There are nay number of narratives being floated across the media spectrum, but the one most glaring is that Trump's tariffs will raise the price of everything from washing machines to denim jeans, though there's evidence that will not necessarily be the case. More on that below.
Here are a few of the more prominent voices opining on the intent and the impact of Trump's across-the-board import tariffs.
The most prescient posts explaining the tariff scenario are by former CIA Intel Analyst Larry Johnson at Sonar21, and Simplicious, the Thinker on Substack. Both are free, not behind paywalls and deliver somewhat the same message, that the tariffs aren't really about evening out the massive U.S. trade imbalance, but re-orienting the U.S. balance sheet, with an eye toward lowering interest rates on some of the $36+ trillion in U.S. debt obligations.
The Simplicious article links to Stephen Miram's text, A User's Guide to Restructuring the Global Trading System [PDF], making the claim that Trump's tariff plan mirrors Miram's "Guide", especially in terms of deliberately devaluing the U.S. dollar, prompting more companies to re-locate manufacturing facilities in the United States.
Those objectives seem to be the major thrust of Trump's tariffs, and, if he's right, will accomplish both. Reducing the interest burden on outstanding debt while simultaneously promoting the USA as the place to be in the re-ordered global trading complex would be a masterstroke. It will take years to accomplish both, though interest rates have already come down, with the 10-year note hitting 4.01% on Friday.
David Stockman offers a detailed exposition on the tariff levels and an unhealthy degree of criticism, but fails to make any salient points concerning why the tariffs matter, why they were imposed, or what the future holds. Ultimately, Stockman's analysis boils down to just more Trump-bashing rhetoric, with no valuable insights.
As far as U.S. inflation is concerned, the net effect will vary depending on a number of variables, including the level of tariffs (percentage), how the tariff is calculated, and whether the company or country chooses to pass along the cost of the tariff to the end consumer or keep their prices in an affordable range and reduce their profit margin.
The International Trade Administration defines tariffs thusly:
- A tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs applied on different products by different countries.
- National sales and local taxes, and in some instances customs fees, are often charged in addition to the tariff.
- The tariff, along with the other assessments, is collected at the time of customs clearance in the foreign port. Tariffs and taxes increase the cost of your product to the foreign buyer and may affect your competitiveness in the market.
Obviously, the calculus is challenging and not uniform. Some companies may export direct to a retailer, others export to wholesalers, making the cost, or price, lower. Different countries are being assessed different rates of tariffs. Some will seek workarounds, like selling to a country with a lower tariff rate and then exporting into the United States at a lower rate. There will be plenty of gaming and negotiation on the tariffs and the end result is not necessarily inflationary.
For example, many of the products subject to Trump's tariffs are supply chain items like car parts, computer chips, small motors, nuts, bolts, etc. Others are discretionary, like most consumer products, such as clothing, household supplies, TVs, electronics, etc.
Where the tariffs will have little effect is on the most essential items, food and energy. Most food consumed in the U.S. is home-grown or raised. The U.S. also produces much of its own energy, having large oil, natural gas, coal, and renewable reserves.
When it comes down to the money in the pockets and wallets of American consumers, the choice will be theirs. If silk shirts from Vietnam become too expensive, people don't have to buy them. The same goes for TVs, socks, shoes, bicycles, toys, and all manner of consumer discretionary goods. The prices of these items will either be too high, in which case the company loses its market share, or at a level consumers can afford, possibly at some profit margin loss to the producer, but maintaining a share of the local market by keeping prices in line.
Thus, those screeching that the tariffs will cause runaway inflation or other evil effects are probably out to lunch, with little understanding of economics or international trade and only looking to score political points.
At the end of the day, the tariffs are paid by the producer or importer at entry. There is no evidence that companies will be passing along the added cost to consumers. Some will, others will eat the cost, live with a lower profit margin and maintain their market.
Some of that helps explain why stocks took a major hit Thursday and Friday. Companies that are dependent on exporting to the U.S., like Nike (NIKE), got slaughtered. Companies that sell - in the main - products made in the United States, like retail grocer Kroger (KR), barely registered a blip. While Nike ended Wednesday, April 2, before the tariffs were announced, at $64.97 and ended the week (April 4) at $57.25 (-11.88%), Kroger closed Wednesday at $67.26 and on Friday at $67.18, a loss of 8 cents, though there were some momentum traders that pushed the stock as high as $71 Friday morning before taking profits the rest of the day.
