Liberation Day - Trump Flips Off America's Trade Allies

Trump’s tax play is here. And yes, it’s big, beautiful, and completely unaffordable.

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BREAKING NEWS: The House just passed the One Big, Beautiful Tax Bill—with last-minute concessions that rewrote the rules for clean energy investment. We at Dakota Ridge Capital are monitoring the situation closely and sending timely updates to our mailing list. Read more here.

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Key Provisions:

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• Middle-class relief: Expanded credits, lower rates for households under $200K
• Business perks: R&D credits, full expensing, and factory-friendly deductions.
• Infrastructure money: Roads, energy, digital upgrades.
• Tariff buffer: Assistance for workers and industries exposed to global trade.
• Retirement twist: MAGA accounts ($5,000/yr, with $1,000 seed for newborns).
• Top tax rate stays at 37%—no reversion to 39.6%.
• IRA trimmed, but not gutted.

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But the trade-off? A deficit surge.

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Markets love tax cuts. Bonds, not so much.

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Markets Turn Risk-On—But Bond Traders Aren’t Buying It

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Global growth is still slowing:

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• IMF, World Bank, and OECD all trimmed forecasts.
• Global GDP for 2025: 2.3%—not keeping pace with inflation.
• U.S. expected to grow 2.2%, EU just 1.1%, Eurozone a weak 0.9%.

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What changed? April 7 happened.

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• Stocks crashed, bonds buckled.
• Gold soared. Bitcoin held.
• The screen was red, and portfolios bled.
• Tariff worries seeped into global trade forecasts.

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But since then…

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• Tariff ‘deals’ appeared quickly.
• Equities rebounded fast.
• Bonds? Still nervous.
• MOVE index (bond volatility) spiked above 135—a level that triggers action from someone, somewhere

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Why the divergence?

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• U.S. debt issuance: ~$1T rolling over in 30 days
• Credit downgrade.
• Inflation still sticky, Fed still frozen.
• Deficits projected to grow.

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Meanwhile, while stocks have been pulling capital from gold and silver, all three began to trade up together…until stocks got hit by a weak bond auction.

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Middle East Deals: Big Numbers, Bigger Implications

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The Gulf is betting on U.S. stability—with trillions.

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Defense

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• Saudi Arabia: $142B in U.S. defense contracts.
• Qatar: $96B deal including Boeing’s largest aircraft order and $42B in weapons.

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Tech & AI

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• Saudi’s DataVolt to invest $20B in U.S. AI/data centers.
• Google, Oracle, AMD, Salesforce, Uber: $80B in joint U.S.-Saudi initiatives.

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Energy & Infra

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• GE Vernova exporting $14.2B in gas turbines.
• U.S. firms tapped to build airports, parks, entire cities in the Gulf.

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Financial & Real Estate

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• Qatar’s direct investment in the U.S. hit $3.3B in 2023—and growing.
• Gulf sovereigns signal this is just the start.

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Investor Takeaway: Watch defense, tech, and infra stocks with MENA exposure.

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Still Unsure What To Do With Your Portfolio? Start Here.

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April 7 was a gut check. Remember how you felt?

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• Did you panic sell?
• Dump everything into cash?
• Swear off risk?
• Or did you double down with a plan?

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Now that the dust has settled, ask:

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• Were your decisions signal-based—or emotion-based?
• Were you following narratives, or following a system?

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The Case for Systems Over Sentiment

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What works:

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• A framework for identifying market regimes (growth, inflation, liquidity)
• Macro factor tracking (yields, spreads, commodities)
• Regime-based asset allocation rules
• An overlay that adapts for momentum, volatility, and price

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There are many options—just don’t fly blind.

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In the Charts

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• S&P 500: Net positive YTD, despite the noise
• 10-Year Treasury: Still elevated, still flashing caution.
• Weak 20-year Treasury auction spooks bonds and weighs on stocks.
• Gold vs. Bitcoin: Volatility gap narrowing—watch this pair.
• USD: Direction unclear, but Treasury actions suggest soft-dollar bias.

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• Volatility in both stocks and bonds spiked during the tariff tantrum.
• MOVE Index (bond equivalent of VIX): Spiked in April, now retreating, but still above comfort levels.
• MOVE hitting 135 → alarm bells and some version of the cavalry arrives.
• Lower volatility helped stocks rebound—why not bonds?

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• Elevated yields? Dealers going short ahead of the auction nudges the price down/yield up and locks in a profit.
• Moody’s downgrade of the U.S. credit rating?
• Big deficit worries—the One Big, Beautiful Tax Bill will not fix that.
• Treasury market struggles show up in weak 20-year auction (mentioned 3x because…).

