Could Donald Trump Go Broke

Could Donald Trump Go Broke?  Or is Donald Trump possibly worried about going broke?

More specifically, is Donald Trump possibly interested in becoming the next president of the United States so that he can force a halt to an impending collapse of the U.S. financial markets and the U.S. dollar?

You keep hearing Donald Trump talking about the poor state of the U.S. economic condition and about how he is evidently pissed off at how America is effectively being railroaded and taken advantage of with one economic compromise after another.  I believe he is sincere about his concern for the state of the U.S. economic condition; and I also believe that he would probably more than love to be able to fix those problems to the best of his ability.

However, I perceive there is likely something running much deeper in the veins of Mr. Trump that is troubling him:  In fact, I believe he may actually be worried about losing his vast financial empire to a total and complete meltdown of the U.S. financial system in the form of future massive hyperinflation and an ensuing collapse of the value of the U.S. dollar.

My first guess is that most people would suggest it’s crazy to think that Donald Trump could actually go broke.  When I say “broke,” I mean flat broke, effectively without much more than a dime to his name. 

Could a man like Trump lose everything?  I don’t mean could he lose everything because he lacked the business skills to protect his wealth under any normal or expected circumstances, but rather could this happen due to exigent circumstances beyond even his control that would leave him powerless to halt a rapid devaluation of his wealth?    

I also don’t mean could Donald Trump go bankrupt in the contemporary sense of the word, since one of his casino groups already went bankrupt a few years back.  Even under any assumption that the Trump Company is close enough to being debt free that he could never run the risk of having to pay more than what his mortgaged holdings are worth (e.g., like the “upside-down mortgage” crisis being faced by millions of home buyers today), could he still effectively lose everything he owns?

The thing is that many people in the general wealth category of Mr.Trump have lost everything to economic collapses throughout history for many hundreds of years.  In the four years prior to the end of World War II, the value of the German mark was about four marks to one U.S. dollar; then four years later Germany was experiencing a rate of inflation at 200-million percent.  In other words, it is common knowledge that people in Germany who had been literal billionaires just a few years earlier were suddenly relegated to being worth nothing at all. 

Even in this most current economic crisis being faced by the world today, it was during 2009 when a former longtime billionaire from Europe appearing to be in his late 60s or early 70s age range was said to have lost all but about four million dollars – and so he committed suicide.

No doubt Donald Trump is a smart man and a savvy business investor.  He also undoubtedly knows a lot more about the intricate workings of worldwide banking and financing schemes than he is taking public: Namely, he would have to know that the monetary systems of the world are highly rigged and engineered systems that are based on a tool-of-leverage principle in which the rich are destined to become richer while the poor are destined to become poorer.  He furthermore would know that the scenario here is quite literally no different than with the Parker Brother’s Game of Monopoly board game whereby the ideal is to financially leverage out the other players in the game.

This is all nothing new: The monetary systems of the world have never been intended to work as a fair and equitable proposition for everyone.  Donald Trump would also know the truth in this sense.  To that full extent, Trump has always maintained his understanding that life really is not fair to most people and that there are far more losers than there are winners in the game of life.  He even said as much on a recent episode of his “The Apprentice” show just before he fired one of the contestants.

Donald Trump has had his financial fingers into a lot of different pies: Most notably, his is a real estate tycoon, but he has also dabbled in selling vitamins; he’s been involved in the World Wrestling Entertainment circuit; he has or does own one or more major beauty pageants; and he also owns golf courses and casinos, which are really just another variation of his real estate holdings.

The one thing that Donald Trump does not have his fingers into is the banking industry, which probably is not due to a lack of interest on his part.  Getting to own a chunk of the banking industry is considerably difficult to do even for many of the wealthiest Americans, since it is so tightly controlled by the U.S. government and the U.S. Federal Reserve Bank, probably including Europe’s World Bank for that matter.

Among the most recent, and possibly even the most current, U.S. billionaires to gain a foothold in the banking industry was Mr. Bill Gates of Microsoft Corporation fame.  As I recall, though, even Mr. Gates had a reasonably difficult time getting approved for business under U.S. banking regulations.  In making the cut, though, possibly that means that Gates is worth a great deal more money than Trump, including that the actual worth of Gates is likely greatly underestimated at a mere $50- to $100-billion.  (If you want my personal guess, I believe it is quite possible that Bill Gates is worth upwards of one trillion dollars, but you can call me crazy if you like.)