Taking the comparison a little further, Kroger, your friendly neighborhood grocer, has a PE of 18.29 and a dividend yield of 1.91%, which is OK and somewhat conservative. Year-to-date, it is up 9.86%. Nike's PE is 19.05 with a dividend yiled of 2.79%, and is down 24.34% year-to-date, which skews the PE lower and the dividend yield higher. Essentially, it was overpriced and coming down anyway. The tariffs just accelerated the process.
Trying to make sense of Trump's tariff policies may end up being a fool's gambit. First, the tariff percentages were derived simply by dividing the U.S. trade deficit of a country by its total exports to the U.S.. This was made well-known on Thursday. Here's a prime example:
Flexport's team was able to reverse engineer the formula the Administration used to generate the "reciprocal tariffs."
— Ryan Petersen (@typesfast) April 3, 2025
It's quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country.
The chart below shows the… pic.twitter.com/01bUpfKgk8
So, it's already common knowledge that the tariffs calculations were a bunch of bologna. The intention of the tariffs was probably something much different than bringing manufacturing back to the United States, though that certainly seems like a Trumpian, rational move. The real reason is probably to rebalance the books, get more revenue at the borders rather than from the wallets and purses of U.S. citizens.
Throwing the whole world into chaos, ending globalism (free trade), and causing a mini-crash on Wall Street are just bonus material. Trump's eventual goal might even be as far-reaching as shutting down the Federal Reserve and returning to some form of gold standard with currency issued directly by the U.S. treasury. That would take an act of Congress, which still isn't quite on board with the re-structuring plans that are already well underway.
Stocks
To say the least, the week didn't go well for most equity investors, though those with more conservative allocations toward income-producing (dividends) stocks did better than those who were holding high-flyers in the growth department. Apple, Amazon, Nvidia, Nike, and others got taken to the cleaners.
For the Week:
Dow: -3,264.04 (-7.86%)
NASDAQ: -1,735.20 (-10.02%)
S&P 500: 506.86 (-9.08%)
NYSE Composite: -1,651.69 (-8.57%)
Dow Transports: -1,432.34 (-9.82%)
Closing at 15,587.79, the NASDAQ is already in bear market territory. It was down 17.96% as of Thursday's close. Friday's finish put it at -22.73%.
The Dow Jones Transportation Average is even worse, down 25.88% from its November 25, 2024 high of 17,754.38.
All of the major indices are trading below their respective 50 and 200-day and 40-month moving averages and all of them are off more than 10% (correction) from recent highs, which may not be seen again for a very long time. How long? Five years, 10, 15, maybe never. Like it or not, the selling, now that Trump has induced chaos and dis-inflation into the economic picture, is likely far from over.
Defensive names, especially those in the consumer staples sector, should outperform 80-90% of the market in the near term. With a recession nearly built-in at this point, another 20-30% downside for all of the major averages over the next six to 12 months is not out of the question. There are certain to be days of huge upside moves ahead, but the economic data should continue to point toward slowing growth and a combination of inflation, dis-inflation, and outright deflation that will confound most professional and individual traders.
Anybody who was largely short at the end of January has made huge profits and are not about to give up on their positions. Weeks ahead may prove challenging at best, though a strong bounce should be part of the analysis. Stocks, while they were severely overvalued for years, are still at very high levels.
The major averages have only knocked off gains from the last year or so. If this is the beginning of a major structural change in global trade, the U.S. is likley to suffer more pain, as will markets in most of the developed nations in Asia and Europe.
Stock market breaks often accompany recessions. First quarter data is suggesting that the U.S. is already in one. Most of Europe is in recession for certain and there's every indication that the economies of England, France, and Germany are going to be destroyed by a combination of prior bad decisions (Ukraine, Green Energy, etc.) and now, a realignment of trade arrangements which are not to the EU's benefit.
Trump was urging Fed Chair Powell to lower rates and "stop playing politics," but Powell isn't about to rush to judgement and bail Wall Street out with more cuts designed to cheapen the cost of borrowing. The market is more likely to do Trump's bidding than the Fed.
The next FOMC meeting isn't until May 6-7. Prior to that a slew of data will be available to the FOMC, including 1Q GDP (last Thursday of April, the 24th), April Non-farm Payrolls (May 2), and the usual ISM data, CPI, PPI, etc.
