After the evaporation of 6.6 trillion globally: A guide to investing in survival based on history

Author: Luke, Mars Finance

In early April 2025, Trump set off a global economic storm with a 10% comprehensive tariff policy. From the failure of gold safe-haven aversion to the evaporation of US stock market value by 5.4 trillion, to the wave of protests and the urgent mediation of the business community, this crisis is like a high-risk game, testing investors' judgment. This article will analyze the logic behind the chaos from four levels: financial chain reaction, Trump's "economic revolution", social and business rebound, as well as historical lessons and investment prospects.

1. Financial chain reaction under the impact of tariffs: Why did gold

fall?

Trump's tariffs were implemented, global stock markets evaporated by US$6.6 trillion, US stocks lost 5.4 trillion in two days, and 400,000 accounts shrank significantly. Surprisingly, gold, a safe-haven asset, failed to survive, falling 1.9% on April 5. What is the reason?

The answer lies in the chain effect of leveraged trading. The high leverage in the futures market amplifies the decline of US stocks, and investors' floating losses triggered a "margin call". In order to avoid forced closing of positions, high-liquidity assets such as gold are sold to supplement margin. Gold ETF holdings plummeted by 2.3% on the same day, confirming this pressure. This short-term sell-off is driven by trading sentiment, not caused by macro trends. When the market stabilizes, funds may return gold, but at present, the logic of risk aversion has been subverted by liquidity demand.

Meanwhile, WTI crude oil fell below $60 per barrel, weakening inflation expectations. Crude oil weighs significantly in the US CPI, and its price decline hedged the price pressure of tariffs, prompting the interest rate futures market to push the Federal Reserve's expectation of a rate cut to five times. In the trade-off between inflation and recession, the Federal Reserve is more inclined to stabilize growth. This reminds investors: short-term safe-haven assets may be under pressure, but the expectation of interest rate cuts may be beneficial to bonds and growth stocks.

2. Trump's "Economic Revolution" and Wall Street's surprise: Hoover's

lesson

Trump has a clear attitude towards the crisis. On April 5, he declared on the Truth platform: "This is an economic revolution and we will definitely win." He hinted that the stock market crash was "intentionally" to reshape the trade landscape. However, this gamble caught Wall Street off guard.

Treasury Secretary Bescent Ben is regarded as a bridge to the financial world, but on April 6, news that he might resign due to a "absurd tariff algorithm". MSNBC disclosed that he only analyzed the situation in the White House meeting, and the decision was led by Peter Navarro, Howard Lutnick and Jamieson Greer. Wall Street has no way to seek help, JPMorgan Chase predicts that US GDP growth will fall to -0.3%, and the recession alarm will sound.

Hoover in history provides a mirror. In 1929, Hoover ignored consortium opposition and pushed the Smurt-Holly Tariff Act, raising the tariff rate to 59%, triggering a global trade war and ultimately exacerbating the Great Depression. Trump's desperate bet today is similar, but his team exchanged a 20% decline in U.S. stocks for the expectation of a 5-time rate cut, and did not trigger a substantial recession (the employment data on April 5 were solid). This fits its weak dollar and low interest rate target, but supply chain breaks and stock price plummets have caused companies to complain. Investors need to be vigilant: short-term policy dividends may conceal long-term risks.

3. Social rebound and error correction pressure: market signals begin to

appear

Market turmoil quickly ignited social anger. On April 6, the "Let Go!" movement swept over more than 1,000 cities around the world, with protesters opposing tariffs, federal layoffs and Musk's DOGE department. On the National Mall in Washington, slogans such as "Penguin Opposes Tariffs" and "Make My 401k Great Again" directly point to the impact of policy on the middle class. Tesla became a target for Musk's alliance with Trump, and the exhibition halls in the United States and Europe were frequently attacked, and boycott sentiment was rising.

The business community chooses more direct actions. On April 5, technology journalist Kara Swisher disclosed that a group of technology and finance leaders went to Mar-Lago to try to "discuss common sense" with Trump. Those who once donated millions of dollars to their inauguration now see Musk as a potential target for pressure in the face of trillions of losses. At the same time, rumors of Becent's resignation and the tariff power bill proposed by Republican Senator Chuck Grassley and others show that internal and external pressure is forcing the Trump team to face a wrong choice. Texas Senator Ted Cruz warned: "Comprehensive tariffs will destroy employment and damage the economy." Policy promoters are facing serious challenges in reality.

4. Learn from history and investment choices: risk aversion or buy at

the bottom?

Is this storm a technical adjustment or a prelude to a substantial recession? The answer depends on policy space and error correction capabilities. The Fed still has about 400 basis points of interest rate cut (assuming the current interest rate is 4.8%), and the interest savings from a 100 basis point cut far exceeds the fiscal tightening of Musk's DOGE sector. If economic data does not deteriorate completely, asset plunge may become a good opportunity to buy at the bottom. However, cuts in scientific research grants (such as NIH) and global retaliatory tariffs may weaken the long-term competitiveness of the United States, and the consequences of the Hoover-era trade war are a lesson for the past.

The political dimension is also critical. The 2026 midterm election is Trump’s hidden concern, and if the majority of the two houses fail, its policies will be difficult. This may explain his motivation to rush to create "results" in the short term. Currently, the Trump team's speed of correction - such as the result of the Mar-Lago talks - will become the weather vane for the next stage. If short-term shocks and long-term goals can be properly balanced, this "economic revolution" may have a turning point; if Hoover's mistakes repeat, the consequences will be unpredictable. Investors may consider the following strategies:

• Short-term: Pay attention to bonds and defensive stocks under the expectation of interest rate cuts and avoid high-leverage assets.
• Medium term: If policy errors are successfully corrected, undervalued US stocks and gold may rebound.
• Long-term: Beware of the escalation of the trade war and diversify investments to emerging markets to hedge risks.

Conclusion

Trump uses tariffs as a chess to try to reshape the economic landscape, but exposes the fragility of his strategy in market fluctuations and social rebounds. The team demonstrates the ability to manipulate the market, but Hoover’s lessons remind us that the cost of being self-righteous can be high. The next step of your investment depends on the trade-off between short-term chaos and long-term trends. Only by understanding the game can you find vitality in a crisis.