Tag: China

How Trump has made both the trade and budget deficits worse

Guest Post by Paul Brandus

The law finally seems to have caught up with President Trump.

Not lawmen like special counsel Robert Mueller, or the G-men of the Southern District of New York—though they may soon catch up with him, for all I know. No, I’m talking about the law of unintended consequences, which has already overtaken the president in two big areas: economic and fiscal policy

By definition, the law of unintended consequences is when someone takes action on something, and that action has an unanticipated or unintended effect on something else.

That is what has happened to Trump. He took office vowing to eliminate the entire national debt in eight years, but it has only gotten worse, thanks to the skyrocketing budget deficit. In turn—and this is the unanticipated or unintended effect on something else—it has made the trade deficit worse as well. The Census Bureau said Wednesday that the trade deficit for goods soared to an all-time high in 2018: a whopping $891 billion.

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Mike Pompeo’s War Warning to China

Guest Post by Pat Buchanan

Mike Pompeo's War Warning to China

Could America sustain such a commitment? More important, why should we? Has the White House thought through the implications of what the Pompeo threat may bring?

As President Trump flew home from his Hanoi summit with Kim Jong Un, Mike Pompeo peeled off and flew to Manila. And there the Secretary of State made a startling declaration.

Any armed attack by China on a Philippine ship or plane in the South China Sea, he told the Philippine government, will be treated as an attack on an American ship or plane, bringing a U.S. military response.

“China’s island building and military activities in the South China Sea threaten your sovereignty, security and, therefore, economic livelihood, as well as that of the United States,” said Pompeo. “As the South China Sea is part of the Pacific, any armed attack on Philippine forces, aircraft or public vessels in the South China Sea will trigger mutual defense obligations under article 4 of our mutual defense treaty.”

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Trump Folds on Trade War With China

Guest Post by Tom Luongo

Over the weekend, fifteen minutes before U.S. equity futures markets opened, President Trump extended the trade talks between the U.S. and China.

No one should be shocked by this.

Because China isn’t the main problem.  We are.  Why?  Keep reading.

Trump has rapidly become the Appeaser-in-Chief. Everyone on the other side of the negotiating table knows this.  Sure, he’s put sanctions on Russia, Iran and every other small global player to show how tough he is.

But when it comes to anyone serious enough to hurt the U.S. economy?  He folds every time.

India?  Germany? Mexico?  Canada?

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230,000 Died in a Dam Collapse That China Kept Secret for Years

Via MSN

a group of people on a rocky beach: Banqiao dam 2

Workers stood along the top of Banqiao Dam, some 150 feet above the valley’s floor, desperately trying to repair its crest as rain from Typhoon Nina fell for a third straight day. After battering Taiwan, the storm had moved inland where it was expected to dissipate, but Nina turned north instead, reaching the Huai River basin on Aug. 5, 1975, where a cold front blocked its progression. Parked in place, the typhoon generated more than a year’s worth of rain in 24 hours.

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Venezuela Is An Opportunity For Russia And China To Change The World

Guest Post by Paul Craig Roberts

Nothing better illustrates Washington’s opposition to democracy and self-determination than the blatantly public coup Washington has organized against the properly elected president of Venezuela.

Washington has been trying to overthrow the Venezuelan government for years. Washington wants the state owned oil company to be privatized so that it can fall into the hands of US oil companies. That would ensure Washington’s control over Venezuela. Transferring the wealth out of the country would prevent any economic development from inside the country. Every aspect of the economy would end up in the hands of US corporations. The exploitation would be ruthless and brutal.

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Seeing Eye Human

Guest Post by Bill Bonner

BALTIMORE, MARYLAND – We spent the weekend as a seeing eye human.

Our daughter asked us to dog-sit. What are parents for? And the dog in question, a golden retriever, had gone blind.

Ol’ Billy would take a little extra care, she told us.

And so, we took Billy down to the farm and soon learned the extent of his infirmity. Eager to join your author on his round of duties, he took off at a run to follow him down to the barn… and ran right into a tractor.

