How quickly the world changes! It seems like only yesterday US officials were jetting about the planet and going on and on about something they called “rules-based international order” that offered tasty treats to those who followed the rules. Various European and American public figures kept talking up “universal values” or words to that effect: embrace these values and they would accept you into their fancy little club. USAID/CIA was wasting billions on politically destabilizing countries around the world that wanted to go their own way and, in particular, spending a truly gigantic amount of money on the Ukrainian propaganda machine which was pumping out lies and fabrications 24/7 about the ongoing armed conflict there.

And now USAID is shut down, CIA operatives are being offered early retirement and big changes are afoot at the US State Department and other federal agencies. Musk and his minions, deputized by Trump, are taking a wrecking ball to the Deep State. Whatever the result, the US bureaucratic machinery is unlikely to be particularly functional moving forward. All of that US soft power, which made it possible to make most of the world dance to America’s fiddle, is draining away.

People around the world are looking at each other in dumb incomprehension: Is America really over? It probably is: history has turned a corner. The US, which was, not so long ago, a rarely mentioned of corner of the world, emerged from the wreckage of World War II undamaged and as a military, industrial and financial superpower. Fast-forward 80 years and the industrial superpower is now China, the military superpower is now Russia and the US is… still a financial superpower… until next Monday at the very least and probably even longer.

Consequently, Donald Trump is in a huge hurry to reshape the world according to his individual fancy. Trump wants Greenland, Canada, the Panama Canal and perhaps a chunk of Mexico. In attempting to grab chunks of North America, Trump seems to be circling the wagons: the US is pulling out of the rest of the world while scavenging what it can. Its neighbors are an obvious choice geopolitically. There is also still some industry and some wealth to be scavenged from its vassals in the European Union (which will no longer be needed, just like all those laid-off bureaucrats in Washington). The hard work for the scavenging operation has already been done: energy supply from Russia has been successfully disrupted and sky-high energy prices are forcing industry to evacuate Europe — to China and to the US. To paraphrase John Kennedy, “Ask not what America can do for you; ask what you can do for America.” For those who don’t want to help America and want to help themselves instead, there’s BRICS. But most Europeans, as Putin recently predicted, will soon enough “gently wag their tails at the master’s feet.”

Trump wants what Trump wants: all of North America and maybe the Gaza strip where he wants to put up hotels and casinos — Trump hotels and casinos, no doubt — but without any of those pesky Palestinians. None of the surrounding Arab countries will have any of that, but Trump is not one for such minor details: he is a big picture guy. Trump doesn’t want the Ukraine — let Russia handle it; it’s too expensive. Trump doesn’t want Taiwan either: it is part of China and the US economy can’t function without Chinese imports. How about that trade war with China? “Let’s not and say we did” seems to be Trump’s motto as far as that goes.

My mental model of Trump’s mental model of the world economy is two buckets, one up on a shelf, connected by a short length of fire hose. He wants to reduce US trade deficits by imposing tariffs, which will raise prices for US consumers, causing domestic inflation, driving down consumer demand while making debt service even more expensive. Reduced US trade deficits will result in less dollars sloshing back into the giant US financial market bubble, popping it. But don’t blame it all on Trump: the US is, financially, a dead man walking. Federal debt is in runaway mode and attempts to rein it in by cutting federal spending by a few trillion will pop the financial market bubble just as well as tariffs.

The US is no longer a military or an industrial superpower and, after the financial bubble pops, it will no longer be a financial superpower either. Once the US is out of the picture, countries will swiftly move to the BRICS model, trading with each other in their own currencies with no need for a reserve currency. This can happen swiftly because most of the details of setting up digital currency wormholes between central banks have been worked out already and it’s just a matter of signing documents and installing hardware and software. There is just one problem left to solve: finding a suitable universal pricing standard to replace the USD. There is a proposal in the works called The Unit; we’ll see what develops. Has Trump been told of this and, if so, has he understood the message? Perhaps not: he promised 100% tariffs to anyone who doesn’t trade using the USD. Has he been told that BRICS nations already trade with each other mostly using their own currencies?

To sum it up, a major shift has occurred: the US has lost the use of its soft power and now attempts to rely on hard power alone. Soft power, as represented by USAID, was clear right from its name: the US offered to “aid” those who would do its bidding. Hard power attempts to use the opposite approach: the US offers to hurt those who would not do its bidding. Soft power is the cheap option: finance some NGOs, organize some demonstrations, provide training to some political figures and so on. Hard power is the expensive option because no matter how it is wielded, it causes damage to both the US and to its target. Consequently, hard power is not a good choice for a former superpower that has lost its industrial and its military supremacy and is attempting to ride a financial bubble for as long as possible.