@elonmusk @realDonaldTrump He Jiangbing: Starting in 2025, the United States Will Lead the World into Deflation Rather than Inflation, and Reduce Its Deficit Rather than Increase It😊 Before the 2024 U.S. presidential election, Nobel laureates in economics collectively predicted that if the 45th U.S. President, Donald Trump, were re-elected, the United States would experience inflation and an increased deficit. Recently, Biden’s Treasury Secretary, Janet Yellen, stated that Trump’s tariffs would trigger high inflation in the United States. They are wrong again. Eight years ago, Nobel laureate Paul Krugman predicted that if Trump were elected in 2016, the U.S. economy would collapse under his leadership. Contrary to these predictions, during Trump’s administration, unemployment rates repeatedly hit record lows, the economy grew rapidly with low inflation, and apart from a brief stock market plunge in March 2020 during the pandemic, the economy was thriving. Similarly, Yellen and Federal Reserve Chair Jerome Powell’s claim that the inflation at the time was “transitory” proved incorrect, as inflation persisted for four years. If Trump is re-elected, international oil prices will significantly drop; tax cuts will increase revenues; the Musk- and Vivek-led Efficiency Office will reduce federal spending by $2 trillion annually; and with Europe and China experiencing recessions, the outcomes will include the complete disappearance of U.S. inflation and the onset of global deflation. Additionally, contrary to the perpetual errors of economists and media, the U.S. federal deficit will gradually decrease rather than sharply increase during Trump’s administration. Oil Prices Will Decline Under Trump After Trump was first elected as U.S. President in 2016, his first international visit was to Saudi Arabia, which was widely criticized. Traditionally, newly elected presidents visited U.S. allies such as the United Kingdom, Canada, or Japan. At that time, I argued in World Journal that Trump’s high regard for Saudi Arabia was primarily aimed at stabilizing oil prices. Saudi Arabia, as the leader of the Organization of the Petroleum Exporting Countries (OPEC), plays a crucial role in maintaining stable international oil prices. With low oil prices, the Federal Reserve had to cut interest rates. Trump frequently pressured the Federal Reserve on social media (then Twitter, now X), but Powell turned a deaf ear. Only with low oil prices and reduced inflation could the Federal Reserve lower interest rates, thereby boosting the economy and driving up stock prices. In August 2020, Trump and his son-in-law Jared Kushner implemented the Abraham Accords in the Middle East. Abraham is a revered figure in Judaism, Christianity, and Islam. This initiative facilitated diplomatic relations and normalized ties between Israel and Islamic nations in the Middle East and the Balkans, including the United Arab Emirates. If Trump is re-elected in 2024, Saudi Arabia may establish diplomatic relations with Israel, potentially bringing long-term peace to the Middle East. With the U.S.’s most important ally in the region, Israel, becoming more secure and stronger, the Middle East will see a stable decline in oil prices. In contrast, President Biden’s accusations that Saudi Arabia is an “international pariah” led the kingdom to oppose the Biden administration rather than the United States itself. Biden’s efforts to persuade Saudi Arabia to increase oil production resulted in OPEC reducing production instead. Saudi Arabia’s preference for Trump over the extreme left and the Biden administration suggests that under Trump, oil prices in the Middle East will stabilize and decline. On January 20, 2025, after Trump’s second inauguration, he will reopen the U.S.