What awaits the winner of the 2024 elections? It could be an economic crisis if not a crash or severe recession. Trump is hoping to repeat what Cleveland did in 1892, win the election after losing his re-election in 1888 and becoming the second President to win an election after losing his re-election. Hopefully for Trump, history won’t repeat itself as Cleveland election victory was met with a severe depression of 1893. Two figures factors into it. In 1890, Congress passed a law to allow government to purchase silvers and have the currency backed by gold and silver with a ratio of 16 ounce of silver for every ounce of gold with the idea of inflating the currency from a deflationary period. The second factor was the McKinley Tarriff act that put tariffs at its highest level. Tariffs were the main tax to cover Federal government costs with no income tax available but Tariffs like present income tax were impacted by the supply side for if the tariffs too high, it could result in higher prices and adding silver to gold led to a bubble which imploded on Cleveland watch. The silver purchases canceled, and we saw the collapse of the economy with many companies bankrupt and banks closed. Deflation followed
Interesting side to the story that new gold discovery led to expansion of the gold and expansion of the money supply. A recovery began when McKinley took over the Presidency, four years later. Today we are seeing dark clouds including debts, government spending at a all-time high and slower job growth. We just found out that in 2023, job growth was nearly 850,000 jobs less than originally reported.
And Bloomberg is predicting downward revision of 600,000 to 1,000,000 in 2024 so the actual unemployment rates may be higher.
And when you look inflation impact on American workers that changes in household net during the Biden/Harris declined compare to Trump years.
The chart below showed the impact of inflation on food for many Americans and while inflation has cooled up according to statistics, for many Americans they still see it at the grocery stores.
And budget deficits have increased and while 2020 saw big increases due to Covid pandemic, but spending continued after the Covid pandemic as new spending came to support green initiatives. All this could lead to economic crisis in 2025 and whoever is President, will be stuck with cleaning up the mess.
The Dollar is under assault as BRICS nations are now looking for alternative to the dollar as the reserve currency and recently Saudi Arabia is now open to trading in currencies beside the United States and allowed a 50 year with the United States on the Petrodollar expired this past June 9th. As one Saudi official noted, “There are no issues with discussing how we settle our trade arrangements, whether it’s in the U.S. dollar, the euro, or the Saudi riyal.” The dollar is under siege, the budget exploding, and wars that threaten to expand into a possible World War show a world in chaos. This chaos could lead to an economic crisis in 2025.
Will 2025 repeat what happened in 1893 in which Trump wins the election as Cleveland did only to find himself emerged in economic crisis.
The Donelson Files 