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Wealth & Economics > Hurrah, the war is over?

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message 1: by Nik (new)

Nik Krasno | 13781 comments Don't tell me it was about soybeans and gas. It seems after a rattling beginning the blitz comes to a swift resolution: https://www.cnbc.com/2018/07/25/trump...
Or maybe not.
Anyways, who won?


message 2: by Graeme (new)

Graeme Rodaughan Junker folded.

Trump demonstrates the key skill his detractors have totally underestimated - the art of the deal.


message 3: by Michel (new)

Michel Poulin Wait until Trump changes his mind...again.


message 4: by Philip (new)

Philip (phenweb) EU - They have agreed to talk about a deal - not a deal itself
N Korea - they have agreed to talk about a deal - not a deal
NATO they have agreed to talk about increasing defence spending - no deal
Putin- they have agreed to... who knows what Trump would or wouldn't do or what they agreed to
Syria - No deal
Turkey - no deal
China trade war - no deal
Canada relations - no deal
Tariffs - no deal they are all still in place and more to come.
Iran - breaks deal
Paris climate change - breaks deal

Perhaps I misunderstand what the word deal means - I'll stick to cards...


message 5: by Matthew (last edited Jul 26, 2018 09:52AM) (new)

Matthew Williams (houseofwilliams) Graeme wrote: "Junker folded.

Trump demonstrates the key skill his detractors have totally underestimated - the art of the deal."


And where exactly was the skill involved? His proposed trade wars are already threatening ruin to American suppliers and farmers, but we're supposed to give him credit for exacting concessions on soybeans. And how did Juncker fold? He made this tiny concession in order to keep the door open on negotiations. Tariffs on cars wasn't even addressed, and that's going to be the biggest hit. Meanwhile, Trump has to give 12 billion in subsidies to US farmers to make up for the damage he's already caused them.


message 6: by Nik (new)

Nik Krasno | 13781 comments Perhaps, it's the art of pressuring friends and adversaries to concessions even b4 a deal: EU, Iran's still bound while US isn't, Kim dismantles stuff (incl. yesterday's fresh report) & so on -:)


message 7: by Nik (new)

Nik Krasno | 13781 comments Matthew wrote: "He made this tiny concession in order to keep the door open on negotiations..."

In some reports, it's also increase of import of gas from the US


message 8: by Michel (new)

Michel Poulin As the Iranian foreign minister said in response to Trump's threats: 'Colorl us unimpressed'. The same here about Trump's supposed deal-making talents.


message 9: by Graeme (last edited Jul 26, 2018 02:30PM) (new)

Graeme Rodaughan By "Deal," I mean more along the lines that Trump will make an outlandish statement, others move and respond, than if he doesn't get what he wants, he either doubles down or walks back to more middle ground.

What results that approach will produce remains to be seen. But it would be ironic if a 'trade and tariff' war resulted in fewer tariffs.

The key will be what China does, and I wonder how far they will devalue their currency to negate any tariff imposition by Trump.


message 10: by Ian (new)

Ian Miller | 9767 comments As far as I can see, bearing in mind how reliable the news is, this is not over - all that Juncker did was to fold temporarily to keep negotiations open. Maybe I misread something, but even if I did, the whole of the EU may not follow, and if Trump hits German car exports, I can't see Germany sitting back and folding.

As for China, I doubt they will devalue, but I think they will try and get as far from the USD as possible. The issue is rather complicated because while there wis a lot of Chinese investment in the US, a lot of US manufacturing is done in China, and in countries that depend more on China than Trump would like. Trump has far from won, and of course there are the mid-term elections to worry about. As prices go up, votes may depart.


message 11: by Graeme (new)

Graeme Rodaughan Ian wrote: "I think they will try and get as far from the USD as possible..."

That's a clear Chinese objective. They have already made strong progress in disintermediating the USD from trade between China and other partners.

