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Old 06-21-2018, 04:21 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,730
Trade war NOT predictable

The entertainment du jour is the trade war. Bretton Woods made the dollar the reserve, anchored to gold. The anchor chain was broken. If a State wanted to sock away reserves, it had to have dollars. It could only get dollars by manufacturing stuff and, undercutting American prices. Under this kind of competition, manufacturing couldn't compete and, left the country.
If America lays on enough tariffs, American manufacturers could be competitive again. 50% of the cost of everything that you buy is for finance so, price competitiveness will be very elusive. Besides that, the bankers use your savings to buy up EVERYTHING. Then, you buy it from the bankers.
The Smoot-Hayley Act raised tariffs and, reduced world trade by 50%. Nobody won.

Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy"
China cuts US investments by 92% amid escalating trade war

"Approximately 88 years ago (in June 1930), American lawmakers did exactly what the U.S. is doing today – they enacted the now infamous Smoot-Hawley Tariff Act 1930 – and raised tariffs on hundreds of goods imported into the U.S. According to one quantitative assessment, these measures reduced U.S imports by over 40%, sending the world’s trading order into a tail spin. "
"Based on 2017 steel import figures compiled by the U.S International Trade Administration, the top eight economies (in order of magnitude) most likely to be disrupted by the 2018 steel tariffs include:

South Korea
Canada: Prepare for a bloody trade war!

EU To Launch Counter-Tariffs Against US On Friday
India Prepares Duty Hikes On More Goods In Retaliation Over Trump US Tariffs
German Automakers Call For End To EU-US Car Import Tax - Reports

Escalating Trade War Between Trump US & China Sends Shock Waves Through Markets
'Belligerent' US Trade Policy Toward China Will Damage Iconic American Brands

"With over $50 trillion in non financial domestic debt, every 100 basis point ( 1/10 of a percent ) increase in rates produces a $500 billion economic drag."
The yield curve continues to flatten – underscoring the fragility of domestic economic growth.
"The new US tariff will be imposed if China goes ahead and implements its new tariff on American goods, announced last week, the White House said, adding that trade between the two countries “must be much more equitable.” China is currently running a $376 billion surplus in trade with the US, according to the White House.

If Beijing choses to continue its tit-for-tat tariff policy with the US, Washington will impose further tariffs on imports from China in addition to the $200 billion announced, the statement warned."
"French President Emmanuel Macron called the tariffs “not only criminal, but a mistake,” adding, “Economic nationalism leads to war.”
So, the frogs are going to invade.
"Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and an “affront” to Canada, describing the announcement from Washington as “a turning point in the Canada-US relationship.”
Said the wanker with no leverage.

Italy is in very bad shape,
Depending on how you view the numbers, America has a $1.4 trillion trade surplus.
Mixing tariffs with duties,

"ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing"

Russia dumped a bunch of U.S. sovereign debt. This raised bond yields. Remember that everything crashes if bond yields go north of about 3.5 %
This seems to have been a test-run to see how weak the bond market is. China has lots of bonds that they could dump if they thought it necessary.
Currency wars and inflation-targeting always take money from the worker.

Last edited by Danny B; 06-21-2018 at 04:31 AM. Reason: Mo info
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