Trump's Agenda: Leveraged Buyout of America, 60,000 Jobs Cut, Tariffs Imposed

Donald Trump's second term agenda is being likened to a private equity playbook, with the United States being treated as a conglomerate undergoing a leveraged buyout. This strategy involves stripping, flipping, and relisting the public sector to make America's balance sheet more attractive. Trump's approach includes purging senior leadership, slashing costs, and implementing tariffs to bring wealth into the conglomerate.

Trump's first move was to replace senior leadership across various departments, including the Justice Department and the Pentagon, with loyalists. This is similar to private equity firms replacing C-suite executives. Additionally, Trump has proposed eliminating over 60,000 federal jobs with the help of billionaire Elon Musk, aiming to streamline operations and reduce costs.

Tariffs are being used as a revenue tool to bring money into the country from nations framed as unfair business partners. This move is politically framed as an America First policy, but it comes with risks for international relations and consumer burden due to expensive imports. The administration is expected to continue aggressive cost rationalization, including shutting down "unprofitable" and inefficient business departments such as climate programs, education grants, and diversity initiatives.

The ultimate goal is to maintain revenue while reducing costs, preparing America for a potential relisting by the midterms in 2026. The administration may use deficit-funded tax cuts and direct stimulus checks to inflate top-line revenue numbers. If successful in influencing the Federal Reserve, a rate cut despite rising inflation could fuel a bullish rally across various sectors, including stocks, real estate, and crypto.

Midterm voters will be presented with a prospectus of prosperity, with surging bank accounts, property values, and political sentiment. GDP growth will be inflated by deficit spending, and unemployment figures will be suppressed by the influx of work in the gig economy. Trump is expected to turn on the money printer around Q3/Q4, deploying helicopter money to offset inflation and redistribute cash. This strategy aims to shrink the nominal debt burden substantially.

The private equity strategy involves gutting spending for the next nine months, then turning on the money printer, tolerating high inflation for 12 months while asset prices soar. This risky approach could have significant political fallout and international relations issues in the short term but may pay massive dividends for the American economy in the long term.

This hostile takeover of America Inc. could be a catalyst for crypto adoption, given the push to make America the center of crypto innovation and the focus on stablecoins as the key to ongoing US dollar dominance. Despite the risks and potential second-order effects, it may bring about the crypto adoption the industry has been hoping for.