They have replaced the US as Saudi Arabia's number one customer and I have to wonder how long it will be before the YUAN is used to trade oil. I.e. a PETROYUAN.

At which point, the USD will be in trouble. (Pending some sort of replacement...)


message 12: by Michel (new)

Michel Poulin Don't expect to see the Chinese to fold in front of Trump. They may keep a polite façade right now, but I am sure that they despise him for the loud-mouthed clown he is. The Chinese leaders will not be ready to lose face in front of their own people by bending to Trump's pressure and they have plenty of financial and economic arguments on their side to win a trade war. With the way he alienated one by one his usual allies and friends, Trump is ill-placed to resist Chinese economic pressure right now.


message 13: by Graeme (new)

Graeme Rodaughan I think your right Michel. China holds too many cards.


message 14: by J.J. (new)

J.J. Mainor | 2151 comments It didn't make sense in the first place...if we're looking at instigating a trade war with China, then we need someone to buy up the exports China stops taking in. If the pain to American companies, farmers, etc. when the purchase orders stop is supposed to be a tool to pressure Trump into concessions, then a secondary market to alleviate that pain removes that bargaining chip from the table for China.


message 15: by Michel (new)

Michel Poulin But Trump effectively cut himself off that secondary market by insulting, attacking and alienating Canada, the EU, Mexico and other countries that could have absorbed the surplus American exports. A totally dumb move on his part, but it will be the average American that will pay for it. As for Trump, he doesn't care: he has his own billions.


message 16: by Graeme (new)

Graeme Rodaughan Indeed he is personally insulated from any shocks unless there is a truly massive real estate crash in New York.... But that's not likely.


message 17: by Matthew (new)

Matthew Williams (houseofwilliams) Graeme wrote: "By "Deal," I mean more along the lines that Trump will make an outlandish statement, others move and respond, than if he doesn't get what he wants, he either doubles down or walks back to more midd..."

So basically Trump will say shit and others will be responsible for cleaning it up. The end result is obvious, Trump will either abandon his claims and pretend he didn't, or he'll double down and inflict damage on the US economy just to prove he's not a pussy. As for China, they could do that, or they could just threaten to call in the US' sizeable debts.


message 18: by Graeme (last edited Jul 26, 2018 11:44PM) (new)

Graeme Rodaughan The Chinese could divest themselves of US treasuries, they have a lot.

A big recent seller was Russia, who have dumped most of their USTs.

However, the Chinese strike me as playing a long game, they could simply wait Trump out (even if he lasts two terms) - he's just a blip on their 100 year plans.

I.e. They'll dump their USTs when it's strategically valuable to them to do so.


message 19: by Nik (new)

Nik Krasno | 13781 comments For what it's worth, my friend living in Shanghai says locals fear trade war with the States a lot and know they'd lose it


message 20: by Graeme (last edited Jul 27, 2018 04:02PM) (new)

Graeme Rodaughan Hi Nik, interesting feedback.

The problem for all of us sitting here pontificating on stuff is the lack of real-world information with which to work.

How many 'friends,' do you have Nik, and how well are they placed?

Are you at the center of vast network of information gathering spies, bots, and infiltrators?

I could easily imagine you as a spy master - you even wear sunglasses...


message 21: by Matthew (new)

Matthew Williams (houseofwilliams) Graeme wrote: "The Chinese could divest themselves of US treasuries, they have a lot.

A big recent seller was Russia, who have dumped most of their USTs.

However, the Chinese strike me as playing a long game, t..."


Yes they could, and the effect on the US dollar would be devastating. And as for your friends Nik, what are they basing that on? What leverage does the US have over China in a trade war?


message 22: by Graeme (new)

Graeme Rodaughan Matthew wrote: "Yes they could, and the effect on the US dollar would be devastating...."

Hi Matthew, I used to think that, but the US FED expanded their balance sheet from <1$T to approx $4T after the GFC and sterilized the impact.

What's another $1T?

I now think the US FED would simply monetize the debt and squirrel it away on their own balance sheet.

