The fallout

Mr. Market was not a happy camper today. Not only did fifteen inches of snow fall on Central Park, but the NYSE was dealing with a big risk-off trade. Ditto with Bay Street. And look at gold. And Bitcoin.

Trump nailed it again.

On Friday the Supremes did the expected and said the guy’s crazy and ever-morphing patchwork of tariffs was illegal. Find another way. Not only did that throw into question $175 billion those taxes had collected (which might need to be refunded), but all the country deals the White House had made as Trump used tariffs as a hammer to extract favours in return for access to the USA. We used to call this ‘extortion’.

By the way, Canada and China did not play. Britain, Japan, Korea, the EU and others did – and now regret it.

Well, the prez had a hissy, imposed at 10% global tariff using another tool, then raised it by half the next morning. Chaos ensued. Nobody can do business this way. It’s like playing chess with a golden retriever.

The stakes are huge. In exchange for lower tariff rates some countries pledged to spend billion investing in American manufacturing. That’s suddenly in question. Tariffs (now declared illegal) cost Toyota $8 billion and Ford $2 billion. Do they get it back? What craziness will Trump come up with next in defiance of judges he says ‘embarrassed their families’ with the decision?

So investors have been playing it safe – taking risk off the table. Moving assets around until the fog lifts. Equities dropped – not disastrously – and a hunk of money went into precious metals. Gold came within two hundred dollars of its all-time high, rising 2%. Silver gained about the same – and both metals advanced as the US dollar fell. Again. It’s lost bigly since DJT came back to the White House.

Gold is also benefitting from inflation concerns, as well as insulation from Trump. Data last week showed underlying inflation is sticky, and expected to rise. So maybe the Fed won’t be dropping rates much, or at all, which fed bullion.

As for crypto, look out below.

Bitcoin shed another $2,000, dipping below $65,000 a thingy. Remember that this was worth $126,000 just four months ago – so the crash in value has been epic at 50%. The decline today alone exceeded 4%, while other digital, make-believe money also cratered (Ether lost 5%).

Source: Bloomberg

The crypto market has shed $2 trillion since October, and lost $100 billion in the last 24 hours. Rather than being a safe-haven asset, crypto has been volatile, twitchy and as emotionally-crippled as it is illiquid. The mess with Iran, the tariff see-saw, the cartel scare in Mexico, the threats to Greenland, NATO and the rules-based global trade order – it’s all too much for the snowflakes who thought fiat money was dead.

Investors have just pulled $4 billion out of crypto funds, and if Bitcoin drifts below $60,000 the bottom could be a long ways down.

Trump was to be the crypto president. He failed at that. His own meme coins are almost worthless. His family’s crypto business would be the same, had UAE not come along to bail it out (in return for a Nvidia chip deal). Trump was also the tariff guy, out to reorder the world and restoke US manufacturing. Now that’s failing.

His approval rate is 39% and disapproval is 60%. That matches his popularity right after the January 6th insurrection and his departure from power. The midterm elections draw closer by the day and despite the president’s attempt to influence the outcome (vote ID requirements, redistricting, an attack on mail-in ballots and potential military presence at the polls), the opposition will likely surge.

But that does not mean an end to the chaos. As stated here before, it probably gets worse until January, 2029.

Stay balanced and diversified. Rebalance once a year. Stuff the tax shelters. Remain calm. Get some help. Get a dog. And give thanks you’re in Canada.

About the picture: “Please find attached a picture of my childhood small beast,” writes Shaun. “I hope you accept pictures of much smaller, very much more prickly, beasts. This is Nips. Being allergic to most animals with fur, she was my childhood hedgehog who lived to the ripe old age of 8, and who died of shaky hedgehog syndrome (basically Parkinson’s for hedgies) in 2002. I know it’s not a canine, but she still had 4 legs, and snuffled instead of barked. She was well loved, had the run of the house, and was welcome in any warm lap that would have her.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/23/the-fallout-2/