In a somewhat ironic twist, President Donald Trump repeated his long-standing warning that a Midterms victory for the Democratic Party would cause a crisis akin to the Great Depression at an October 10 rally in Clarksville, Tennessee.
During his speech, the commander-in-chief claimed extraordinary success of his economic policy, stating that his administration is helping the U.S. bring in trillions of dollars before alleging that a Democratic majority would put an end to this boom.
“I said tariff is my favorite word. We’re getting rich because of tariffs…We’re taking in trillions and trillions of dollars,” the President boasted before adding: “The Democrats’ policies won’t allow that to happen. So they can’t make a promise like that because if the Democrats win, you will have a 1929-style economic depression. And I’ve been great.”
Notably, the budget deficit soared to nearly $2 trillion during the fiscal year that ended on September 30, and President Trump’s second term added $4 trillion to the national debt, per the data Finbold retrieved from the US Debt Clock website and from the same source via the Wayback Machine .
For comparison, President Joe Biden’s administration added roughly $8.5 trillion to the burden for the annual average of approximately $2.12 trillion. The billionaire Republican’s yearly average, by press time, stands at about $2.23 trillion.
U.S. debt in January 2025 and October 2026. Source: US Debt Clock and US Debt Clock via the Wayback Machine
What caused the Great Depression?
Meanwhile, the commonly cited causes for the Great Depression and the 1929 crash added an additional degree of irony to the commander-in-chief’s warnings.
Specifically, the crisis is believed to have been rooted in an unsustainable and unprecedented stock market rally pushed higher by leveraged bets paired with high degrees of inequality that diminished the consumers’ purchasing power.
It was later exacerbated by the tariffs placed under the Smoot-Hawley Tariff Act, which – while designed to protect American farmers – led to retaliatory measures that hampered global output and trade.
Additionally, the early 1930s brought a series of severe bank runs that added to the crisis, while the inflexibility of the widely employed Gold Standard – maintained in part by a drop in money supply and interest rate increases – helped spread the economic Depression.
Is President Trump already causing a 1929-style crash?
Back in the XXI century, tariffs have been one of the most recognizable elements of President Donald Trump’s economic policy and have – through multiple rounds and much turbulence – triggered several trade wars with America’s traditional trading partners and strategic allies, with Canada being the latest to take the spotlight .
A soaring stock market has been another key feature – and one that the commander-in-chief has repeatedly highlighted – with the S&P 500 being close to all-time highs (ATH) and at 7,805. The Dow Jones Industrial Average (DJIA) meanwhile retraced from the August ATH but remains, at 51,670, far higher than in any previous year.
S&P500 and DJIA all-time charts. Source: Google
However, these numbers also serve to obscure heightened inequality, with data from the Federal Reserve Bank of St. Louis showing that the proportion of assets held by the wealthiest 1% has been on a seemingly unstoppable ascent while the bottom 50% – half of all Americans – saw a fall to historic lows close to 2%.
Top 1% and bottom 50% owned assets change charts since 1989. Source: FRED
Global Trade slowdown worsened the Great Depression; Is Trump causing a similar downturn?
Simultaneously, military action taken by President Trump’s administration has also been exacerbating the cost-of-living crisis of the 2020s , as the early 2026 attack on Iran and the subsequent conflict pushed the prices of oil and related products higher .
Diesel in particular found itself in the headlines as the national average price hit record highs and even led to an unexpected trade agreement with Russia .
Reflecting on the matter, the President has repeatedly claimed that oil prices will plummet after the Midterms but is also allegedly preparing the next round of strikes against Iran.
The two appear irreconcilable given both the damage the previous active phases of the Iran War caused to the global fossil fuel – and other critical goods such as fertilizer – supply, relevant infrastructure, and, more recently, Saudi Arabia’s apparent inability to defend its facilities against Yemen’s Ansar Allah (Houthi) movement.
Crucially, this movement is in possession of only a part of the country, which is one of the poorest in the world, has been under various attacks , restrictions, sanctions, and blockades for over a decade, and is locked in a civil war with multiple other factions in the Gulf of Aden nation.
Despite the seeming imbalance of power, Ansar Allah has been successfully retaliating against Saudi Arabian airstrikes by hitting targets such as airports and Aramco facilities in the kingdom.