Billy was blinder than we thought. But we soon got used to helping him navigate, by keeping him close and grabbing his collar in tight situations.

“No Billy… over here… Watch out Billy. Stop Billy. Come over this way. Watch out for that fence post.”

Billy ran into trees and bushes, stumbled over steps and stools… and got lost. But we admired his character. He never seemed depressed. He never blamed anyone else or pitied himself.

He had the noble trait of being able to endure hardship without bending to it. He just cheerfully went on being a blind dog, like Argos… waiting for Odysseus’ return.

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A Satirical Dream: Trump’s 2019 State of the Union Address

By Doug “Uncola” Lynn via TheBurningPlatform.com

Mr. Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and my fellow Americans:

It’s been another year since your president has stood before you to, once again, deliver yet another State of the Union address.

Tonight, however, will not be the standard fare.  Instead of half-truths and false optimism, I am going to set aside all that in order to say what I believe is true.

Dear citizens, we now stand a crossroads and we must choose.  We must choose if we are to move forward and deal with the real problems facing our nation, or to progress as a country of corruption; whether to return to our roots as an honorable republic – a nation of laws,  or to continue our decline into lawlessness and the abyss.

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Something Wicked This Way Comes

Guest Post by John Mauldin

Image result for something wicked this way comes john mauldin

For a couple of years now, the economic narrative has shown a comparatively strong US against weakness in Europe and some of Asia (NOT China). The US, we are told, will stay on top. I agree with that, as far as it goes… but I’m not convinced the “top” will be so great.

Americans like to think we are insulated from the world. We have big oceans on either side of us. Geopolitically, they serve as buffers. But economically they connect us to other important markets that are critical to many US businesses. Problems in those markets are ultimately problems for the US, too.

Last week I gave you my Year of Living Dangerously 2019 US forecast, but I didn’t discuss important events overseas. Summarizing last week quickly, I think the base case is that the United States economy slows down but avoids recession in 2019. That said, there are significant risks to that forecast, mostly to the downside.

Today we’ll make another literary metaphor to frame our discussion. “Something Wicked This Way Comes” is a 1962 Ray Bradbury novel about two boys and their horrifying encounter with a traveling circus. Later it was a movie.

In our case, something wicked most certainly is coming this way. Several somethings, in fact, approaching from all directions. The real question is how much damage this circus will do before it leaves town.

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China Overrated by Right-Wing Kooks: These Crazies Are Just Like Hitler

Guest Post by Fred Reed

One often sees the silly assertion by right-wing extremists that feminists, social justice warriors, and other “cranks” are enstupidating American education. The purpose. according to these fascists, who are just like Hitler,  is “to make historically incompetent groups look competent.” The racism in these absurd claims is obvious. In particular such  Neo-Nazis say that mathematical education is being destroyed to benefit “retards.” This “dumbing down,” they say, will hand the future to China.

This is conservative drivel. Nothing suggests that China is gaining on the US in science and technology, except the evidence, and this can be ignored. It is particularly important to keep in mind that the Chinese cannot innovate, only copy American technology.

Harvard-MIT Math Tournament Ordinary American kids, the best mathematicians in two of America’s best universities. Asia cannot match this.

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President Xi Orders Chinese Army To “Prepare For War”

Via ZeroHedge

In just a few short days, China has proved that investors who have been underestimating the geopolitical risks stemming from the simmering tensions between the US and China over the latter’s territorial claims in the South China Sea and paranoia over the fate of Taiwan – a de facto independent state that President Xi Jinping is aggressively seeking to bring under the heel of Beijing – have done so at their own peril.

