Trump is a gray rhino

(Source: San Diego Zoo)

Black Swans” are hard-to-predict events that cause chaos. Examples include terror attacks.

Gray Rhinos” are obvious dangers but often ignored by most of people.

Every step made by President Trump draws global attention. It is likely that Trump will be the largest “gray rhino” in global financial markets this year or the following!

Since the 2008 financial crisis, financial indicators have reached their historical highs. To avoid repeating the same mistakes, all the governments have made every effort to moderately tighten the monetary supply and prevent the stimulus bubble from breaking down. In the past two years, the U.S. Fed has raised interest rates, aiming to mitigate any financial bursts in the future, and Fed’s plan is still ongoing.

However, all these careful plans will be likely ruined by Trump’s short-sighted demeanor. Trump has intended to impose tariffs on imported steel and aluminum products for a long period of time. It is expected that he will sign for execution in few days. The announcement immediately triggered a number of European countries being mad at the United States.

Once the global trade war starts, large-scale inflation will inevitably take place. Central banks in all countries will have to raise interest rates sharply in the short term, and another financial crisis may once again arrive.

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