Treasury Yield Curve Rates
| Date | 1 Mo | 1.5 mo | 2 Mo | 3 Mo | 4 Mo | 6 Mo | 1 Yr |
| 02/28/2025 | 4.38 | 4.37 | 4.38 | 4.32 | 4.32 | 4.25 | 4.08 |
| 03/07/2025 | 4.38 | 4.36 | 4.33 | 4.34 | 4.29 | 4.29 | 4.05 |
| 03/14/2025 | 4.37 | 4.36 | 4.33 | 4.33 | 4.30 | 4.29 | 4.09 |
| 03/21/2025 | 4.36 | 4.33 | 4.33 | 4.33 | 4.29 | 4.26 | 4.04 |
| 03/28/2025 | 4.38 | 4.35 | 4.35 | 4.33 | 4.30 | 4.26 | 4.04 |
| 04/04/2025 | 4.36 | 4.35 | 4.36 | 4.28 | 4.25 | 4.14 | 3.86 |
| Date | 2 Yr | 3 Yr | 5 Yr | 7 Yr | 10 Yr | 20 Yr | 30 Yr |
| 02/28/2025 | 3.99 | 3.99 | 4.03 | 4.14 | 4.24 | 4.55 | 4.51 |
| 03/07/2025 | 3.99 | 4.01 | 4.09 | 4.21 | 4.32 | 4.66 | 4.62 |
| 03/14/2025 | 4.02 | 4.00 | 4.09 | 4.20 | 4.31 | 4.65 | 4.62 |
| 03/21/2025 | 3.94 | 3.92 | 4.00 | 4.12 | 4.25 | 4.60 | 4.59 |
| 03/28/2025 | 3.89 | 3.91 | 3.98 | 4.11 | 4.27 | 4.65 | 4.64 |
| 04/04/2025 | 3.68 | 3.66 | 3.72 | 3.84 | 4.01 | 4.44 | 4.41 |
Movemnent on the treasury yield curve was dramatic, and, in terms of spreads, more flat than ever, with full spectrum (30-days out to 30-years) squeezed down to a mere +5 basis points, easily the lowest its been since dis-inversion back in early December of last year. 2s-10s were more moderated, ending up at +33 basis points, down just five from last week.
With the market taking pains to adjust to Trump's new trade reality, dropping the 30-year bond a massive 23 basis points over the course of the week will have the general effect of weakening the dollar, which is one of the targets of Trump's strategy, though what the government needs are lower short-term rates by which to deal with the deficit. For now, the government should be content to issue one, two, and three-year debt, swapping out some of the short-term bunk left over by Janet Yellen.
Trump has put the ball squarely in Powell and the Fed's court. Expect the President to continue haranguing the Fed with calls to lower the federal funds rate. He might get some support from the banking community and Wall Street, who surely wouldn't mind overnight borrowing at 3.00-3.25%, but it seems, because the Fed isn't quite convinced it has done enough on inflation, lower rates will have to wait, for now.
Spreads:
2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5
12/13: +15
12/20: +22
12/27: +31
1/3: +32
1/10: +37
1/17: +34
1/24: +36
1/31: +36
2/7: +20
2/14: +21
2/21: +23
2/28: +25
3/7: +33
3/14: +29
3/21: +31
3/28: +38
4/4: +33
Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23
12/13: +18
12/20: +29
12/27: +38
1/3: +38
1/10: +54
1/17: +41
1/24: +40
1/31: +36
2/7: +32
2/14: +32
2/21: +31
2/28: +13
3/7: +24
3/14: +25
3/21: +23
3/28: +26
4/4: +5
Oil/Gas
WTI crude oil got absolutely crushed in the Tariff Trauma, closing out Friday in New York at $62.32 a barrel, the lowest closing price since August, 2021, after the Biden administration made sure the price would rise by cutting off drilling and exploration and promoting the "Green New Deal." Last week's closeout price of $69.04 on Friday, March 28, likely won't be seen again for years. Most of the major producers in the Middle East and elsewhere in OPEC+ have already begun boosting production. Oil is headed to the $50s in short order and along with it the price of gas in the U.S., Europe and elsewhere, a welcome relief for consumers.
Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.22, up a dime from last week's $3.12. Gas prices haven't actually declined much since January and February and were actually lower in November and December, but, a year ago, the national average was $3.52, so there has been progress. Of course, gas buyers won't see the effect of the huge drop in the price of oil for a few more weeks as stations use up inventory purchased at higher prices.