Now, from my POV, the US FED is technically and actually bankrupt. But no one calls them on it, and no one is about to. So the charade continues and may well continue for decades.

When I talk about the Chinese dumping their USTs, it will be done to their own advantage, but the impact on the USD is possibly overstated.

The more pernicious impact on the value of the USD is the (bit by bit) removal of the USD from settling international trade. The disintermediation of the USD by the Chinese is a deliberate policy on their part.

Australia was the third country to sign a bilateral agreement to use local currencies to settle trade with China, and a lot more countries have done so.

China is leveraging their position as the linchpin of the global manufacturing supply chain to assert real power to remake the worlds monetary system into a new architecture that will favor them.

That's a process that will take decades to put in place, but will transition in days at the very end.

When the monetary shift happens, it will happen suddenly, and for most people it will be a surprise.


message 23: by Nik (new)

Nik Krasno | 13781 comments Graeme wrote: "How many 'friends,' do you have Nik, and how well are they placed?

Are you at the center of vast network of information gathering spies, bots, and infiltrators?

I could easily imagine you as a spy master - you even wear sunglasses... ..."


-:)
Aimed more at an oligarch with the suit & sunglasses, but a spy master is sufficiently flattering !
I have very good friends whom I'm in regular contact with in LA, NY, London, Kyiv & Israel and also close friends but maybe a little less in contact - in Shanghai & Sydney. One from NY has a wife from Tokyo, so you know - this adds another location... They all, in their turn, travel the world mostly for business fairly regularly. So maybe not a CIA's coverage, but I do get first hand account about life and biz in some places around the globe -:)


message 24: by Nik (new)

Nik Krasno | 13781 comments Matthew wrote: "And as for your friends Nik, what are they basing that on? What leverage does the US have over China in a trade war?..."

Hard to tell, as he hangs out mostly with ex-pats, his children going to American school, but he explains that Chinese economy is still based on most people - maybe 700,000,000 - 800,000,000 earning something like 100 bucks a month. If they earn 200 all of a sudden - it will be a collapse, as such an acute rise of demand won't be satisfied, and if they can't make these 100 bucks it's also a collapse. Yes, Beijing, Shanghai, maybe Macao are very advanced and boast expensive living and lots of opportunities, but the rest of China is much less glorious. So, yes you have Alibaba, Xiaomi, Huawei and few more corps, but still the population, general wealth, technology are still no match to the US.. But the situ is dynamic, so can change quite rapidly...


message 25: by Ian (new)

Ian Miller | 9767 comments I don't think anyone can win in a full fledged trade war, but while China will suffer, as will the US, it is the rest who depend on trade that suffer the most. I don't think anyone in NZ is thinking a trade war would be anything but really bad for us, but the other interesting thing is, if the US is going to put tariffs on us, as they say they will, and China won't, and since we are more a food producer and China and India have the most consumers, guess where we shall have to orient our trade?

As for friends in China, I suspect those who really know the effects won't tell. My daughter in law's father is actually senior in a large Chinese company, so I shall try and find out, but this could take quite some time.


message 26: by Scout (new)

Scout (goodreadscomscout) | 5532 comments It's funny to me to see mainstream media here in US try to make sense of Trump. They shake their heads and say, "No President has ever done this before. This is unprecedented. Surely this time Trump has gone too far, and his base will desert him." They were so surprised when he was elected and, so far, they've failed to prove the election was rigged by the Russians. They refuse to admit that there's half of the population who are sick of sleazy politicians like the Clintons. Trump supporters are willing to stick with a guy who's not an insider, who's sticking up for the US and demanding fair trade. Whatever's thrown at him, his base is going to support him because he's at least doing something different against all odds.


message 27: by Graeme (new)

Graeme Rodaughan The East and West coast elites who disparagingly refer to the rest of the US as "flyover country," have no interest in the 'interests,' of the people who live there.