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Weekly Highlights

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We’re proud to share this in-depth feature in Clockwork’s latest blog: “The Hidden Engine of Clean Energy.” Dive into how Dakota Ridge Capital is helping shape the future of renewables through innovative tax equity strategies.

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Watch or listen to Episode 4 of the MacroMashup podcast: featuring Manish Jain, CEO and Founder of Mezzi Wealth. If you’re looking for a way to take control of your investments, give it a listen. Manish and his team give you a fantastic tool to organize and understand your investment portfolio.

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Watch or listen to Dr. Pippa Malmgren on tariffs, power politics, and what the headlines aren’t saying.

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Enjoyed this newsletter? Get Involved.

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• Subscribe to MacroMashup: one email a week, zero noise.
• Watch us on YouTube, or tune in via Spotify / Apple
• Collaborate with us at contact@macromashup.com

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Your Energy Partners

We help banks, family offices, HNWIs, non-profits-and developers in making strategic investments in clean energy projects that create tax credits to lower investors’ taxt liability while providing essential capital for developers.

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Book a Call

Welcome to Macro Mashup, the weekly newsletter that distills the content from key voices on macroeconomics, geopolitics, and energy in less than 7 minutes. Thank you for subscribing!

‍

Macro Mashup aims to bring together the greatest minds in Finance and Economics who care deeply about current U.S. and international affairs. We study the latest news and laws that affect our economy, money, and lives, so you don't have to.

‍

Tune in to our channels and join our newsletter, podcast, or community to stay informed so you can make smarter decisions to protect your wealth.

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Why Do We Need A Reset?

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What Was The Deal After WW2?

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• Post-WWII U.S. Dominance: With unmatched economic strength, military power, and geographic advantage, the U.S. took the lead in shaping the postwar world order.
• Bretton Woods Conference (1944): The U.S. led 44 allied nations to create a new financial system anchored by institutions like the IMF, World Bank, and IBRD, placing the U.S. dollar at the center of global trade.
• Trade and Security Framework: The U.S. Navy secured global trade routes. Meanwhile, the U.S. rebuilt devastated economies like Germany and Japan—buying their exports to jumpstart growth and ensure prosperity.
• Cold War Bargain: In return for economic support, U.S. allies were expected to align with the West in countering Soviet communism.
• Gold Standard: The Bretton Woods system linked global currencies to the U.S. dollar, which was convertible to gold at $35/oz—a system that worked as long as the U.S. held most of the world’s gold.
• Built-In Trade Deficit: With the USD as the global reserve currency, countries sold goods to the U.S. and accumulated dollars, resulting in America's persistent structural trade deficit.
• Challenges to U.S. Dominance: As Europe and Japan recovered, U.S. dominance began to wane. Simultaneously, the cost of the Vietnam War and domestic spending like the Great Society strained U.S. finances.
• End of Gold Standard (1971): Mounting inflation and gold outflows prompted President Nixon to end gold convertibility, ushering in the era of floating exchange rates and fiat currencies.
• China’s Reentry: Initially excluded due to Taiwan’s role in Bretton Woods institutions, China began warming ties with the U.S. in the 1970s and formally joined in 1980.
• Rise of China: 2001 China joined the World Trade Organization (WTO). The West hoped it would liberalize and modernize.
• Instead:
  • China became the world’s manufacturing base,
  • Western corporations offshored production to boost profits,
  • China aggressively harvested intellectual property to fuel its industrial ascent.

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Where We Have Ended Up

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Decades later, the consequences of these shifts are painfully clear:

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• U.S. manufacturing has been hollowed out
• Entitlement spending continues to balloon
• Defense budgets fund never-ending foreign entanglements
• The U.S. runs chronic trade deficits, deepening dependence on foreign suppliers—especially China—for:
  • Critical medical supplies (remember COVID-19?)
  • Components essential to U.S. military hardware

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Meanwhile, through successive financial crises and a global pandemic, we’ve:

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• Grown dependent on the Federal Reserve to bail out markets during every downturn,
• Lived through extended periods of zero or near-zero interest rates, allowing asset holders to borrow cheaply and build wealth,
• Racked up $36 trillion in national debt, with annual deficits now approaching $2 trillion and rising fast.

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• We have $140 trillion in wealth

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• But it’s not distributed evenly

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• The bottom 50%—a large cohort of Trump’s base—does not care if the stock market gets turned upside down.

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The Reset Is Intended to Benefit Main Street, Not Wall Street

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What Has Trump Done?

