China trade war
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Started by wglassfo - Oct. 27, 2018, 3:51 p.m.

Has anybody considered that the Trump trade war with china hasn't a hope in Hades of winning. Trump spews bluster, ego and nothing else. XI just smiles and waits., whilst building trade ties with huge population parts of the Eurasian world.

 Trump will cause untold hardship on fellow americians with higher prices and lost markets, ego and no sense of what china can do in maybe 10 yrrs

No argueing the issue of higher prices and lost markets. Is it worth it. I hate it when I look at next yrs corn and bean prices, that will be priced for delivery in in 2020. That was a real smart move, but the USA taxpayer will foot the 12 billion dollar bill. Have you ever heard of robbing Peter to pay Paul??

True china will have problems but you can bet, china is not like the USA

Now ponder the fact the USD now makes up only 62% of the world currency, who has it and who is making deals to not use the USD. And I don't mean SA countries.. If you can't see the ramifications of just that one little item, I give up

I already told you my take on the stk market well in advance

Keep on drinking the Kool Aid

By the way

Hillary would have been worse



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By cfdr - Oct. 27, 2018, 4:46 p.m.
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Has anybody considered that the Trump trade war with china hasn't a hope in Hades of winning.

.....

True china will have problems but you can bet, china is not like the USA


So, Wayne, in these turbulent times, where is the money flow coming from and going to??  Is China considered the safe haven??



The Donald has been doing this for two years now - don't you think people should by now see what it is he is doing?  (After all, he did it to Justine Trudeau, didn't he?)

https://tinyurl.com/ycre2njq

The North American Free Trade Agreement (NAFTA) is dead. Mexico and Canada have folded. A new agreement, the United States-Mexico-Canada Agreement (USMCA), will replace it. While the new agreement maintains the integrity of the North American market, it dramatically changes the rules and tilts the playing field in favor of the United States.

Remember when the "wisdom" was that change to NAFTA was impossible?

All eyes now shift to the ongoing trade war between the United States and China, the world's two largest economies. Here the news is even better. We have already won.

Now, I fully expect you to argue about this conclusion, but I have watched The Donald set up negotiations far far in advance to overcome impossibilities.

Even if there is no agreement with China for the foreseeable future, what is the other option??

https://tinyurl.com/yb4j88va 

“At the Pentagon, military brass have historically sought a relationship with their Chinese counterparts that would survive political mood swings. Even there, senior officials say they have reached their limit,” the Wall Street Journal wrote. Another way of putting that would be that China is the party worried about political mood swings for the first time.

All of this is a prelude to the summit between Trump and Chinese President Xi Jinping scheduled for November. U.S. officials are making no secret of their expectations.

Trump is doing what he does best - set up negotiations.

https://tinyurl.com/ybtg3ckw

Again, what other options (realistically) do we have??

“China isn’t buying in Brazil. China is buying Brazil,” Bolsonaro said. “Are you willing to leave Brazil in the hands of the Chinese?”

Whose money do you think China is using to "buy Brazil"??

Where do you imagine the road we have been on leads to, Wayne?

By wglassfo - Oct. 27, 2018, 11:35 p.m.
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The reason the USA had such a strangle hold on the world is something called SWIFT payments denominated in USD. I mentioned the 62% factor, which means this strangle hold is slowly fading away.

China is working hard on the Silk road. Few of us know the ramifications of this trade route, both by land and by sea. China will eventually reach 3 plus billion people. Eventually with Russian and other countries they will have a trade pact within themselves of about 3/4 of the population, if the numerous countries signed on as watching [for loss of an appropiate word], decide to join the trade pact

Trump has made an enemy in European trade issues That means the whole width from Europe to the Chinese shores could reject the USA. Think the Russian pipe line for gas. The thing that currently bedevils this trade pact is a common trade currency for payments. Russsia, china and India are trying to find common ground. China recently opened the oil contract and are feeling their way along a method of payment. China is the worlds biggest gold miner. Russia, india and china have been aggressive gold buyers. Something may be brewing I don't know.

Africa enters the equation as the source of raw materials, Iran and russia are the leading exporters of energy to the eastern market. Trump has effectively shut off this flow of energy, thus these countries look eastward for markets. If Saudi joins?? then what happens??

When you look at it, you have a huge part of the world that is self contained and does not need the USA

The only stick the USA has at present is the reserve dollar.

Given time the reserve dollar will be replaced, one way or another. No currency dominates for ever.

As I said, as of now it looks like lollipops and gum drops for the USA

In 10 yrs give or take, the USA will have built trade walls that nobody really cares about in the most populace parts of the world.. Don't forget the USA debt. Treasury has to sell debt. What happens when nobody wants USA debt. Today the word is yes. What do you think in 10 yrs if Trump continues his bully tactics??  Even in the U.K the sentiment on the street is hatred for Trump. I saw and spoke with taxi drivers etc 1st hand in the U.K a short time ago.

