Tariffs: A Cauldron of Uncertainty

Tariffs: A Cauldron of Uncertainty

The S&P 500 and Nasdaq just chalked up their worst week since the March 2020 pandemic-fueled crash.

We’re just two days into the new global economic reordering, and investors are in full panic mode.

Last Wednesday, President Trump announced the most sweeping tariff package in history. And it sent a shockwave through global markets.

The administration imposed a universal 10% tariff on nearly every U.S. trading partner starting April 5. And reciprocal tariffs of up to nearly 50% starting April 9.

Some commentators are calling it “shock and awe.”

Since President Trump announced the tariffs, the S&P 500 and Nasdaq are down 11%. And as of this writing, both are indicated to open Mondays trading down 2%.

Nothing has been spared.

Even gold – considered a safe haven during market volatility – and crude oil are down 3% and 14%, respectively, since the administration rolled out universal tariffs.

To put that in terms of dollars, we saw nearly $6 trillion worth of invested capital eviscerated in just two days.

According to President Trump, it’ll be worth it in the long run. He believes his tariff regime will level the playing field between the United States and its trading partners and reshore U.S. manufacturing operations.

Sounds good, right?

In theory, yes. But in practice, how will the United States compete with low-cost labor from countries like Vietnam or China?

I don’t have the answer, and neither does the market. That is a big reason why stock prices are crashing right now.

No one knows how this situation will get resolved. In the interim, corporate profit margins will get squeezed… Earnings will drop… And many smaller companies will go out of business.

Here’s what we do know…

The market initially thought President Trump was bluffing and his tariffs threats were just a negotiation tactic. But now, investors realize we may be in for some long-term uncertainty as the trade war escalates.

Will this create a punishing recession? No one knows. Will this bring America’s trading partners to the negotiation table, resulting in lower tariffs? No one knows.

We are in a cauldron of uncertainty.

Here’s what we do know. If this ends up being an unmitigated financial disaster, there’s only one hand to play: Money printing.

The Fed will lower rates, buy trillions of dollars of U.S. bonds, and generally flood the world with liquidity.

This makes bitcoin the single-best insurance hedge you can have in your portfolio.

Think it through. If the tariffs work, great. The market stabilizes, and the party goes on. But if tariffs don’t work and we go into a recession, the Fed will act and act decisively.

And if it does, bitcoin will boom higher.

Even though bitcoin is currently selling off with the rest of the market, it is the single-best insurance you can buy for the guaranteed turbulence ahead.

When Markets Break, You Need Asset Insurance