Who gets rich from stock market turbulence?
#338
Photog: Good Morning, Economist.
Econ: Good Morning, Photographer.
Photog: Why do you think Donald Trump is raising, suspending, and re-raising tariffs? Why is he plunging the global economy into chaos? Is he insane?
Econ: I don't think so. He's doing it because he thinks he can profit from it.
Photog: In which way?
Econ: He gets attention and remains the talk of the town. And it allows him to exert pressure on other countries. Last but not least, I believe that he and his friends benefit from this turmoil in a very concrete way.
Photog: In what way?
Econ: I can imagine that Trump's erratic tariff decisions are the backbone of the most gigantic business model of all time.
Photog: Is it you going crazy now? What are you talking about?
Econ: Listen. Nothing can make you richer in a shorter time than knowing how stock market values will develop in the near future. If you know how markets will change, you buy those investments today that will increase in value tomorrow. Right? This is especially true when stock market values fluctuate significantly.
Photog: I understand.
Econ: That's exactly what's happening right now. Only Trump and his cronies know which tariff announcements will come next. And thus, these few people know which stock market values will rise and fall, how and when. I brought you this tweet from Trump. He tweeted this four hours before the current pause in tariffs. Afterwards, the US stock exchange NASDAQ celebrated its third most successful day in its 40-year history.
Photog: I can imagine that some people in Trump's circle, Trump included, are becoming very, very, very rich right now. I mean even richer than they already are.
Econ: And these Trump people do so at the expense of others. Because this is the principle of stock market trading: some win what others lose.
Photog: So a few become infinitely rich – and in doing so, deprive many of their savings.
Econ: That's how things are going at the moment.
Photog: History books may one day write this about this president.
Econ: If things go badly, it will be merely a footnote.
Photog: If. See you in Democracy, Economist.
Econ: See you in Democracy, Photographer.
Related: Stocks Surge After Trump Reverses Most Tariffs but Hikes China’s Rate (Time)
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