{"id":4991,"date":"2025-08-17T13:32:16","date_gmt":"2025-08-17T13:32:16","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/4991\/"},"modified":"2025-08-17T13:32:16","modified_gmt":"2025-08-17T13:32:16","slug":"fresh-from-the-trading-room-a-rerun-of-the-1970s","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/4991\/","title":{"rendered":"Fresh from the Trading Room: A rerun of the 1970s"},"content":{"rendered":"

The shoe has finally dropped.<\/p>\n

\u201cIt\u2019s midnight!!! Billions of dollars in tariffs are now flowing into the United States of America!\u201d President Trump announced on Truth Social, moments after the higher rates kicked in. Yet, to many people\u2019s surprise, markets barely flinched. Global equities rose across the board\u2014U.S., EU, Japan, China\u2014all higher. Only India lagged.<\/p>\n

Why so calm? Partly headline fatigue, but mostly clarity. Markets dislike uncertainty more than bad news; once the rules are clear, companies can plan, invest and move forward.<\/p>\n

Japan offers a textbook example. After talks with U.S. Cabinet officials in Washington, Japanese negotiators secured two key assurances: goods already taxed at 15% or more would face no additional duty, and all other tariffs would be capped at 15%. Both sides even agreed on how to interpret the fine print. Within days, the European Union struck a similar deal.<\/p>\n

The response was immediate. Japan\u2019s TOPIX index climbed past 3,000, and the Nikkei 225 is now within striking distance of its all-time high\u2014this despite political uncertainty after the recent Upper House election. Clarity clears the runway.<\/p>\n

But tariffs aren\u2019t the only front where history is echoing. The U.S. Cabinet has been increasingly vocal about the Federal Reserve, with President Trump pressing Chair Jerome Powell to cut rates and loosen financial conditions. Striking d\u00e9j\u00e0 vu.<\/p>\n

We noted back in early 2024<\/a> that today\u2019s inflation backdrop already looked uncomfortably like the 1970s, when America endured three distinct waves of rising prices. Now, the parallels are multiplying.<\/p>\n

On August 15, 1971, President Nixon declared a national emergency under Proclamation 4074, slapped a 10% ad valorem duty on all imports and ordered Treasury Secretary John Connally to suspend the dollar\u2019s convertibility into gold\u2014effectively dismantling Bretton Woods. Nixon also leaned on Fed Chair Arthur Burns to ease policy ahead of the 1972 election. Burns resisted\u2026until he didn\u2019t, and inflation\u2019s next wave was set in motion. Still, the parallels to that era\u2014tariff shocks and political heat on the Fed\u2014are uncomfortably close.<\/p>\n

The \u201cNixon shock\u201d shredded the dollar\u2019s purchasing power, in gold terms, by nearly 95% over the next decade. Today, gold is again hovering near record highs, its uptrend intact. As financial writer Jim Grant once observed, \u201cGold ought not to trade as an inflation hedge, but as an investment in monetary disorder, of which the world has plenty.\u201d<\/p>\n

And right now, disorder is something the markets have in abundance.<\/p>\n","protected":false},"excerpt":{"rendered":"The shoe has finally dropped. \u201cIt\u2019s midnight!!! Billions of dollars in tariffs are now flowing into the United…\n","protected":false},"author":2,"featured_media":4992,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[584,5273,79,1739,2597,18,5276,5275,5268,5270,1742,19,5271,17,5272,188,2804,2019,5269,5274],"class_list":{"0":"post-4991","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-article","9":"tag-both","10":"tag-business","11":"tag-commodities","12":"tag-education","13":"tag-eire","14":"tag-english-en","15":"tag-equity-index","16":"tag-featured-article","17":"tag-futures","18":"tag-gold","19":"tag-ie","20":"tag-inspirante-trading-solutions","21":"tag-ireland","22":"tag-market-trends","23":"tag-markets","24":"tag-metals","25":"tag-newsletter","26":"tag-nikkei-jpy","27":"tag-strategies-techniques"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/4991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=4991"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/4991\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/4992"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=4991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=4991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=4991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}