-Canada oil pipeline that Biden had closed. International oil prices will plummet on that day. Restrictions imposed by Biden on the extraction of oil, natural gas, and shale gas on federal lands and offshore sites will be overturned by Trump. Increased U.S. energy production will fundamentally alter the global energy landscape, and low international oil prices will become a long-term trend. As Europe, the world’s second-largest economy, and China, the third-largest economy, show signs of recession, demand for international oil will decline. Even if oil prices do not fall under Trump’s administration—an unlikely assumption—economic recessions will still lead to declining prices. During Biden’s four-year term, international oil prices soared while China’s economy, plagued by supply chain disruptions and rising unemployment, experienced a significant downturn beyond what official statistics reveal. Persistent deflationary spirals serve as visible evidence. By 2025, with major European economies like Germany, France, and the United Kingdom experiencing or on the brink of recession, overall price declines in Europe will be inevitable. Oil Price Drops Will Drive Down Global Prices I might have been the only economist or financial scholar who, four years ago, publicly predicted that Biden’s election would lead to inflation in the United States and subsequently drive up prices and housing costs in major market economies worldwide (excluding mainland China). My article “Global Inflation in 2021: China’s Self-Inflicted Challenges” was published on December 26, 2020, in the Hong Kong Apple Daily. Due to the 1,500-word limit of that article, I supplemented it significantly on social media (then Twitter, now X). I argued that Biden’s first-day decision to shut down the U.S.-Canada oil pipeline and ban energy extraction on federal lands transformed the United States from the world’s largest energy producer in 2019 into an importer, triggering inflation. Inflation often leads to leadership changes in democracies reliant on elections. Biden’s extreme energy policies caused inflation in market economies. Since oil prices are denominated in U.S. dollars, inflation in the United States naturally leads to global inflation. My prediction of four years of inflation was based on the premise that U.S. inflation would inevitably lead to Biden’s defeat and that a conservative like Trump, upon taking office, would reduce oil prices, ending inflation. This outcome starkly contrasts with Yellen’s earlier statement that “inflation is transitory.” The International Monetary Fund (IMF) used the MULTIMOD model to analyze how rising oil prices affect consumer prices in developed countries. The results show that a permanent 50% increase in oil prices raises annual CPI growth in the United States and Europe by 1.3 percentage points. Conversely, the World Bank’s recent research indicates that a 10% permanent oil price increase leads to a peak global CPI growth of 0.3 percentage points, while a 30% permanent oil price decline reduces global CPI growth by 0.4–0.9 percentage