Earlier this week Xi Jinping, the Chinese emperor for life president provoked an angry rebuke from Taiwan’s pro-independence president when he demanded during a landmark speech earlier this week that Taiwan submit to “reunification” with Beijing.

https://www.zerohedge.com/sites/default/files/inline-images/2019.01.04xi.JPG?itok=HkqDaTHj

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Chinese Admiral Wants To “Sink Two US Aircraft Carriers” Over South China Sea

Via ZeroHedge

Mere days after Chinese President Xi Jinping vowed to “resolutely” defend China’s security interest – a veiled reference to maintaining its domination of the South China Sea – News.au has published details from a speech delivered two weeks ago by one of China’s leading military commanders where he outlined a strategy to rebuff the US Navy should it take an even more interventionist posture within the nine-dash line.

https://www.zerohedge.com/sites/default/files/inline-images/2019.01.01ninedash.JPG?itok=YGP8Jh5A

Rear Admiral Lou Yuan told an audience in Shenzhen that the simmering dispute over the East and South China Seas could be decisively ended by sinking two US aircraft carriers.

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2019 FROM A FOURTH TURNING PERSPECTIVE

“An impasse over the federal budget reaches a stalemate. The president and Congress both refuse to back down, triggering a near-total government shutdown. The president declares emergency powers. Congress rescinds his authority. Dollar and bond prices plummet. The president threatens to stop Social Security checks. Congress refuses to raise the debt ceiling. Default looms. Wall Street panics.” – The Fourth Turning – Strauss & Howe

Image result for budget impasse trump schumer

Strauss and Howe wrote their book in 1996. They were not trying to be prophets of doom, but observers of history able to connect events through human life cycles of 80 or so years. Using critical thinking skills and identifying the most likely triggers for crisis: debt, civic decay, and global disorder, they were able to anticipate scenarios which could drive the next crisis, which they warned would arrive in the mid-2000 decade. The scenario described above is fairly close to the current situation, driven by the showdown between Trump and the Democrats regarding the border wall.

It has not reached the stage where all hell breaks loose, but if it extends until the end of January and food stamp money is not distributed to 40 million people (mostly in urban ghettos) all bets are off. The likelihood of this scenario is small, but there are numerous potential triggers which could still make 2019 go down in history as a year to remember.

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What We Said to a Group of D.C. Elite

Guest Post by Bill Bonner

DELRAY BEACH, FLORIDA – First, Bloomberg reports that:

U.S. government debt is on track this year to rise at the fastest pace since 2012, as a stronger economy fails to keep pace with the wave of red ink that’s rising under the Trump administration.

Total public debt outstanding has jumped by $1.36 trillion, or 6.6 percent, since the start of 2018, and by $1.9 trillion since President Donald Trump took office, according to the latest Treasury Department figures. The latter figure is roughly the size of Brazil’s gross domestic product.

Still, the Dow rose yesterday, as the papers reported “hints of progress” in the China/U.S. trade war.

But wars are easier to start than to stop. Stuff happens that neither party anticipated… which leads to other stuff… which, typically, leads to regrettable conclusions.

In the present case, we expect the Trump team is looking for a way to quietly drop the war and turn to other headline-making spats.

But now, with a high-level Chinese technology executive behind bars, China’s hackles are up… and it is likely looking for ways to retaliate, while keeping its merchandise flowing to the U.S.

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This is What The “Trade” War With China Is Really All About

Via ZeroHedge

Forget soybeans, auto imports, iPhones, crude oil, and cheap Chinese gadgets. Also forget tariffs, duties, and subsidies. Even forget weapons.

The real reason behind the US-China “trade” war has little to do with actual trade, and everything to do with what China’s president, Xi Jinping, said when he visited a memory chip plant in the city of Wuhan earlier this year. In a white lab coat, he made an unexpectedly sentimental remark, comparing a computer chip to a human heart: “No matter how big a person is, he or she can never be strong without a sound and strong heart”.

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Mr. Tariff Ups the Ante on China

Guest Post by Tom Luongo

Donald Trump just jumped the shark calling himself, “Mr. Tariff.”  He believes a trade deficit is akin to stealing the wealth of a nation.  It isn’t.

Under normal conditions a trade deficit is simply a reflection of the difference in comparative advantage of one country’s workers over anothers.  And the value of the currency is supposed to rise and fall to offset that state of affairs over time.

Donald Trump has, in the words of David Stockman, “A 17th century view on global trade.”

It is one born of a complete misunderstanding of how and why trade imbalances occur, why they will re-balance if allowed and why, ultimately, they are irrelevant.

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