Yemen’s relative success against a far wealthier neighbour that is allegedly receiving military and intelligence support from Israel, the U.S., Pakistan, Turkey, and France arguably bodes ill for the next hot phase of the conflict against Iran.
Still, despite remarking on oil prices, it is possible that the President is not accounting for the wider cost-of-living crisis in his assessment, considering he has previously dismissed the affordability concerns as a largely fabricated Democratic talking point.
Bond yields harbinger a credit crisis despite Trump’s interest rate goals
Elsewhere, while the Gold Standard was abandoned decades ago and the commander-in-chief has been vocal about his desire to bring interest rates lower, seemingly disconnecting his approach from the conditions ahead of the Great Depression, the global bond markets have been tumultuous in 2026.
Specifically, despite the Fed engaging in only minor interest rate increases, the U.S. long-term bond yield has been soaring , bringing the costs of borrowing higher for the Federal government.
Furthermore, the French and German government bonds – as well as those of multiple other major nations – have also seen significant sell-offs and yield increases , meaning the potential crisis is already global.
Red or Blue, are President Trump’s warnings about to come true?
Lastly, some of President Donald Trump’s warnings about the Midterms might, nonetheless, prove true, regardless of who wins the vote.
Many of the trends that have created an uncomfortable mirror to the financial conditions ahead of 1929 have been mounting for years, if not decades .
For example, FRED data shows that inequality has been rising since the mid-1990s, with the top 1% recording continuous gains for more than 30 years and the bottom 50% growing poorer with little reprieve since 1996.
Similarly, the U.S. stock market has been in a nearly unbroken bull market – partially fueled by interest rates kept close to zero – since the end of the Great Recession , and the notion of an artificially sustained ‘Everything Bubble’ has existed for roughly a decade .
Is the AI ‘boom’ about to crash the global economy?
Likewise, one of the fixtures of 2026 – the artificial intelligence ( AI ) ‘boom’ turning into a dangerous AI ‘bubble ’- arguably traces its roots to the previous century and has already started under the Biden Administration.
More alarmingly, recent news and analyses coming from and regarding the sector appear to back the notion that voters will have selected a new economic crisis whether the blue tsunami overwhelms the red wall or not.
Indeed, various analysts and captains of industry appear to have started warning that the current cycle is unsustainable.
Perhaps the most explicit sign of this narrative change came earlier this week when Broadcom (NASDAQ: AVGO ) CEO Hock Tan opined that big tech has attracted ‘investors whose strategies resemble those of gamblers.’
Anthropic CEO Dario Amodei also explained earlier in 2026 that his company is entirely dependent on meeting its ambitious financial goals exactly, stating that, if the revenue expectation-based commitments stand at $1 trillion and only $800 billion in sales is achieved, the firm is all but guaranteed to collapse.
Notably, an August Barclays note appears to indicate the banking giant estimates that meeting the necessary goals is impossible.
BARCLAYS DESK:
“.. I’ve yet been presented with a credible framework as to where this money is going to come from ..” pic.twitter.com/b86i8s4KEZ
— Carl Quintanilla (@carlquintanilla) October 11, 2026
Warning signs for a 2027 financial crisis mount as 2026 enters Q4
Other venerable institutions and individuals also appear to have, in recent months, taken a more bearish tone. BlackRock (NYSE: BLK ) reportedly urged investors to decrease their exposure to the AI sector, and the famed hedge fund manager Paul Tudor Jones predicted 2027 will be a challenging year for the market.
The artificial intelligence boom also bears other stark similarities to the lead-up to the Great Depression. Much of the infrastructure buildout is being financed on the assumption that companies that are neither profitable nor have a clear path to profitability will be able to pay hundreds of billions of dollars before 2030.
The trend has been most evident in Oracle (NYSE: ORCL ) – a company possibly most dependent on OpenAI turning a profit in the near future – suffering a credit rating downgrade during the summer, but is also visible in hyperscaler s seeing a severe drop in their free cash flow.
Additional signs that the economy has – in part due to the AI ‘boom’ – been bucking came with the early 2026 private credit crisis and Google’s (NASDAQ: GOOGL ) June equity raise – the firm’s first such move in multiple decades – among others.
Lastly, while there is no guarantee history will rhyme, let alone repeat, the dramatic sell-off in the heavily leveraged South Korean stock market might be presaging trouble coming in the U.S., as it has in several previous crises, including the Dot-com crash .
Featured image via Shutterstock
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