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• He has placed a $10 trillion bet on reshaping the economy.
• His tariff strategy is blunt yet transparent—a high-stakes attempt to reset global trade rules.
• The plan? Use access to the U.S. market as leverage, offering the carrot of trade opportunity in exchange for “fairer” terms.
• His endgame is to redraw the global trade map into three camps:
  • Nations aligned with the U.S.
  • Nations that are neutral
  • Nations that have elected into trade tension with the U.S.

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What Does He Hope To Achieve?

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• Fairer trade terms: Many countries have long imposed tariffs on U.S. goods. Trump’s position is that it’s payback time.
• A sense of justice: Like the NFL player who retaliates and gets the penalty, Trump argues that he’s not the instigator, just the one finally pushing back.
• A revival of domestic manufacturing: An ambitious goal with bi-partisan support.

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Is The Method Worth The Madness?

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• Markets recoiled largely because the tariff levels were shockingly high—and markets hate surprises.
• The negotiating style is classic Trump: aim high, create chaos, and force the other side to the table.
• But the tone is aggressive, bordering on hostile. Countries have two options: retaliate or fold—neither inspiring goodwill.
• It’s less of a negotiation and more of a geopolitical standoff—Trump is holding the world to ransom
• Either:
  • Trump’s a genius
  • Trump caved to the bond vigilantes

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In The Markets

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Let’s dig into some charts.

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Mood: Bloodbath to Bubblebath?

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April 9, 2025 was the most successful day in stock markets since 2008.

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April 10 was less reassuring:

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The Bond Vigilantes had their way and forced Trump to cave…or he’s a genius.

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Finally, credit spreads pay attention

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But now something else is happening:

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The 10-year yield is heading in the opposite direction from the USD, suggesting that something may still be rotten in the markets.

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What’s The Spin?

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The Trump administration argues that the president is a genius. He fired the tariff canon and waited for a week.

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Tariffs bit at midnight on April 8, 2025 - drum roll.

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75 nations offered to negotiate. China raised the stakes, and Trump doubled down on China.

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The stock market freaked. No problem.

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Then, the U.S. Treasury market started to go on tilt, and someone told Trump that it would melt the planet.

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So he told the Bond vigilantes he had their backs—just watch me. I bet he didn’t use the Watergate recorded line for that…

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The 10-year auction went great, and vigilantes got some tasty yields.

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Then Trump tweeted the rabbit from the hat: tariffs for those who played nicely were delayed for 90 days. Not China, though—bad China!

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The stock market gapped up. Hostage or genius? You tell me.

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What Should You Do?

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If you are confused, you are in good company:

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The turnaround took 75 minutes.

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This is your playbook for the next 90 days:

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1. Pay attention to Truth Social—it’s your best source.
2. Don’t place big bets on market direction.
3. Place your stop loss/stop limits/puts carefully to protect your downside.
4. Sell into rallies—buy the dip, sell the rip.
5. Simplify your portfolio so you understand what you have.
6. Remember that bear markets return stocks to their rightful owners—don’t give yours away.

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What’s Next/What To Follow

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If you want a 15-minute breakdown of what one experienced investor thinks might be going on with Trump and the markets, go no farther than this excellent piece from Mark Tilbury

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This podcast by Adam Taggart has an intereview with Lawrence Lepard (@LawrenceLepard on X) where they discuss Lawrence’s latest book, The Big Print.

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The first half of the book diagnoses how we got into the situation that needs resetting. The second half proposes some quite radical solutions.

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Five Ways To Support MacroMashup

‍

1. If you are interested in clean energy investment advisory services, book a complimentary call here
2. Please subscribe to our new YouTube channel - or support our audio podcast by following us on Spotify or Apple - we appreciate your support!
3. If you'd like me to be a guest on your podcast or guest blog about clean energy or macroeconomics, send an email to contact@macromashup.com
4. Share this newsletter on X here
5. If you enjoy this newsletter, please email it to a friend by clicking on the button below.

Welcome to Macro Mashup, the weekly newsletter that distills the content from key voices on macroeconomics, geopolitics, and energy in less than 7 minutes. Thank you for subscribing!

‍

Macro Mashup aims to bring together the greatest minds in Finance and Economics who care deeply about current U.S. and international affairs. We study the latest news and laws that affect our economy, money, and lives, so you don't have to.

‍

Tune in to our channels and join our newsletter, podcast, or community to stay informed so you can make smarter decisions to protect your wealth.

‍

‍

Gold is surging. Treasuries are wobbling. But let’s not bury the dollar just yet.

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Three years of decline.

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That’s what the U.S. dollar has seen.

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It’s enough to get the headlines rolling:

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“Is the Dollar Dying?”
“Gold Soars as Faith in USD Falters.”
“De-Dollarization Begins.”

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But while fear sells, facts matter. And the truth is more complicated—and more interesting.

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Let’s break it down.

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What’s Driving The Dollar’s Slide?

