The Hamilton Tunnel

What are you going to do when everything in your life costs 25% to 50% more?

It’s happened in America before. And it just might be coming back by way of an economic playbook with its roots way back in 1791, when America was barely a teenager.

But first some good news…

If you read yesterday’s dispatch, you’ll know I said the 2030s will unleash a brighter day for America… a manufacturing and jobs renaissance tied to the US dollar relinquishing its role as global reserve currency.

But I also said the road from here to there runs through a dark and painful tunnel.

We’ll call it the Hamilton Tunnel.

You might have heard the name Hamilton tossed around recently. He’s the dude on our $10 bill, Alexander Hamilton, America’s first Treasury Secretary. And today’s Treasury Secretary, Scott Bessent, has been invoking Hamilton’s name in speeches all summer.

The reason bodes ill for your wallet.

Back in 1791, young America was still hooked on English money and English goods. Hamilton looked at that situation and fashioned a plan to, well, Make America Great For The First Time.

He proposed tariffs to protect American factories. A national bank to control American credit. Turning Federal debt into a strategic weapon. And deliberately making imports more expensive, so that Americans would buy American as a way to boost domestic production.

Hamilton was blunt about the real cost of his plan. He wrote that it would raise prices for American families, but he considered inflation the necessary price for building a great country.

Now, 235 years later, Hamiltonian Economics is having another day in the sun.

Back in June, Scott Bessent stood at the Economic Club of New York and quoted Hamilton’s words: that every nation ought to endeavor to possess within itself all the essentials of national supply.

Translation: America has to make its own sh*t again.

And if that costs you more at the register, so be it.

Here’s how that relates to our currency…

The issue here is that the dollar’s role as the global reserve currency started off as a blessing—it allowed America’s middle class to thrive for 50 years.

But that blessing was always going to turn into a curse—the Triffin Dilemma, which I explained in yesterday’s dispatch. That’s where we are today—on the wrong side of the dilemma, a decimated manufacturing sector and a middle class losing rungs on the ladder of success.

Two months after Bessent’s speech, a video surfaced of Vice President JD Vance, on stage, microphone in hand, at an event back in 2023. Here’s what he said: “I am not sure that I think the reserve currency is actually good for the United States of America. It allows your consumers to consume very cheaply.”

That’s America’s #2 politician telling Americans that cheap groceries at Super Walmart and that $250 fifty-inch Samsung at Best Buy are a pox on the American economy… and he wants you to pay more… never mind that your paycheck is already under undue stress.

Bessent and Vance, however, are just the puppets on the end of a string. The puppet master is a man most Americans have never heard of: Stephen Miran… a former member of the Federal Reserve Board and Trump’s former head of the Council of Economic Advisors.

Miran wrote the blueprint for reviving Hamiltonian Economics in modern America.

It was called the Mar-a-Lago Accord… and the plan was covered quite widely—including by me—early in Trump’s second term.

The plan is this: force Japan, Germany, South Korea, China, and others to eat the losses of restructuring the dollar… force them to replace their existing US debt with 100-year bonds that pay below-market rates so low that it’s essentially a debt-default dolled up in pretty clothes.

The plan also demands that foreign currencies rise in value against the dollar. And it charges countries a fee to hold American debt.

And all of that is backed up by tariffs and the threat of pulling American military protection if countries won’t play by these new rules America unilaterally imposes. You see aspects of the plan are already in motion…

The plan weakens the dollar on purpose. Which means it weakens your wallet by design—and it doesn’t care.

To the Hamiltonian proponents, this is the only way to bring the factories home. And the only way to force the Federal Reserve to work for Americans first.

But this is where it gets really, really dark for you and me.

Everything imported into this country gets more expensive. Not for a few months. I mean structurally more expensive every day going forward.

Your morning coffee at Starbucks or McDonald’s or Dunkin Donuts re-prices permanently and sharply higher because just about every coffee bean in America is imported.

The same math spills out of your medicine cabinet because more than 80% of the active ingredients in your generic prescriptions come from India and China.

It hits electricity. Uranium provides 18% of the electricity Americans consume, and about 99% of the uranium American power plants use comes from Canada, Kazakhstan, and elsewhere.

It hits your food costs on every supermarket aisle because America imports about 40% of its overall fertilizer needs—including 95% of its potash, coming from Canada.

These are not small price increases I’m talking about.

This is prices shooting up 25% to 50% quickly as the dollar falls fast.

Side note: The Reagan administration signed the Plaza Accord in 1985 in an effort to undermine a dollar that was way too strong. Within two years… the dollar was down 50% against other world currencies. This time around, the pain is far worse. The Plaza Accord was negotiated on cordial terms with five countries. The Mar-a-Lago Accord will not be so cordial… not when you’re forcing pretty much every country in the world to take low-yield, 100-year bonds and then pay a fee to hold them.

Fifteen years ago, I was in Athens during the Greek debt crisis. I watched an elderly woman approach an ATM after waiting in line for more than two hours. When she finally reached the machine… it was out of money because of currency constraints the Greek government had put on the economy.

She collapsed to her knees and started crying because she had no idea how to pay for food for her family that day.

That’s what the Hamilton Tunnel looks like from the inside.

Every American family, hit at the checkout register, every day, for years.

To the people designing financial resets like this, all of it is just numbers on a spreadsheet. But out in the real world, it’s a crying grandmother who doesn’t know how to afford food.

The brighter 2030s I wrote about yesterday is real. A better America. A better currency.

But like I said, the road from here to there will be dark.

As JD Vance said, getting to those brighter days will require sacrifice.

Question is: Are Americans willing and able to make a sacrifice that big?