Warrior for World Peace

Trump: Warrior for World Peace?

Robert Kiyosaki

Brian Maher

Contributor, Freedom Financial News
Posted Jan 13, 2025

Dear Reader,

President-elect Trump has raised a lovely rumpus — even before he has yet to swear the oath.

He has claimed Greenland, Canada and the Panama Canal should fall under United States superintendence.

He has not even refused deployment of American arms to take them aboard.

Howls of outrage have naturally risen against him.

He has transgressed every global “norm,” his critics thunder.  He has violated every known decency of international society.

Yet do not forget: The fellow enjoys pulling critics’ noses and yanking their legs.

He enjoys viewing thick smoke billow from their ears.

It is central to his stratagems.

Trump’s Real Purpose

Most likely — in my estimation — the president-elect is merely anteing forth his initial negotiating positions.

He is setting forth his pawn upon the geopolitical chessboard.

And he is willing to accept its sacrifice for a more advantageous position.

He is merely manifesting “the art of the deal.”

I believe his true grail is superior trade and security arrangements for the United States — attained through firm negotiation.

It is not the armed conquest of allies.

Yet could President Trump truly become a peace champion? Could he negotiate peace in a global war that has raged for years?

I refer not to armed warfare waged with tanks, cannons, airplanes and vessels.

I refer instead to economic warfare waged with dollars, euros, yen and yuan.

I refer to currency warfare.

Currency War

Currency war is:

  • A period when multiple countries intentionally devalue their currencies to gain a trade advantage. This is done by making exports cheaper and imports more expensive.

Freedom Financial News contributor Jim Rickards is likely the world’s tiptop authority on currency wars.

He has, in fact, authored a book bearing that very title.

Here Mr. Rickards walks in sporting his tophat and trenchcoat… opens his attache case… and spreads the currency war plan upon the planning table:

  • The political benefits [of a cheap currency] are obvious… A cheaper currency makes your exports cheaper from the perspective of a foreign buyer…
  • A cheap currency is also a way to import inflation. This happens because citizens of the cheap-currency country need more of their currency to buy imports from trading partners…
  • So the political benefits of a cheap currency are clear. Political leaders can claim that exports are up, imports are down (which helps the balance of trade and GDP), export-related jobs are being created and the risks of deflation are being mitigated. 

Mr. Rickards claims the world has been at currency war since 2010. And the United Stated let loose the dogs of currency war:

  • [Cheapening its currency was] what China was doing to the entire world from 1994 to 2010 and that’s why the U.S. launched a currency war in 2010 — to fight back against disinflation and borderline deflation caused by cheap Chinese goods… The currency war that commenced in 2010 is still going strong 15 years later in 2025. 

No Winners of Currency War

Yet currency wars rarely limit themselves to two warring parties.

As in kinetic war, they ensnare additional belligerents.

Thus retaliation invites retaliation which invites retaliation which invites retaliation. On and on it goes in stalemated and ruinous lunacy.

The winner of currency war is in fact the loser — it emerges with a sawdust currency — and tattered war aims:

  • No one wins a currency war, and everyone is damaged in the process…
  • It turns out most of the claims about a cheap currency are illusory, temporary or both.  It may appear that the finished prices of exports look cheaper to a foreign buyer when the seller’s currency is cheaper.
  • Yet a cheap currency makes foreign inputs more expensive, and those costs offset the benefits of a cheap currency in terms of labor and local inputs…
  • A cheap currency is like a hidden tax (that’s what inflation is) that is paid for… imports. That leads to demand destruction in other categories of goods and services and may lead to job losses in local industries as consumers spend more on unavoidable imports.

Currency War Is Like Real War — and Love

The Sage of Baltimore — Henry Louis Mencken — once argued that war is much like love:

“Easy to begin but very hard to stop.”

So with currency war. This is a war easy to begin but very hard to stop.

Yet can President Trump negotiate a comprehensive armistice… and stop the wasteful currency war?

Mr. Rickards believes he can. This he can attain if he consults the currency peace plan of Ronnie Reager and Treasury Secretary Baker:

  • Trump is not trying to start a currency war; he’s trying to end it once and for all…
  • Far from the reckless, inflationary process the media claim, Trump’s actual plan is based on the highly successful model developed by James Baker for Ronald Reagan and implemented in the Plaza Accord of 1985 and the Louvre Accord of 1987.

What were these, Mr. Rickards?

  • After the severe economic recession of 1982 and Paul Volcker’s policy of moving interest rates to 20%, inflation in the U.S. was finally reigned in. Inflation dropped from 13.5% in 1980, to 6.1% in 1982, and then 3.2% in 1983.
  • Investment in the U.S. went on a tear. U.S. real growth was 16% from 1983 to 1986. Everyone wanted dollars to invest in the U.S. and the dollar boomed reaching an all-time high in 1985.

When Strength Is a Weakness

Yet a weightlifter may grow overly musclebound — he becomes a grotesque caricature of a strongman.

Thus a currency may grow overly musclebound. And so:

  • The Reagan administration decided the U.S. dollar was too strong and was hurting U.S. exports and jobs. Treasury Secretary James Baker convened a meeting of the finance ministers of France, Germany, Japan, the UK, and the U.S. at the Plaza Hotel in New York City.
  • The purpose was not to fight a currency war. The purpose was to create order in currency markets out of the chaos that had prevailed since 1973.
  • The parties reached a joint agreement that would devalue the U.S. dollar in an orderly fashion versus the French Franc, Japanese Yen, UK pounds sterling, and the German Deutschemark.
  • Once the targeted level for the dollar was achieved, the parties would use their best efforts, including market intervention as needed to maintain those levels within narrow bands.

Trump for the Nobel Peace Prize

Yet currency peace required a second negotiation:

  • A separate meeting in Paris at the Louvre in 1987 agreed that the devaluation phase was over, and the dollar would be maintained at the new parities. This was not currency war; it was currency peace achieved by agreement and implemented in a cooperative fashion.
  • The Louvre Accord ushered in a period of global prosperity that lasted twenty years until the Global Financial Crisis of 2008.

Now come home. Mr. Rickards believes this is the peace President Trump will chase:

  • Trump’s goal is to repeat the success of the Plaza and Louvre Accords. Trump’s advisor on this is Robert Lighthizer… Lighthizer was also USTR for Ronald Reagan from 1983 to 1985 so he’s a veteran of prior currency wars and was in the administration around the time the Plaza Accord was being developed. Lighthizer is the perfect individual to help Trump achieve the kind of success that Reagan and Baker had in the 1980s.

My sincere hope is that Mr. Rickards is correct.

If he is in fact correct… and President Trump can bring currency peace to the world’s warring nations… nations at currency war since 2010…

I myself shall suggest him for the Nobel Peace Prize.

Can you find a man worthier?

Regards,

Brian Maher

for Freedom Financial News