue to have control and strong power in the Fed[5], to be able to set the interest rates. Therefore it would not be surprising if the new president, sooner rather than later, makes the political endeavor to put the Federal Reserve out of play, leaving their essential functions to the Treasury Department[6]. Otherwise they would have to wait until the second half of 2018, which may already be too late[7].

The Board of Governors of the Federal Reserve consists of seven seats. Two of them have been vacant since 2014, when Obama named two new Governors who were rejected by the Republican-dominated Senate. The five Governors in place are all bankers with training in banking or law. The period of the President, Janet Yellen, ends on February 3, 2018 and the Vicepresident Stanley Fisher could stay in place until 2020. The custom is that both retire in 2018 and that Trump would be able –so he says-, in this case, to name people that express the interests of the business, industrial, commercial and agricultural sector. This implies that from now until early 2018, there will be an intense struggle between globalized financial neoliberalism, versus neoconservative financial continentalism and US industrial nationalism; and if the globalists want to cause a financial collapse in order to weaken D. Trump, they must do so as soon as possible, during 2017 or the beginnings of 2018[8].

It is clear that as the FED increases the interest rates, there will be an increase in the quantity of dollars destined to service the US debt that already stands at 14 trillion dollars. The interest payments will be the part of the Federal Government budget that will grow most rapidly with the increase in interest rates. It is obvious that the globalists have a plan to weaken D. Trump and provoke the collapse of the US economy, and that they are carrying this out ever since Trump won the elections in November 2016, based on: the announcements that the FED would increase interest rates, the moves to prevent Trump from obtaining the 270 electors in the twenty electoral colleges on December 19 2016, the mobilization of youth via the media in the big urban centres, following the denouncements of the interference Russian hackers, etc.

In the economic arena, with the announcement of a plan of strong increases in interest rates that will tend to provoke a collapse, they will do the impossible through the mainstream media corporations under their dominion to make Trump and his economic and political supporters look responsible, since a collapse is a process and not an event. The banking collapse or crack would without doubt imply a "bail-in", a bank freeze reducing or practically eliminating cash in order to take control over the entire population through their bank accounts, a fact that would directly affect all persons with money in the banks[9]. 

The plan of the globalists is oriented to putting an end to the dollar as the international currency of reference and such a collapse would strongly limit the influence of the dollar in the international market. Thus the value of the new dollar would no longer be controlled by the Federal reserve, that would probably have to yield this role to the International Monetary Fund (IMF) and the dollar would lose much of its present buying power, through processes of devaluation and inflation.

Meanwhile D.Trump and his supporters from neoconservative financial continentalism and from industrialist nationalism will also have to increase the interest rate to attract world credit, to orient the flow of speculative capital of the great bubble towards the USA, and from speculation to production that includes the return of the investments of the TNCs[10]¸ in order to finance their plan to reindustrialize the USA and reposition it as a world industrial power, with the aim of strategically confronting the globalists and the industrial multipolarism of the BRICS. 

The question is whether the globalists will succeed in imputing the responsibility to Trump and his policies, or whether, on the contrary, the general public will see clearly that it is the globalist financial elites who control the hand that rocks the cradle of the crisis. In that case, the panorama might even open up for a systemic alternative[11]. 

17/01/2017

(Translated for ALAI by Jordan Bishop)

The above is the introduction of a longer article, published in Spanish at: http://www.alainet.org/es/articulo/182912

- Wim Dierckxsens, sociologist andeconomist, of Dutch origin, based in Costa Rica.

- Walter Formento, Sociologist at UBA, profesor at the Universidad de la Plata (Argentina)