Tariffs, Greenland, and a Sinking Feeling

by

My aunt Carol sends me stock tips. Carol, who still believes Y2K was a government conspiracy, and whose investment strategy involves choosing companies based on their logo color. So, when she called, breathless, about “the tariffs,” I braced myself. It wasn’t a recommendation, exactly. More of a panicked assessment. Apparently, she’s convinced President Trump is single-handedly dismantling global trade, one brightly colored import at a time. And honestly? Looking at the numbers, I’m starting to think she might be onto something.

The S&P 500, despite all this, managed a 14% climb last year. Which is… encouraging, I guess. Though I’ve learned not to trust anything that goes up for too long. It always comes down. Like my optimism. The problem is, the administration insists these tariffs aren’t actually costing us anything. That exporters will just… absorb them. Goldman Sachs, bless their heart, did some digging and found that, no, we’re paying. Eighty-two percent of those tariffs, collectively. And by next July, they estimate it’ll be sixty-seven percent just for us, the consumers. It’s like a hidden tax, cleverly disguised as economic policy. I tried explaining this to Carol, but she was already halfway through a rant about the dangers of imported cheese.

Then there’s the manufacturing boost that hasn’t quite materialized. The Institute for Supply Management says things are… contracting. For ten months straight. Ten! That’s almost a year of not making things here. And the jobs? A paltry 584,000 added last year. Compare that to pre-pandemic numbers, and it’s… underwhelming. I remember my college roommate, a relentlessly optimistic economics major, insisting that tariffs would “reshore” jobs. He’s now selling timeshares in Florida, which feels… symbolic.

But the real kicker? Greenland. Apparently, the President wants to buy Greenland. From Denmark. A country that has repeatedly, politely, but firmly, said no. It’s like trying to buy a neighbor’s cat. With a credit card. And then threatening tariffs when they refuse. Last weekend, he threatened new tariffs on eight European allies until Denmark relents. Ten percent in February, jumping to twenty-five percent in June. It’s a level of negotiation I usually reserve for haggling over antique spoons. The EU, predictably, is threatening retaliation. A hundred billion dollars worth. It’s a trade war within a trade war, and I’m starting to feel a little seasick.

Federal Reserve researchers, after reviewing 150 years of data, have reached a stunning conclusion: tariffs raise unemployment and lower GDP growth. It’s almost… shocking. Like discovering water is wet. But here we are.

And the S&P 500? It’s reached a valuation level not seen since the dot-com crash. A CAPE ratio of 39.9 in December. Which, apparently, means we’re officially in bubble territory. The numbers suggest that historically, when the index reaches this level, returns aren’t great. One year out, an average decline of 4%. Two years? A whopping 20%. Of course, everyone’s talking about AI and future earnings growth. As if a spreadsheet can magically erase bad decisions. I’m not convinced.

So, what does this all mean? I’m not a financial advisor, and honestly, I mostly just try to avoid looking at my 401k. But it feels like a good time to reassess. Maybe sell off anything you’re uncomfortable holding. And definitely create a cash cushion. Because when things go south, they go south fast. Like my aunt Carol’s investment advice.

Read More

2026-01-21 11:22