points. The impact of international oil prices on U.S. prices is even more direct. As I argued in my article four years ago, 5% of U.S. farmers feed half the world’s population. American agriculture is highly mechanized, and oil price fluctuations directly affect agricultural product prices. The U.S. is also a country reliant on transportation, with logistics heavily dependent on road transport and maritime shipping, both directly tied to oil prices. Hence, oil price fluctuations affect the United States more significantly than other economies. Tariffs Cannot Offset Falling Oil Prices Economists seem to adopt a binary mindset, where imposing tariffs and reducing taxes internally may lead to price increases if other factors remain constant. However, in their efforts to discredit Trump, they appear to selectively ignore more realistic factors: a significant drop in oil prices will lead to lower agricultural, petrochemical, industrial, and transportation costs. Major economies entering recessions will further drive prices down. My prediction is that with Trump’s second term, inflation in the United States and other major economies will vanish, and deflation will take hold (including in China). On December 10, 2023, Reuters reported that “U.S. Treasury Secretary Janet Yellen stated that if (Trump’s) new administration implements its tariff plan, it could undermine the progress made in curbing inflation, negatively impact competitiveness in some areas of the U.S. economy, and significantly increase costs for American households and businesses.” Yellen’s reasoning aligns with the collective argument made by Nobel laureates before the election: imposing tariffs would cause U.S. inflation. They have always been wrong. Trump has publicly stated his intention to impose a 25% tariff on Canada and Mexico and an additional 10% tariff on China on top of existing high tariffs. These cases should be analyzed separately. Trump’s tariffs on Canada and Mexico are more of a bargaining tool that can be rescinded upon achieving his objectives: managing the millions of illegal immigrants entering the U.S. from Mexico, curbing the influx of fentanyl and other drugs, and addressing Canada’s $100 billion trade surplus with the U.S. If these issues are resolved, the 25% tariffs will be eliminated. During the onset of the U.S.-China trade war in 2018, I was interviewed by Dr. Chen Xiaoping (now a host at VOA) ten times, with each session lasting an hour. At that time, I told Dr. Chen that Trump’s trade war with allies was a “contradiction among the people” and aimed only at equalizing tariff rates and trade balances, ultimately strengthening U.S. relations with its allies. In contrast, the trade war with China represented “contradictions between enemies,” involving more than just trade balance issues. For instance, achieving equal tariff rates and eliminating subsidies for state-owned enterprises would be challenging, potentially leading to complete decoupling. During Trump’s administration, despite tariffs as high as 25%, the U.S. experienced no inflation over two years. This will remain the case in future U.S.