Cnn
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CEO of Citadel, Ken Griffin, a billionaire supporter from President Donald Trump and megadonor of republican candidates, had unusually tough words for the president on his trade war: this harms the American position in the world and by eroding the brand of the nation.
“The United States was more than a simple nation. It is a brand. It is a universal brand, whether it be our culture, our financial strength, our military force, etc., America has exceeded the simple country,” Griffin told Semaord Economy Summit on Washington on Wednesday. “It was like a suction for most of the world. And we are eroding this brand at the moment. ”
Griffin, founder of one of the greatest hedge funds in the world, said traders were concerned about the parking of their investments in the United States – in particular the US Treasury obligations – because Trump prices have destroyed the faith that America will remain an actor of confidence and rational in the global financial markets.
“If you consider your behavior as a consumer, how many times do you buy a product with a brand on it because you trust this brand?” Said Griffin. “In the financial markets, no brand compared to the brand of American treasury bills – the strength of the US dollar and the strength and solvency of American treasury. No brand got closer. We have put this brand in danger. ”
The bonds of the Treasury have historically been the ultimate failure of the hatches, supported by full faith and the credit of the American Treasury. When things become difficult, investors generally turn to perceived security of the bonds of the Treasury to park their investments while more risky and more volatile shares fall.
But that has not happened in recent months. While Trump’s trade war has intensified, investors feared that the United States could inflict significant damage to the world economy-but even more damage to its own economy and perhaps irreparable damage to its own reputation.
The CEO of JPMorgan Chase, Jamie Dimon, made similar comments in his annual shareholder letter earlier this month. Dimon said that the American “extraordinary position” in the world has been built on the strength of its economy, its soldiers and its morals. But Trump’s “America First” foreign policy could undermine the United States’s special position in the world.
“America is first of all good, as long as it does not end up being America alone,” said Dimon. “If the military and economic alliances of the Western world were to be fragmented, America itself would inevitably weaken over time.”
Griffin Wednesday compared the American brand to a famous seamstress, a well -made handbag or a reliable car manufacturer. But if the companies that make these brands have a public scandal, Griffin said that reputation damage can be almost impossible to repair.
“You know, you can buy like a similar nameless dress for less money, but you want the dress which, in your opinion, will not collapse in two weeks,” said Griffin. “It can take a long time – for a very long time – to eliminate tarnish on a brand.”
Investors have turned their back on American assets. This week’s dollar has reached its lowest level in three years. American crude oil has dropped because investors fear that demand could greatly flow into a recession. Treasury yields, which are negotiated in an opposite direction to prices, have increased in recent weeks. And American shares, despite a recent two-day rally, have always erased nearly 7 billions of dollars of market value since the peak of the stock market has reached mid-February, according to the S&P Dow Jones indices.
Griffin said it shows that Trump and his advisers have mass for them to rehabilitate the harmful of the damaging trade war.
“The President and the Secretary of the Treasury and the Secretary of Commerce must be very thoughtful that when you have a brand, you must behave in a way that respects this brand which strengthens this brand,” said Griffin. “Because when you tarnish this brand?” It can be a whole life to repair the damage that has been caused. ”