The thing about the value of real estate is that it is directly and proportionally hinged to the whims and discretions of how the banking system operates.  This fact is easy enough to point out whereby millions upon millions of home buyers have – and still are – losing their homes due to the most recent collapse of the U.S. banking system and other large financial groups.  (Those banks were, of course, reimbursed by the U.S. government in the form of the famous bailout package, but there are no average Americans being bailed out.)

Whether we are talking about a house, a multi-million dollar hotel or a golf course, the value of the real estate is directly tied to the stability of the financial infrastructure in view of the so-called health of the banking system.  This literally means that both the current value and ongoing appreciation of everything Donald Trump owns in the way of real estate holdings is entirely dependent upon the health and welfare of the U.S. banking system, which also assumes the health of the U.S. dollar.

For the first time in American history, the U.S. credit rating was downgraded about a week ago from stable to negative by the Standard & Poor’s group, thus threatening the apparent real possibility that also for the first time in history the United States stands the potential of losing its coveted triple-A (AAA) credit rating.

Here is the real argument:  The U.S. debt ceiling has been raised more than fifty (50) times since George Washington was president.  It was raised seven (7) times alone during the last George Bush administration.  However, simply continuing to raise the debt ceiling is not going to be any guarantee that the U.S. will maintain its “AAA” credit rating.  If the U.S. continues to borrow substantially more than what it takes in from outside revenues, then the monies it pays back out to its debtors is invariably going to become worth less and less.  At some point, the U.S. would be unable to pay its creditors due to a severely devalued currency no matter how far it decided to raise the debt ceiling.

In short, anytime a country ranks with a substantially poor credit rating, the same thing happens to the country’s borrowing power that happens to you and I when we have bad credit:  We end up paying a whole lot more in the way of interest; and so, too, would the United States end up paying out a whole lot more in interest payments if – or when – it ends up with a bad credit rating.

When the bad credit rating scenario comes into play, then the government is forced to ramp up the money printing presses and flood the market with devalued cash under the theory of working to keep pace with the increased interest rate payments.  The same basic situation happens when you and I end up with bad credit and then we are forced to earn more money in order to pay off our monthly bills; and the first time we are not able to earn more money, then we go bankrupt.

The problem with a government simply printing more and more devalued money to pay its interest payments is that the vicious cycle ends up as one for which the value of each new dollar printed becomes decreased on a continuing exponential level.  At some point, the consequence of hyperinflation kicks into gear, such as with the aforementioned hyperinflation scenario involving the collapse of the German mark in World War II.

A more recent example of truly austere hyperinflation was with the Zimbabwe currency (also called a “dollar”) that occurred between 2003 and 2009 leading up to its inevitable full-scale economic collapse at the end of the hyperinflationary cycle.  It’s been estimated that at the height of its hyperinflationary cycle, Zimbabwe was experiencing an annually adjusted rate of inflation of more than six (6) quadrillion percent.  To put that number into perspective, first comes million, then comes billion, then comes trillion and then comes – quadrillion.

The Zimbabwe government was made somewhat famous for its printing a $100-trillion (100,000,000,000,000) currency note, which was the first of its kind in world history.  An image of the famous bill is pictured here…

If the United States fails to raise the national debt ceiling come September 2011, then that would certainly hasten the destruction process of the U.S. dollar and the U.S. economy.  At the same time, raising the national debt ceiling will not cure anything; and not raising the national debt ceiling will also not cure anything.

There is no cure for this economy; and there never was a cure.  Like I said before, monetary systems are not built to be fair, and they certainly are not built to last forever.

This U.S. economy will fail, and I guarantee it.  No one can stop it from happening; and you can bet there are people who don’t want to stop it from happening even if they could.

Donald Trump can’t stop the U.S. economy and the value of the U.S. dollar from eventually collapsing, and I believe he is intelligent enough to know that he would be powerless to actually stop that from happening in the longer term.  On the other hand, I believe Donald Trump could quite possibly pull off a trick to keep the economy working for maybe another twenty years or so if he were the U.S. president.

I tend to like Donald Trump, and I believe he is a remarkably sincere person even up to and including affecting his own personal demise at times, although never with any serious consequences.  Beyond that, I will vote for “The Donald” if he runs for president.

My first guess is that Donald Trump would not be considering taking a run for president if he believed everything was “coming up roses” with the U.S. economic outlook. 

I really do believe Donald Trump thinks that the situation is serious enough with the overall economic picture that it could potentially cause him to lose ALL of his wealth in an ensuing hyperinflationary scenario of the U.S. dollar – and possibly sooner than later.