-China trade conflicts. First, moderate tariffs can be absorbed by Chinese exporters, U.S. importers, Chinese manufacturers lowering prices, or Chinese export subsidies, rather than being passed on to consumers. Second, China is not the sole producer of goods like home appliances and clothing; production has already shifted to Southeast Asia, India, and Mexico. Third, China’s countermeasures often harm itself, such as launching antitrust investigations against Nvidia, the sole producer of AI graphics cards. While Nvidia faces supply shortages, alternative suppliers in India and Southeast Asia can replace China’s market share. Similarly, restricting the export of rare earth elements like antimony (Sb) to the U.S. is futile, as the U.S. has long established safe supply chains with Australia and Canada. Tax Cuts and Job Reductions Will Only Decrease the Deficit It is easy to understand how cutting government bureaucracy and reducing redundancies can lower fiscal expenditures, achieving balance or even a surplus. A successful case is Argentine President Javier Milei’s reduction of government departments by half, achieving a fiscal surplus within a year of taking office. Trump’s efficiency office, led by Elon Musk, has proposed cutting federal redundancies and reducing federal government departments to save $2 trillion annually. It is less intuitive that tax cuts can increase revenue. In the 2021 fiscal year (October 1, 2020, to September 30, 2021), the U.S. federal government’s revenue reached a record $4.05 trillion. This achievement had little to do with President Biden, who took office on January 20, 2021. According to the independent Federal Budget Accountability Committee, the increase in federal revenue was primarily due to Trump’s 2017 tax cuts. Why do tax cuts increase revenue? First, in a globally integrated economy, when tax rates in market economies like the U.S. are lower than in others, capital shifts from high-tax to low-tax economies, expanding the tax base. Second, reducing taxes for individuals and businesses increases disposable income, which can be reinvested, used for stock buybacks, or consumed, all of which boost economic growth. Third, lower tax rates encourage overseas capital and businesses to return to the U.S., further expanding the tax base. In summary, current predictions about future economic and financial phenomena are often based on simplistic reasoning rather than comprehensive, fundamental indicators. As international oil prices decline and major economies fall into recession, inflation will transition into deflation. With Trump’s government implementing both revenue-generating and cost-saving measures, the U.S. federal deficit will decrease rather than increase. Author: He Jiangbing, a Chinese financial scholar and author of The Truth of Finance, The Illusion of Economy, and The Risks of Finance. References Reuters. (2023, December 10). Yellen warns of economic risks from tariffs. Retrieved from reuters.com World Bank. (2023). Oil price fluctuations and global CPI impacts. Retrieved from worldbank.org Wikipedia contributors. (n.d.). He Jiangbing. In Wikipedia. Retrieved December 14, 2024, from en.wikipedia.org/wiki/He_Jia… botanwang.com/articles/20201… 2025年起美国引导世界通缩而非通胀、赤字减少而非增加 诺贝尔经济学奖获得者在2024美国总统大选前联名发文指，如果美国四十五届总统川普再次当选的话，美国将发生通胀、赤字增加，最近，拜登的财政部长耶伦说川普的关税会引发美国高通胀。他们又要错了，如同八年前，诺贝尔经济学奖获得者克鲁格曼预测川普2016年当选美国经济在其领导下会崩溃，相反，在川普的领导下，失业率屡创新低，经济较快增长、低通胀，在2020年大流行的三月股市短暂暴跌很快恢复外都是欣欣向荣。同样，耶伦和美联储主席鲍威尔在通胀来临时候所说的“通胀是短暂的”——并不短暂——持续了四年。 由于川普再次当选国际油价会大幅下跌、减税会增加税收、马斯克和维维克政府效率部每年减少2万亿美元联邦支出、欧洲和中国出现衰退，从而导致：美国通胀会彻底消失、带动世界进入通缩。美国联邦赤字会逐步减少——而非如一直错误的经济学家与媒体预测的那样美国财政赤字在川普任内暴增。 