Gas prices this week were higher across the country, led by California is up 17 cents this week to $4.90. Oklahoma, at $2.73, is the cheapest, followed right behind by Mississippi ($2.74), though both are higher than last week and significantly up from the lows of December and January. Tennessee ($2.77) and Louisiana ($2.81) are next up the ladder.
Outside of Pennsylvania ($3.40) and Maryland ($3.26), New England and East coast states all range between $2.85 (New Hampshire) and $3.14 (Delaware). New York was two cents higher at $3.09.
Every state in the Southeast is under $3.00 except Florida ($3.16) and Georgia ($3.03). The Midwest is also elevated with Illinois at $3.49. Every state in the Midwest other than Kansas ($2.88), Kentucky ($2.89) and Missouri ($2.95) are back over $3.00 a gallon. The West continues to have the highest prices. Along with California, Washington is the only state above $4.00, at $4.34, though Oregon ($3.96) and Nevada ($3.91) are getting dangerously close. Idaho is at $3.33, while neighboring Utah is $3.19.
Sub-$3.00 gas can be found in at fewer states this week, with just 15 hitting the mark as opposed to 24 last week and 33 two weeks past. Prospects for lower gas prices are very good now, though it's likely going to be a little while before Trump gets them down where he'd like them, with a national average around $2.60.
On the supply side, the president's "drill, baby, drill" directive has been met with yawns and inconsistent support by oil producers who are reluctant to spend money on new projects when prices are, or could be, falling. While depressed oil and gas prices are a boon to the overall economy, they hurt profits at the major drillers and refiners, prompting a general wait-and-see attitude currently. Along with his tariff regime, the path to lower gas prices will likely come from lower demand with some contribution from greater Middle East supply.
Bitcoin
This week: $78,955.22
Last week: $83,825.10
2 weeks ago: $85,049.05
6 months ago: $63,514.35
One year ago: $69,412.30
Five years ago: $6,886.60
Bitcoin held up very well through the end of the week, and many - especially gold and silver holders and stackers - wondered why. Sunday afternoon is supplying the response: whales were "hodling" through the tariff carnage, waiting until nobody was looking (Sunday) to drop the price down a few thousand dollars with probably more declines straight ahead.
Bitcoin is going to go to $70,000 in a hurry, and it will still be massively overpriced. Anybody "hodling" or holding any significant amount of crypto is just plain stupid. There's nothing there at all and one has to question, when real things like gold and silver are going down, stocks are getting decimated and real estate will soon feel the pinch, why should something like Bitcoin or any other crypto element be spared?
The selling began in earnest just after noon Eastern Time and seems very suspicious. Why wasn't bitcoin deprecated like any other asset on Thursday and Friday? Maybe because it's a massive fraud? Could be.
Bitcoin has not been over $100,00 since February 4. There's almost no chance of it going back to that level. Falling to around $65,000-$70,000 before an even deeper plummet, seems the most likely direction, based on bitcoin's past history of crashes. The chaos in financial markets virtually guarantees bitcoin's demise and those of the rest of the thousands of crypto-mintages that are going to vaporize a large amount of what is perceived to be wealth. The worst part about bitcoin or crypto as an asset is that you can't even say one's wealth is "on paper" because any measure of crypto is electronic. It's not "on" anything except a computer screen. Crypto is absolutely worthless.
Precious Metals
Gold:Silver Ratio: 103.53; last week: 88.74
Per COMEX continuous contracts:
Gold price 3/9: $2,917.70
Gold price 3/16: $2,993.60
Gold price 3/23: $3,028.20
Gold price 3/30: $3,090.00
Gold price 4/6: $3,056.10
Silver price 3/9: $32.55
Silver price 3/16: $34.11
Silver price 3/23: $33.29
Silver price 3/30: $34.82
Silver price 4/6: $29.52
The significance of the degree by which silver was sold off on the COMEX last week cannot be understated. The severity of the declines sent the gold-silver ratio to unfathomable levels above 100, which, in the longer view, is completely out of bounds and an indication of just how corrupted, unreliable and unrealistic Western measures such as the COMEX and LBMA's London fix really are. These relics of price suppression are - like the London Gold Pool back in the 1960s - close to being entirely broken and out-of-touch.
