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Donald Trump’s Quiet Shift in U.S. Macroeconomic Policy: Stablecoins and Cheap Oil
Donald Trump is quietly reshaping the foundations of U.S. macroeconomic policy, according to financial expert Nigel Green. Rather than engaging in direct confrontation with the Federal Reserve, Trump appears to be pursuing a dual strategy centered on stablecoins and cheap oil, which could redefine how the United States manages its economy.
Stablecoins: A Tool for Digital Monetary Dominance
Stablecoins, particularly those backed by yield-bearing assets like tokenized Treasury bills, are emerging as a key element of Trump’s economic vision. Nigel Green, CEO of DeVere Group, believes that these digital dollar assets could play a transformative role in boosting the U.S. economy. Unlike traditional stablecoins that merely mirror the value of the U.S. dollar, yield-bearing stablecoins incentivize global demand for the dollar by offering interest to investors.
Green explains,
“It means that anyone—including retail users, global investors, and decentralized finance (DeFi) platforms—can hold a dollar-based asset that earns interest, often automatically and seamlessly.”
How Stablecoins Support Trump’s Economic Goals
The strategy behind stablecoins serves several purposes:
- Boosting demand for U.S. Treasuries: As deficits grow, higher demand for Treasuries helps stabilize the U.S. debt market.
- Suppressing interest rates: By offering yield through market mechanisms, stablecoins reduce reliance on Federal Reserve interventions.
- Cementing the dollar’s dominance: Stablecoins position the U.S. dollar as the world’s leading digital reserve currency.
This approach aligns with Trump’s broader economic strategy, ensuring that the dollar remains central to global financial systems while supporting domestic economic objectives.
Oil: The Traditional Lever for Inflation Control
While stablecoins represent a digital economic strategy, oil remains a more familiar tool in Trump’s playbook. Green argues that Trump uses cheap oil not only as an economic stimulus but also as a means of controlling inflation. By encouraging increased domestic production, applying diplomatic pressure, and leveraging market influence, Trump aims to keep oil prices low. This, in turn, reduces business costs and minimizes the need for Federal Reserve intervention.
Green elaborates,
“Cheap oil fuels everything. It’s inflation control by brute force.”
Bypassing the Federal Reserve
Trump’s two-pronged strategy of stablecoins and cheap oil effectively creates an alternative system of macroeconomic management, one that operates outside the direct control of the Federal Reserve. By influencing both demand (through digital yield mechanisms) and supply (via energy prices), Trump is building what Green describes as a “parallel system.”
Green notes,
“He’s not firing Jay Powell. He’s building a parallel system. It’s remarkably coherent.”
As the 2024 U.S. presidential election approaches, these strategies provide insight into how Trump could reshape monetary policy without making changes to the Federal Reserve’s leadership. For those interested in cryptocurrencies, investing, and finance, understanding these macroeconomic shifts is essential for navigating future market developments.
