Tariffs, Inflation, and the Death of Globalization with Alex Krainer, Ep #69

Upthinking Finance™ is now trademarked

It’s a pleasure to welcome back to the show, Mr. Alex Krainer, a highly respected expert in finance and economics. A former hedge fund manager and portfolio manager, Alex is also the founder of I-System Trend Following, an innovative strategy focused on market trends. 

He’s authored several books on market dynamics and economic trends, and his insights are in high demand, often featured on podcasts worldwide. Beyond his professional success, Alex is a devoted father of two. Today, we’re excited to have him return to share his expertise and valuable perspective with us again. 

You will want to hear this episode if you are interested in...

• Welcome to Upthinking Finance (00:00)
• How can tariffs be inflammatory (01:50)
• Impact of FIAT currency manipulation (05:45)
• Weak currencies of other countries (09:00)
• Could tariffs lead to something better? (15:50)
• Is globalization dead? (23:00)
• Remove emotion out of investing (35:04)
• Why you should follow trend investing, now (41:20)

How Tariffs Can Be Inflammatory

Is it beneficial for commodity-driven inflation? Does a weak dollar mean a better market? Alex shares with us how tariffs can cause inflation because they raise the price of imported goods, and domestic companies often raise their prices because they face less competition. Plus, without cheap imports, the pressure to keep prices low disappears, leading to higher costs overall.

He explains that while tariffs could theoretically weaken the dollar and make U.S. exports cheaper, he is skeptical about how much this will benefit the U.S. economy because other major currencies are also weak. He also believes that the real impact will be on commodity prices, potentially leading to inflation and that the broader global economic situation makes the future outcome uncertain. 

Death of the Global Market?

Alex forewarns us that globalization, as we know it (especially the version driven by powerful corporations, elites, and big banks), is either dead or in its dying agony. Essentially, the model where large multinational corporations and too-big-to-fail banks controlled global trade is no longer sustainable.

However, Alex doesn’t believe globalization itself is completely gone. He sees a new form of globalization emerging, driven by entrepreneurs and technology. It’s decentralized, more accessible, and allows ordinary people to create businesses and jobs globally. While the collapse of the old systems may be messy, it’s giving way to a new, hopeful future that’s just taking shape. This new globalization is more personal, meaningful, and decentralized. It allows ordinary people to connect worldwide, create value, and improve their own lives without relying on big corporations. Alex believes this shift is liberating because it gives people more control over their futures, allows them to innovate, and helps them transcend the old, corporate-driven systems that have dominated for so long.

Why Trend Investing is Important Now

Alex advises that following trends has always been the most reliable way to make money in the markets. Trends reflect collective human psychology. For example, when people see housing prices going up or a company succeeding, they tend to jump in, further driving up the value. These trends can create big investment opportunities.

One key point Alex makes is that long-term trends are the most powerful drivers of investment success, and those who ride trends tend to do better than most investors who focus on predicting short-term market movements.

In terms of practical investing, Alex suggests diversifying across multiple markets like energy, metals, commodities, and stocks, and capturing trends when they happen. This approach has...