川普任内油价会下跌 川普在2016年首次当选美国总统后，第一站访问了沙特阿拉伯广泛遭到诟病（而不是如之前的当选总统首站访问美国传统盟友英国、加拿大、日本等），我当年在《世界日报》撰文指，川普给沙特这么高的礼遇主要是稳定油价，沙特是石油输出国组织（OPEC）的带头大哥，对稳定国际油价至关重要，国际油价低位运行，美联储不得不降息，而川普多次推特（现在的X）试压美联储，鲍威尔置若罔闻。只有国际油价低位运行、物价下降美联储才会降息，导致经济提升和股价上涨。 2020年8月，川普和其女婿库什纳在中东推行亚伯拉罕计划，亚伯拉罕是以色列犹太教、基督教和伊斯兰教都认可的先人，该计划让以色列与中东和巴尔干半岛上的伊斯兰教信仰的国家纷纷与以色列建交，和关系正常化了，包括阿联酋等。2024年川普再次当选后，沙特可能与以色列建交，这样中东局势可能出现长期和平，美国在中东最重要的盟友以色列更加安全与强大。由于拜登指责沙特是“国际贱民”，拜登让沙特增产降低油价、而沙特让OPEC反而减产。沙特反对美国极左和拜登政府而非反美、更喜欢川普，所以，中东稳油价跌。 2025年1月20日，川普二次上台后，会开通被拜登关闭的美国——加拿大石油管道，国际油价当天会暴跌，被拜登严格限制的联邦土地、近海不能开采石油、天然气、页岩气会被川普全部废除，美国加大能源开采会让国际能源格局发生根本变化，国际油价维持低价运行是长期趋势。 由于世界第二大经济体欧洲和第三大经济体中国经济出现衰退迹象，对国际石油的需求会减少。即便川普任内国际油价不会下跌——这种假设虽然不存在，由于经济衰退物价下跌也不能避免，在拜登任期四年内，国际油价高企，中国经济由于受产业链专业、失业率增高、经济出现除统计局数据外明显衰退，物价持续走低，出现通缩螺旋就是一看得见的例证。2025年随着德国、法国和英国主要经济体已经出现和即将出现的经济衰退，欧洲物价整体下降是指日可待。 油价下跌会拉低全球物价 我可能是唯一一个在四年前公开发表文章论述拜登当选美国出现通胀、从而引发世界主要市场经济体（不含中国大陆）物价普遍上涨、房价大涨的经济、金融学者（《2021全球通胀 中国经济自加五难题》。 botanwang.com/articles/20201… ） 这篇文章刊登在2020年12月26日的香港《苹果日报》上，由于有1500字的字数篇幅限制，四年前，我在X上转发的这篇文章的时候做了很多补充，首先，拜登上台第一天就关闭了美加石油管道，禁止联邦土地开采能源，导致美国从2019年全球最大能源国变成进口国、通胀会导致依靠选举的民主国家更换领导人——拜登变态能源政策会造成市场经济体也发生通胀、国际油价以美元计价，美国发生通胀才能引发全球通胀。通胀是四年，我判断的前提是：美国通胀四年必然导致拜登政府下台，而保守派尤其是川普上台就会让油价下跌，通胀结束，而非耶伦们信口雌黄的“通胀是短暂的”。 国际货币基金组织IMF用MULTIMOD模型对油价上升如何影响发达国家的消费价格进行了分析。结果显示，如果油价永久性上涨50%，会提高美国和欧洲的年度CPI涨幅1.3个百分点。世界银行最近的研究指出，10%的永久性油价上涨在其效果高峰时将导致全球CPI涨幅提高0.3个百分点，而30%的永久性油价下跌则将使全球CPI涨幅降低0.4-0.9个百分点。 国际油价对美国物价影响会更直接，如我四年前文章所论述的，美国5%的农民养活着半个地球上的人，其农业生产高度机械化，油价涨跌直接影响了农产品价格涨跌；美国也是车轮上的国家、物流更多的是靠汽车运输、海上运输也跟油价直接相关，所以，油价涨跌对美国影响高于其他经济体。 关税难以对冲油价下跌 经济学家们脑袋进入二极管思维模式，对外加征关税和对内减税如果没有其他因素影响物价上涨是可能的。但是，他们好像为黑川普而选择性放弃更多现实：油价将会大幅度下跌而引发农产品价格下跌，石油化工和工业产品价格下跌，交通物业成本价格下跌，还有主要经济体经济衰退将形成物价下跌。我可以预测到的是：随着川普总统的二次上台，美国和世界重要经济体通胀将消失，通缩将会发生（这次也包括中国）。 2023年12月10日，路透社报道，“美国财政部部长耶伦当天表示，如果（川普）新一届美国政府实施其加征关税的计划，可能会破坏美国截至目前在遏制通胀方面所取得的进展，对美国经济一些领域的竞争力产生不利影响，并显著提高美国家庭和企业的成本。耶伦还对美国财政的可持续性感到担忧。”耶伦跟大选前一众诺贝尔经济学奖获得者联名的理由一样，加征关税会造成美国通胀，他们一直是错误的。 川普公开表示要对加拿大和墨西哥征收25%的关税；对中国在原有高关税基础上再加征10%关税。这个要分开分析，川普对加拿大与墨西哥加征关税是威胁性的，达到其目标可以随时取消：加拿大、尤其是从墨西哥非法走线进入美国非法移民数以百万计，必须管理好非法移民；从墨加流入芬太尼等毒品泛滥，必须禁止；加拿大对美贸易顺差1000亿美元，必须贸易平衡对墨西哥亦然。如果这三个方面能让川普贸易，25%的关税就没有了。 2018年中美贸易战开打前夕，我接受过现为VOA主持人陈小平博士十来次专访每次一个小时，我当年对陈博士谈过，美国川普总统对盟友打贸易战是“人民内部矛盾”仅仅是解决关税税率对等与贸易平衡问题，打着打着会跟美国更亲密；跟中国的贸易战是“敌我矛盾”，不仅仅贸易平衡很难解决，税率对等很难解决，不让对国企补贴更是难以做到。打着打着就全面脱钩了。川普已经提名与中国打贸易战操盘手其贸易代表莱特希泽的门生贾米森·格里尔（Jamieson Greer, 上图）为“美国贸易代表”，其主张与川普类似：格里尔提倡与中国“战略脱钩”。他支持撤销中国的“永久最惠国”待遇（“永久正常贸易关系地位”），这将使中国与古巴、朝鲜、俄罗斯、白俄罗斯等国家处于同一类别。 与中国打贸易战期间，川普任内两年美国并未出现通货膨胀，期间部分关税高达25%，今后中美贸易战完全不可避免，美国依然很难出现通胀。第一，较低关税可以由中国出口商、美国进口商、中国厂家降价和出口退税解决，而不是转移到消费者头上。第二，中国出口到美国的家电、服装等等都不是只有中国能生产，很多已经转移到东南亚、印度和墨西哥生产，不存在“死了张屠夫，不吃混毛猪”，反倒是中国离开从美国进口高科技产品和芯片等会出现“高科技”产业倒闭、不进口美国农产品造成的猪瘟等。第三，中国反制措施只能伤及自身，比如对唯一生产人工智能显卡的英伟达展开反垄断调查，英伟达供不应求，中国不进口印度东南亚等地完全可以替代，对锑（SB）等稀土限制对美出口，美国已经很久没有从中国进口了，早已组建了美、澳大利亚和加拿大安全产业链和替代原料。 减税和裁员只能削减财政赤字而非增加 很好理解的是裁减政府官僚机构和冗员能减少财政支出，实现财政平衡甚至盈余。一个成功的案例是阿根廷总统米莱对政府部门裁减一半，大量裁减冗员，在到任一年后早已实现（半年内）实现财政盈余。川普的效率部负责人马斯克说要裁减冗员和减少联邦政府部门，把联邦支出每年的6.1亿美元，减少2万亿美元，减少支持三分之一。马斯克收购推特后，把冗员裁减了80%现在的X比收购前效率更高，开支大为减少。 较为难以理解的是：减税可以增加税收。 2021财年（2020年10月1日至2021年9月30日）美国联邦政府财政2021财年美国财政收入约为4.05万亿美元，创造新高，这跟2021年1月20日上任的拜登显然关系不大。 美国独立研究机构联邦预算问责委员会指出，美国联邦财政收入的增加主要得益于2017年川普的减税政策所致。 减税为何能增加税收？第一，减税后，早已全球经济体一体化，当美国或其他市场经济体税率低，而其他经济体税率高，就会出现由税率高的经济体朝美国等税率低的国家转移，扩大了其税基，税率低而税基扩大了；第二，对个人和企业减税后，企业和个人可支配资金增加，企业要么用于扩大再生产、回购自己的股票或者消费掉，这些活动都能增加经济增长；第三，降低税率有利于美国之外的资金和企业回流到美国，这进一步扩大美国税基。 总之，目前世界上对未来的经济、金融现象预测都是才信单一依据，而非全面的、根本上的综合指标，随着国际油价、主要经济体衰退，物价从通胀到通缩是会发生的；随着川普政府的开源与节流并施美国联邦赤字会减少而非增加。 作者贺江兵，中国金融学者，著有《金融的真相》、《经济的假象》《金融的风险》等书。 cna.com.tw/news/acn/20241214…