Should we have been surprised that the 'deplorables,' gave the establishment status quo the middle finger?

I've maintained for some time, the biggest issue the democrats had in the 2016 presidential race was Hillary Clinton's ability to galvanize her opponents base.

I have not seen a politician in my life publically insult (deplorables) half the electorate, especially in an environment where voting is voluntary.

How many electoral college votes did she give away with that one honest remark that was utterly reflective of her core beliefs.


message 28: by Scout (new)

Scout (goodreadscomscout) | 5532 comments Right. We haven't forgotten the "deplorables" remark or her denial of responsibility for Benghazi. When I watched the news report about Ambassador Stevens' death, I cried. He was a good man trying to do the right thing. It still makes me sad. And this was before I watched the hearing. When Hillary said, "What difference, at this point, does it make?" my heart turned cold. That's a bad woman.


message 29: by Nik (new)

Nik Krasno | 13781 comments In an economic sense (which is usually the most practical for most of us), I'd say those working for salaries, small biz and those on the modest side of the income scale should prefer someone like Bernie since a socialist approach gives more return to them from a public spending, while top tier should prefer Trump's policies. This isn't necessarily a US thing and applies generally to socialist/conservative division in many countries. While in practice, I guess, we often see an opposite distribution of support..


message 30: by Ian (new)

Ian Miller | 9767 comments When I heard Hillary wanted to put a no-fly zone over Syria, I hoped she would not get elected. The last thing we need now is war with Russia.


message 31: by J.J. (new)

J.J. Mainor | 2151 comments Nik wrote: "In an economic sense (which is usually the most practical for most of us), I'd say those working for salaries, small biz and those on the modest side of the income scale should prefer someone like ..."

Disagree about Bernie...He would raise taxes to pay for all his socialist policies...sure he would go after the rich, but realistically you can only take so much from them before you have to set your sights on the middle class...he would bankrupt the middle and working class.


message 32: by Ian (last edited Jul 29, 2018 10:03PM) (new)

Ian Miller | 9767 comments Hard to know about that. The greatest US expansion occurred when the top tax rate was extremely high. You had tax rates of 79% (cutting in at 79 M) in 1937, and 92% (cutting in at a little over 1.7 M in 1953) and in 1953 or thereabouts the US was probably as far ahead of anyone else as they have ever been. In 1953 the middle class was probably as strong as ever but they were not paying that. There were 23 tax brackets and 34% cut in from $51594 - 68792. I would argue 34% is not horrible, and $50,000 dollars in those day was a fairly huge income. A new house was $9,550. A new car, $1650 (average in each case. An average wage was $4,000. That is not killing the middle class.


message 33: by Nik (new)

Nik Krasno | 13781 comments J.J. wrote: "Disagree about Bernie...He would raise taxes to pay for all his socialist policies...sure he would go after the rich, but realistically you can only take so much from them before you have to set your sights on the middle class...he would bankrupt the middle and working class...."

Could be, as the middle class is always the easiest milking cow, but it's only theoretic now. Trump's tax reform is on the other side of the scale, so we'll see how it'll work.
On a global scale, socialist capitalist approach works in certain countries like Scandinavian and fails in others like Greece. Politicians' slogans are usually good, but implementing them is a different thing. Striking the right balance and align mentality with actual tax burden and programs that one wants to apply is quite delicate, especially when markets and economic activity in general often depend on 'mood', fears and expectations, rather than cold data and figures...


message 34: by Ian (new)

Ian Miller | 9767 comments The idiotic thing is "business confidence" There was a poll here amongst businesses and they are all wailing that confidence is down, despite the fact that over 80% of them replied that they expected to have a better year this year than last. They dislike a "socialist" government, and overlook the fact that they themselves are doing well, AS ARE ALL THEIR MATES.


message 35: by Michel (new)

Michel Poulin Don't forget that the word 'Socialist' is used as a dirty word by many in the U.S.A., Ian.


message 36: by Ian (new)

