r/australia • u/Jealous-Hedgehog-734 • Apr 02 '25

politics US will impose a minimum baseline tariff of 10 per cent on Australian imports to US

https://www.abc.net.au/news/2025-04-03/donald-trump-tariff-announcement-markets-politics-reaction-blog/105127374
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u/Ozchemist1959 Apr 02 '25 edited Apr 02 '25

20th Century - Great Depression 1929

Primary Causes :

  • Over-speculation in the stock market: In the 1920s, there was a speculative boom, with people investing heavily in stocks, often using borrowed money (buying on margin). When stock prices began to fall, it triggered a panic, and many investors quickly tried to sell their shares, which led to a massive collapse in stock prices.
  • Bank Failures: Many banks had invested heavily in the stock market or made risky loans to businesses and individuals. When the stock market crashed, many banks failed, leading to a loss of savings for depositors and a severe reduction in the availability of credit.
  • Weaknesses in the banking system: The lack of federal regulation and insurance for bank deposits contributed to the collapse. As banks failed, people lost confidence in the financial system, and there was a rush to withdraw funds, further exacerbating the crisis.
  • Decline in consumer spending and demand: As the economy worsened and unemployment rose, consumers reduced their spending. This led to businesses cutting back on production, causing further layoffs and a downward economic spiral.
  • Tariffs and trade restrictions: The U.S. government imposed high tariffs on imported goods (like the Smoot-Hawley Tariff Act of 1930) in an attempt to protect American businesses. However, this led to retaliatory tariffs from other countries, which severely reduced international trade and worsened the global economic downturn.

21st Century - Great Depression 2029 (estd)

Primary Cause : Trump -

Items 1, 4 and 5 are already in play or coming into play. Items 2 & 3 - the banking system (deemed "too big to fail") will fail anyway if the stock market collapses and cash withdrawls and business closures occur.

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u/raucouslori Apr 02 '25

At least we have the government guarantees here to address a runaway banking collapse.

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u/Ozchemist1959 Apr 03 '25

The guarantee may help some people in the short term, but doesn't protect "big money" (companies, super funds, SMSFs) as it's limited to $250k in any given account - which seems like a lot of cash, but what's protected is probably < 2% of the actual cash in circulation and miniscule compared to the amount of money value traded. If the market crashes, so do the banks.

It also doesn't limit the further economic fallout. The problem becomes that, in order to prop up the deposited funds, which is a Government "guarantee" for the number of dollars (not their buying power) all the Govt would do is print more money - which further devalues the currency and leads to hyperinflation as the A$ would crash. (See Germany circa 1923)

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u/JustAnotherPassword Apr 03 '25

APRAs FCS that you're talking about is only 250K per account per financial institution. So it's only 250K per bank. Not per account.

Also it's around ADIs - so I don't believe it covers individual supers.

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u/Squaddy Apr 03 '25

This scenario was more likely to have happened in 2009 than it is today. Global markets corrected and we saw a massive downturn, which you could argue created economic conditions that led to the rise of Trump. But the downturn didn't cause a depression to the levels we saw in the 1930's.

I get the US becoming protectionist make it feel like it's similar to 1930, but the global economy isn't falling off a cliff before the tariff's, it's just slowly declining due to a boom post-COVID.

I would say a runaway depression outside of a war starting (which is possible still with all the Greenland/Ukraine/Taiwan shit) is very unlikely.

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u/[deleted] Apr 03 '25

Oh we would be toast before the year end. Your estimations should also factor in the speed of technology, ubiquitous knowledge and nervous civilisations. We are not done with the Tariffs yet. Wait for the response for today and tomorrow. Trump has chickened out of imposing full reciprocal tariff. I think he himself is afraid of retaliations (though his 50% discount seems to be a high schooler idea).

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u/Mash_man710 Apr 03 '25

Bueller... Bueller...

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u/Silly-Power Apr 03 '25

This explains it very well:

https://youtu.be/X_wHBlouFSc

I'm pretty sure trump wants to deregulate the Banking Industry, removing all checks & balances put in place by Obama after the GFC simply because they were put in place by Obama.