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There are a few major culprits:

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• Tariffs and trade tensions. U.S. trade policy has become more erratic, spooking markets and international partners.
• Investor exit. Confidence in U.S. government debt has taken a hit. Treasuries have sold off. Stocks followed. So did the dollar.
• A flight to gold. Central banks and private investors are buying gold aggressively. Gold is up 53% year-over-year, outpacing the S&P 500 by a mile in 2025.

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And perhaps most telling of all: the dollar is no longer moving in tandem with 10-year Treasury yields.

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Usually, they rise and fall together. Lately, they’ve diverged. That’s rare—and troubling.

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Red line is USD; blue line is the 10-year Treasury yield.

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Why The Dollar Still Matters

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Despite the weakness, the dollar remains the core of the global financial system. It is:

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• The default currency for global trade
• The anchor for energy pricing (like oil)
• The world’s primary reserve currency

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There is no replacement waiting in the wings. Not the euro. Not the yuan. Not bitcoin. Not even gold.

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A Strong Dollar Can Still Break Things

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Let’s not forget: a too-strong dollar can wreak havoc.

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• Countries that borrow in USD feel more pressure when the dollar rises.
• Oil-importing nations see prices spike.
• U.S. companies exporting abroad get punished by unfavorable FX rates.

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In 1985, when the dollar hit peak strength under Paul Volcker, the world had had enough. This led to the Plaza Accord, in which major economies coordinated to weaken the dollar.

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We could be heading toward a similar moment—Mar-a-Lago Accords?

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What’s Different This Time? One Word: China

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China doesn’t want to replace the dollar but wants to weaken its grip.

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This chart tells the story:

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1. U.S. still dominates GDP, stock, and bond markets.
2. In real terms (PPP), China is closing in fast—thanks to lower costs and faster output.
3. China makes ~30% of the world’s goods. That kind of leverage can pressure the dollar over time.

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Still, China’s renminbi isn’t built for global reserve status. Not yet.

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But Beijing is building alternatives—trade in yuan, digital currency experiments, and deals that bypass the dollar.

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It’s a long game. And one worth watching.

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What Could Actually Kill The Dollar?

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Here’s the real risk: not China. Not inflation. Not even gold.

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It’s the U.S. itself.

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The dollar is mighty because people believe in it—and in the system behind it.

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That trust erodes if America:

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• Undermines the rule of law
• Turns trade into a mafia-style negotiation
• Burns alliances for short-term gain
• Lets debt spiral without a credible plan

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Lose credibility, and no currency is safe—not even the dollar.

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Final Thought

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The U.S. dollar may be down. But it’s not out.

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Not yet.

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There’s no real alternative waiting to take the throne. But the pressure is rising. And if America wants to keep its currency at the center of the global economy, it needs to earn that position—every single day.

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In The Markets

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Continued volatility—every day, so it barely makes sense to post an update.

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The markets are trading on headlines:

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• Nvidia’s write-off—stocks down
• Talks with Japan are going well—markets up

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Here’s one thing worth looking at: Someone has been doing well since Liberation Day.

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Yes! The line going straight up since April 2nd is Trump Media. The U.S. dollar and stocks are down.

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Who’s winning?

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What’s Next/What To Follow

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The first is Hidden Forces

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I can’t recommend Demetri Kofinas’ work highly enough. His model is free for the first hour, with no ads. If you want the second hour, which includes a deeper discussion, you have to pay.

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I encourage you to sign up for Hidden Forces. Demetri is a great interviewer and a thoughtful host, and the preparation is impressive.

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The takeaways are:

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• The WhiteHouse meeting with Zelensky signaled a schism with Europe—capital is going home
• Capital’s search for the location where it is best treated creates massive cross-border flows, which are spiking currency volatility.
• Current account deficit’s mirror image is capital account surpluses (buying Treasuries and U.S. stocks). If we aim to reduce one, we should also expect the other to decrease.

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The next is Lex Fridman

I would not recommend the entirety of this podcast. The conversation starts at 30:00. It’s worth listening to the first 20 minutes after that.

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It’s a great example of a leader laying out very, very specific set of steps and a time-frame for executing his plan for Argentina.

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If only our leaders could do the same.

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Five Ways To Support MacroMashup

‍

1. If you are interested in clean energy investment advisory services, book a complimentary call here
2. Please subscribe to our new YouTube channel - or support our audio podcast by following us on Spotify or Apple - we appreciate your support!
3. If you'd like me to be a guest on your podcast or guest blog about clean energy or macroeconomics, send an email to contact@macromashup.com
4. Share this newsletter on X here
5. If you enjoy this newsletter, please email it to a friend by clicking on the button below.