Raising the debt ceiling, increasing tariffs, pressuring the Federal Reserve, promoting stablecoins—President Donald Trump’s unique ways of addressing America’s financial woes are raising concerns abroad. Germany—the world’s largest creditor nation and the leader of the euro, the dollar’s chief rival—appears especially worried and senses an opportunity.
Debt: The United States has an incomprehensible national debt of over $37 trillion. Its interest payments exceed its military budget. Like others before him, President Trump pledged to tackle the debt problem. But instead of decreasing spending, his budget is bringing more of the same.
Dr. Martin Lück, one of the leading capital market strategists in the German-speaking world, told Spiegel on May 26: “Trump’s policies are fueling inflation, and investors are losing faith that the U.S. will get its debt under control. … What Trump is doing is performing open-heart surgery on the global economy, crafting instructions to total collapse.”
Lück warned at the time that we may be “six months or a year away from a crash.”
One way the U.S. sustains its $37 trillion debt is by issuing treasury bonds, which investors buy in exchange for regular interest payments. But in May, Moody’s Ratings downgraded the U.S. credit rating from a perfect aaa to Aa1. Following the downgrade, Spiegel asked Lück: “Are U.S. government bonds no longer the ‘safe haven’ that people turn to whenever there is a crisis?”
His answer: “In principle, that is still the case, but not under Trump. His disastrous policies are poison for the economy, and that is how the financial markets see it.”
People fear that the U.S. could default on its debt and trigger a massive financial crisis. The only reason this hasn’t happened yet is because enough people still trust the U.S. dollar over alternatives. But this is starting to change. Many investors have started to invest in German government bonds instead.
Tariffs: In 2018, Trump posted on Twitter that tariffs would enable the U.S. to pay off “large amounts” of its debt. Seven years later, in April 2025, Trump began putting that plan into action, which at first caused an economic scare. The Washington Post wrote April 9:
President Donald Trump may have brought the world to the brink of a financial crisis before pausing his tariff war on Wednesday, as the $28 trillion market for treasury bonds displayed unusual strains in the hours before his change of course.
On that same day, President Trump acknowledged, “The bond market is very tricky.” Instead of tariffing almost the whole world simultaneously, Trump has renegotiated trade deals and gradually introduced tariffs. But people continue to fear a global crisis may be around the corner.
Trump believes the fears are unjustified. Earlier this month, he posted on Truth Social: “It has been proven, that even at this late stage, tariffs have not caused inflation, or any other problems for America, other than massive amounts of cash pouring into our Treasury’s coffers. Also, it has been shown that, for the most part, consumers aren’t even paying these tariffs; it is mostly companies and governments, many of them foreign, picking up the tabs.”
Pressuring the Federal Reserve: One way to fight inflation is to keep interest rates high—and that’s exactly what the Federal Reserve under Jerome Powell has done. But President Trump is far from pleased with Powell. Higher rates mean higher debt payments, and if the U.S. spends more paying interest, it has less leeway in its budget. Consequently, Trump has repeatedly pressured Powell to cut interest rates.
“The Fed’s independence is seriously threatened by Trump,” warned financial market expert Christian Röhl, as Germany’s Bild reported on August 24. While Trump may not dismiss Powell, he will likely nominate a successor loyal to him next year. “That would weaken confidence in the dollar and accelerate its gradual loss of importance as a global reserve currency,” Röhl noted.
Jürgen Matthes, economist at the German Economic Institute in Cologne, warned: “If Trump continues to undermine the independence of the U.S. Federal Reserve, he will be undermining a central pillar of the U.S. financial market. Investors would punish it in the long term if they could no longer rely on the Fed to reliably combat inflation.”
But while the Fed so far has stuck to its course, some of Trump’s supporters see the solution to America’s financial woes in cryptocurrency.
Stablecoins: “Stablecoins have the potential to ensure American dollar dominance internationally to increase the usage of the U.S. dollar digitally as the world’s reserve currency, and in the process create potentially trillions of dollars of demand for U.S. treasuries, which could lower long-term interest rates,” said David Sacks, White House special adviser for artificial intelligence and crypto, at a February press conference.
The European Central Bank (ecb) wrote on July 28:
Stablecoins are reshaping global finance—with the U.S. dollar at the helm. Without a strategic response, European monetary sovereignty and financial stability could erode. …
The U.S. administration has made it clear … that its support for stablecoins goes beyond just encouraging technological innovation. The goal is twofold: to protect the U.S. dollar’s global dominance by expanding its use on digital platforms worldwide, and to reduce borrowing costs by increasing demand for U.S. treasuries through stablecoin reserve holdings.
Stablecoins promise to hold the same value as fiat currencies while being traded globally outside the traditional banking system like cryptocurrencies. The most common issuers are private companies such as Tether and Circle. Customers purchase stablecoins most often with U.S. dollars, and the issuers typically invest those dollars in U.S. treasuries. Consequently, stablecoins add demand for treasuries, helping the U.S. government finance its debt.
But if people lose trust in stablecoins, holders rush to redeem their tokens for cash. To meet redemption demands, issuers are forced to sell their U.S. treasuries, potentially flooding the market and causing wider financial disruptions. In that scenario, the outcome Sacks envisions—greater dollar strength and lower borrowing costs—could play out in reverse.
In the meantime, Europeans have reason to undermine the use of stablecoins. As the ecb writes: “Should U.S. dollar stablecoins become widely used in the euro area—whether for payments, savings or settlement—the ecb’s control over monetary conditions could be weakened.”
The euro’s chance: “I have always said that the next financial crisis is bound to happen, we just don’t know when or why,” German Chancellor Friedrich Merz told Handelsblatt in April. “President Trump’s policies increase the risk that the next financial crisis will come sooner than expected. We Europeans need a convincing response to this.”
Lück told Spiegel: “The dollar has not yet imploded as the reserve currency, but thanks to Trump, we are well on our way there. … At the moment, Europe is significantly more attractive than the U.S., and certainly more serious and liberal. The euro can make the leap and become a real alternative to the dollar as a reserve currency. This is primarily the result of Trump’s disastrous policies.”
The ecb agreed, stating that the “current uncertainty also offers a unique opportunity for Europe. … In a world of shifting sands, the euro has the potential to be the bedrock on which others can build.”
Europe is observing America’s financial woes and preparing to come out stronger and more united. This is exactly what the late Herbert W. Armstrong foretold would happen. In 1984, he warned that a banking crisis in the U.S. “could suddenly result in triggering European nations to unite as a new world power, larger than either the Soviet Union or the U.S.”
This forecast was based on a good understanding of the global financial system and Bible prophecies.
The U.S. has been heading toward this crisis for decades. Kicking the can down the road has increased the explosive power of this crisis. Bible prophecy shows the explosion can no longer be postponed. Transgression has reached its full measure, and the world remains unrepentant (Daniel 8:23). We are approaching the most devastating period in human history—and much of it will begin with a financial crisis.
Revelation 17 prophesies that European nations will unite and give their power to an overarching ruler. Isaiah 23 and Revelation 18 reveal that Europe is about to become the center of world trade. A financial crisis in the U.S. could trigger both.
We have to analyze Trump’s recent moves in that light and set aside all prejudices. Read Trumpet editor in chief Gerald Flurry’s “A Financial Crisis Is Imminent,” which explains these prophecies in detail.