The world is changing and the old rules of the reserve dollar will fail. When that happens, then the USA is mostly isolated within itself. No country has succeeded with protectionism trade policies

It will take time, but nobody will allow the USA to dictate/bully trade terms to 3/4 of the world population.

Not saying I have laid out the perfect senerio, but protectionism and dictating  trade terms with 3/4 of the world population just will not work

Look at a map and draw a line north/south with the USA on the western side and  most all else east of the Atlantic on the eastern side

Where do you find trading allies for the USA in any numbers. Battle carriers are no substitute for trade

Don't forget, even Mexico wants changes to the trade pact. Australia trade with china in a big way

Trump is isolating the USA behind a trade wall, and our soybeans will rot for lack of a market

No nation in history has succeeded in such circumstances. Yeh, real smart Trump. You are losing support in the red states slowly but surely.

China will smile and shake hands but no real, lasting trade progress will happen. China is building a different world one step at a time.

Xi has a life time to build

Trump has two terms

Short term advantage is USA

Long term advantage is china and associates

That is why I use an approx. 10 yr time span.

By the way does a strong USD really make it easy to sell on the world market???

Given the USA has the attention span of about 10 seconds, beyond the world of facebook etc.   the USA will fail long term

Slogans and fear might win elections in the West. Long term trade pacts within 3/4 of the population will win the world. China, Russia, Iran and India has the population and resources of human capital to make real, long term change., whilst attracting numerous other countries to their trade pact.

You may think Trump has a plan. What you are really looking at is a dead cat bounce. Slogans and gum drops.

Most of Trump supporters are talking short term

I am talking long term.

Just a possible hint. When the central banks start to fail, then you might want to really think.

But drink the Kool Aid if that makes you feel better.

By carlberky - Oct. 28, 2018, 6:58 a.m.
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Wayne, a very thoughtful and well done analysis.

By cfdr - Oct. 28, 2018, 9:33 p.m.
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Wayne, I only need to say that the US economy seems to be the only economy doing well - anywhere in the world today.  If what you imply is really happening, why did Justine Trudeau come hat in hand to Washington DC and accept a deal that he swore he would never accept?  Why did Mexico throw Canada under the bus to make a deal with Trump?

You can wish that the US is failing, but wishes don't make it so.

China is the worlds biggest gold miner. Russia, india and china have been aggressive gold buyers. Something may be brewing I don't know.

You may have something there.  I've been wondering about this for some time now.  It almost seems like the west is counting on digital currencies and Russia, etc. are betting that the old standard will win out.  It looks like massive bets to me - and no one knows which will win.

Africa enters the equation as the source of raw materials

And, once again - where do you think all the money came from that China has to invest in Africa?  And South America?  What happens if we do nothing and the trends continue on like they have recently?  I don't like the destination we arrive at on that road.

When you look at it, you have a huge part of the world that is self contained and does not need the USA

Then why don't they behave that way??

Look out the window once in awhile to see if it's raining or if the sun is shining, Wayne.

The only stick the USA has at present is the reserve dollar.

And, like Michael Pettis says, that is more of a detriment for the US than it is a benefit.

Given time the reserve dollar will be replaced, one way or another. No currency dominates for ever.

And - the fastest way to get to that point is to continue on the way we have been going!!  President Trump is doing his best to change course.  It appears that he is our only hope.

Not saying I have laid out the perfect senerio, but protectionism and dictating  trade terms with 3/4 of the world population just will not work

Again - Wayne - what is your alternative??

We all know where the road leads that we have been on with the greedy globalists and the politicians they own.

Trump is isolating the USA behind a trade wall, and our soybeans will rot for lack of a market

So, Wayne, we should continue on the same road - sending them hundreds of billions of dollars - every year - so that they can invest around the world in agriculture to compete with us?

Or, do we try to change course and make them want to buy what we produce?

Tell me what your plan is, Wayne??

Short term advantage is USA

Long term advantage is china and associates

Unfortunately, I agree with you here, Wayne.  

But, should we do everything we can to hasten this happening??  Or, should we try to fight this trend??  I just don't believe, like you seem to, that we should just roll over and play dead.

I gotta get some sleep - another long day tomorrow.

By cfdr - Oct. 31, 2018, 9:06 p.m.
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I see an article on Zerohead that talks about China and the apparent capital outflows.

https://tinyurl.com/y87ft5wr

Michael Pettis had some thoughts recently too.  He said that China has the most to lose in a trade war.  Also, he talks about Beijing's three options - unemployment, debt, or wealth transfers.

https://tinyurl.com/ybgn3r47

He does say that the US should "chill out" about high tech threat, however.

https://tinyurl.com/y8erjjfl

The problems that it has are so severe that the real issue for China is if it can hold itself together once growth rates start to slow dramatically.

IMHO, Michael Pettis is must reading for what is happening in China.  His book "The Great Rebalancing" is well worth the time to read.