Crypto concerns are likely driving a lot of Trump “policy”

By Paul Krugman. I very much share his entirely well-grounded suspicions.

By now it’s obvious that Donald Trump suffers from CBS — Cowardly Bully Syndrome.

On Friday, Trump blasted China’s new export controls on rare earths, declaring them a “moral disgrace” which were “obviously a plan devised by them years ago.” And he threatened to impose 100 percent tariffs on China, on top of the already high existing tariffs.

Less than a day later he was groveling…

This was the largest one-day crash crypto has experienced so far. My question, however, is why the prospect of an intensified trade war caused a crypto crash…

The answer, I believe, has little to do with economics and everything to do with politics. These days crypto derives its value largely from the support of politicians and government officials — in particular, officials who can be bribed. As a result, at this point crypto is largely a Trump trade. And crypto fell because the backlash against the potential trade war threatened to weaken Trump politically. - The National Memo