Ian Miller | 9767 comments That is true, Michel, and difficult to forget. Their "left" is well to the right of most "right-wing parties" in most other "developed" countries.


message 37: by Nik (new)

Nik Krasno | 13781 comments Well, that's their right to not believe in elements of socialism or not to like it and to believe in Homo homini lupus. We cannot deny that the US way worked quite well for most times, although not for all. US global standing speaks for itself. However, it's hard to tell whether most Americans are content and feel they are a part of this success and celebration..


message 38: by Ian (new)

Ian Miller | 9767 comments The statistics show that wages for the bottom half of Americans have declined since the time of Reagan, and the middle classes seem to have been hollowed out. Some in America have truly benefited, but I suspect an awful lot do not share the fruits of US ascendency. Look at it this way: three Americans have more wealth (at least on paper) than almost the lower half of US citizens. It is working for some, but not exactly all.


message 39: by Nik (last edited Jul 31, 2018 04:19AM) (new)

Nik Krasno | 13781 comments Ian wrote: "Look at it this way: three Americans have more wealth (at least on paper) than almost the lower half of US citizens. It is working for some, but not exactly all. ..."

If they are fine with the draw and personal achievements, then all is good I guess -:) My impression - many in the US believe in their system and that it offers a fair opportunity to live well and even become rich. If they don't succeed they blame themselves not the system. Maybe sort of 'winners & losers' mentality. This belief - my impression again - is based on a notion that 'working hard' is what required for success. This latter notion in modern times is largely a fallacy and working hard in some cases may not even guarantee a decent living, but in other aspects - I think the US still provides a 'tougher' (in a sense of absence of many social cushions existing elsewhere) environment, but much higher returns for those who succeed to survive and make it big time. What some maybe don't take into account - is that slum-dog billionaires are very very few, while those who fail never get their story televised, and all the rest would never make it anywhere near. Thus, believing in existence of a fair chance, is largely - impractical. Any system can be sustainable, as long as a sufficiently large segment makes a decent living and the percentage of those who failed and succeeded is sufficiently lower than the middle class. The problems start if middle/working class thins and/or feels dissatisfied. Hope it's not happening.


message 40: by Scout (new)

Scout (goodreadscomscout) | 5532 comments Sorry, it has happened. The result it Trump. The middle/working class is pissed. That's why you see support for closing the border. Illegal immigrants come in and receive welfare benefits and put a strain on hospitals. Prisons are feeding and clothing illegal immigrants who should be deported. Millions are spent on fraudulent claims for disability and welfare and food stamps. I saw a woman in the grocery store who was told she couldn't pay for dog food with food stamps, and she went back and got steak. I was standing there with hamburger. She left and got in a newer car than I have. That tends to piss people off when 30% of their income is going to taxes.


message 41: by Michel (last edited Aug 02, 2018 07:02AM) (new)

Michel Poulin Scout, there are tax cheats and fraudsters everywhere. We also have our fair share of them here in Québec, believe me. However, the danger is to generalize out of a few cases. Most of those who are on welfare are not there out of their own choice and have had suffered some severe personal setbacks that forced them on welfare (illness, physical or mental handicap, mass loss of jobs in the region, etc.). A good example of such involuntary welfare recipients would be fishermen, people accustomed to work very hard physically in rough condition, or miners, who saw their industry close down (mandatory closures of fishing areas or mine closure). Those people would love to return to work and be productive again, but too often the decision is not in their hands.


message 42: by Mike (new)

Mike Takac | 27 comments Michel wrote: "Scout, there are tax cheats and fraudsters everywhere. We also have our fair share of them here in Québec, believe me. However, the danger is to generalize out of a few cases. Most of those who are on welfare are not there out of their own choice..."

