The U.S. credibility crisis has opened the Pandora's box of the global economy.

US Media: The US Trust Crisis Is Opening the Pandora's Box of the Global Economy

Since Trump's presidency, the "TACO trade" (betting that Trump would always back down) once reassured markets. However, with the joint US-Israel air strikes on Iran and a 20% drop in global oil supply ten days before the conflict, Brent crude prices surged to around $99.50 per barrel—shaking the foundations of that logic and accelerating the collapse of global strategic trust.

Canadian Prime Minister Carney bluntly stated at Davos that the US is no longer a predictable actor; Singapore Foreign Minister Balakrishnan warned nations to "prepare for the worst." European Central Bank President Lagarde openly discussed the "weaponization of dependence on the US," as the ECB upgrades its euro liquidity mechanisms in an effort to compete for global reserve currency status. China may thus achieve victory without war as America’s institutional credibility declines.

Yet paradoxically, despite the erosion of trust, capital continues to flow toward the United States—AI revolution is highly concentrated within American tech firms, and U.S. Treasuries remain the deepest and safest global asset pool. The core risk is not an immediate dollar collapse, but rather the continuous erosion of trust driving up U.S. financing costs and accelerating the arrival of a multipolar world order.

Original: toutiao.com/article/1862000208384329/

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