As everyone knows, the stock market's biggest fear is uncertainty, and right now, there's nothing more frightening or unpredictable than Trump and Elon Musk's actions. There's never been anything like this in American history. You could call it reform, or you could call it a coup. They're tearing down a system that America has spent hundreds of years building. They're destroying the balance of the three branches of government and desperately trying to establish a presidential dictatorship.
Their plan to give corporations and the wealthy further tax breaks, abolish inheritance tax, and even eliminate income tax in favor of tariffs—where did that even come from?
We learned about stagflation in college economics, and it's terrifying to think we might experience what the US went through in the 70s and 80s. From 1973 to 1982, the US suffered severe stagflation. During that decade, the S&P 500 fell 20%. While inflation soared, the stock market plummeted. They eventually tamed inflation by raising interest rates to over 20%. That's when Ronald Reagan, the Republican president, started issuing insane amounts of national debt, causing it to balloon. But people mistakenly believe the economy was good because of this debt-fueled party.
Trump is wasting the money the US has poured globally to maintain its dollar hegemony. Soon, he'll likely demand astronomical sums from, or even withdraw, US troops stationed in South Korea, Japan, and elsewhere.
In short, Trump's policies are causing massive inflation while destroying the economy, making stagflation inevitable.
I've closed most of my positions, keeping only a few short positions.
This isn't about urging others to sell their stocks; it's just sharing my thoughts.