You can’t be a “welfare” state and do nothing about illegal immigration! Before the US became a welfare state, we had open borders with few restrictions. At that time, you come to the US and can’t find a job or create your own business, you starve.


message 43: by Michel (new)

Michel Poulin Mike, by my account the USA is not a welfare state, by a long shot. It still does too little to support its citizens that had the bad luck of having a debilitating accident or illness, or lost their jobs because of 'restructuring'. Canada is basically a socialist state, which does not equate to being a welfare state, and we have a system to filter immigration. I think that you push the 'illegal immigration' rethoric a bit too far.


message 44: by Mike (new)

Mike Takac | 27 comments Michel wrote: "Mike, by my account the USA is not a welfare state, by a long shot. It still does too little to support its citizens that had the bad luck of having a debilitating accident or illness, or lost thei..."

Thanks for sharing your philosophy. I live in the US, and I’m on the dole.


message 45: by Michel (new)

Michel Poulin Then, why are you connecting the 'welfare state' with illegal immigration? What is exactly your point?


message 46: by Ian (new)

Ian Miller | 9767 comments I think Mike's and Scout's point is this: someone, the tax payer, has to pay for the welfare. First law of economics: there is no free lunch. The tax payer may be prepared to pay for all the unfortunate/unlucky people who are US citizens, but not to extend it to anyone elsewhere in the world who wants a better life than where they are. My view is it is wrong for foreigners to criticise US citizens for holding that view as they are the ones that would be paying for it. I also think the EU is going to pay for letting in so many refugees, most of them economic, who have no understanding of European culture nor a willingness to adopt it. That will not end well, and I see no reason why US citizens should not want to avoid similar problems.


message 47: by Mike (new)

Mike Takac | 27 comments Michel wrote: "Then, why are you connecting the 'welfare state' with illegal immigration? What is exactly your point?"

Unchecked illegal immigration will drain the wealth of any “welfare state” to where its currency, or its “Full Faith and Credit,” becomes worthless. That is, only the working population creates a nation’s wealth, not the government.


message 48: by Mike (new)

Mike Takac | 27 comments Ian wrote: "I think Mike's and Scout's point is this: someone, the tax payer, has to pay for the welfare. First law of economics: there is no free lunch. The tax payer may be prepared to pay for all the unfort..."

Good point Ian! In fact nothing is free! Even the air we breathe is not free, for it takes bio-energy to take your next breath and that energy comes from food. Therefore, one must hunt, farm, or buy their food; otherwise, enslave someone else to provide you with food by the tyranny of government.


message 49: by Ian (new)

Ian Miller | 9767 comments Another point for those who say America used to take everyone. What they overlook is that America was essentially terra nova, if you overlooked the indigenous population, which is what the government did. You could always go west and farm, and there was more or less unlimited work open through those developing new land. That doesn't work now. Modern society cannot tolerate throwing people on their own resources to starve on the streets, and since America has been busy exporting jobs, the number of high paid jobs that do not involve skills is diminishing rapidly. There are already many unemployed and some living on the street. Why do you want more?


message 50: by Scout (new)

Scout (goodreadscomscout) | 5532 comments I am more than willing for my tax dollars to be spent supporting people who, by physical or mental disability or old age, can't support themselves. I'm not in favor of my tax dollars being spent on illegal immigrants who work but aren't paying taxes or who are in prison. I'm not in favor of my tax dollars going to people who defraud the system. Just common sense, which seems to be in short supply these days. We need oversight for Welfare, Food Stamps, and Disability programs, and that doesn't seem to exist. I say the least expensive option is to offer a bounty of $100 for a tip that details how a person is committing fraud against the government. The bounty is only paid if the tip produces results. Once fraud is proved, lay it out for the offender and offer the options of being prosecuted or ceasing to collect benefits with no penalty.

For example, a neighbor reports a neighbor who's collecting disability and is working a full time job and being paid under the table by Acme Delivery. Gov't investigator easily verifies this, and the offender is presented with the option of being prosecuted or giving up his benefits. Neighbor gets $100, and the taxpayer saves thousands in fraudulent benefits. What do you think?


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