For what it's worth, silver's actual, real world price is nowhere near $29.52, which was the COMEX settlement price at the close of trading on Friday. That can clearly be seen at retail and also, if ever contract that closed at that price had stood for delivery, the COMEX would have had to declare "Force Majeure” (which they do routinely, though not on an official basis) and shut itself down.
Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):
| Item/Price | Low | High | Average | Median |
| 1 oz silver coin: | 36.86 | 41.00 | 37.90 | 37.57 |
| 1 oz silver bar: | 36.00 | 47.66 | 39.90 | 38.92 |
| 1 oz gold coin: | 3,187.30 | 3,297.75 | 3,240.50 | 3,243.19 |
| 1 oz gold bar: | 3,100.00 | 3,206.25 | 3,171.41 | 3,177.53 |
The Single Ounce Silver Market Price Benchmark (SOSMPB) declind severely, to $38.57, losing $4.99 from the March 30 price of $43.56 per troy ounce.
While silver prices at retail did tumble, with eBay pricing down nearly $5.00 overall, the drawdown was not as severe as what the COMEX had been pricing in with steep declines Thursday and Friday. Gold also held up relatively well, with finished one-ounce pieces remaining well above the $3,100 level.
Buyers and sellers on eBay managed to find a sweet spot between $37 and $39. Those prices, while constituting a high premium over spot, reaffirms silver's value to stackers. The COMEX price and LBMA fix are quickly becoming little more than what they were designed for, a discounting mechanism, a definite trend developing between the COMEX "paper" price, where every 1000-ounce contract has multiple claims and settlement is made in fiat, not metal.
The same can be said for gold. Despite the rigged markdowns at week's end, buyers continue to step up and buy at high premium prices, the concept being more of having gold in hand regardless of price during the current turmoil. More and more individuals are becoming cognizant of the concept that gold and silver are money, regardless of what "official" price-setters determine in their relentless discounting against fiat currencies, especially the US dollar.
The last time stocks, bonds, and precious metals all fell at the same time - circa the GFC in 2008-09 - gold and silver recovered much more quickly than their financial rivals.
With central banks continuing to buy gold in quantity, gold's price should remain near record levels. The tariff event horizon, while potentially devastating for the FIRE (Financial, Insurance, Real Estate) does not apply to precious metals to the same degree.
WEEKEND WRAP
This site, FinanceCharts.com, was recommended to Money Daily by a friendly source. Worth a look if you are doing your own research and trading.
Finally, where is the world headed. The best guess is that everybody - from billionaires to sovereign nations to middle and lower class folks - is going to feel poorer, for a while. The effects of chaotic economic turmoil cannot last long and adjustments will occur in all aspects of the human condition. In the current environment, people holding stocks are already a bit nervous and possibly scared, to the point at which some panic selling is likely to occur. They may turn out to be the lucky ones as the stock market's deterioration proceeds.
Like the government is full of corruption and fraud, stocks don't really provide value, only the appearance of it, and remain massively overpriced. The Shiller PE stands today at 31.31, after attaining a high above 38.50 a few months back. That should be considered a good start because reversion to the mean requires 17.23, which is less than half of the number at present.
Can stocks fall another 50% from here? Sure, why not? People don't like losing money, and the more they believe they are losing, the more likely they are to make very, very bad moves.
A year from now, people will still be scratching their heads, trying to figure out just what happened. Most of them will come to the wrong conclusions. Poor people might find themselves a little better off, able to buy some things, like groceries, clothes, and household goods, at lower prices. Some may even be able to consider buying a home. Being middle class may not sound like such a bad idea again.
At the same time, a lot of formerly "rich" people will not feel so high and mighty, though, relatively thinking, they'll still be better off than most. There will be more than a few people on Wall Street looking very, very stupid, as if there aren't enough already.
In the end, measuring wealth is a relativity game. It's all about what you're measuring against.
At the Close, Friday, April 4, 2025:
Dow: 38,314.86, -2,231.04 (-5.50%)
NASDAQ: 15,587.79, -962.81 (-5.82%)
S&P 500: 5,074.08, -322.44 (-5.97%)
NYSE Composite: 17,618.61, -1,148.59 (-6.12%)
For the Week:
Dow: -3,264.04 (-7.86%)
NASDAQ: -1,735.20 (-10.02%)
S&P 500: 506.86 (-9.08%)
NYSE Composite: -1,651.69 (-8.57%)
Dow Transports: -1,432.34 (-9.82%)
Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2025, Downtown Magazine Inc., all rights reserved.
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