Posts Tagged ‘trade war’
December 8, 2019
This is a rhetorical question of course, for the lack of wage growth is to be found in the vast amount of money chasing a global labor pool.
It is capital that had benefited from the last 30 years of the unleashing workers after the fall of the Soviet Empire and the black/white cat policies of Deng in pursuing growth in China. Now that other emerging economies are attracting capital in an effort to create jobs, there still remains a great deal of downward pressure on wages. Even the movement of supply chains out of China will act as a drag on global earnings as manufacturers will act to hold down wages as way of remaining attractive to foreign direct investment. The world has been watching as Chinese earnings growth has accelerated over the last 10 years but one of the outcomes from the Trump tariffs will be to force a slowdown in China’s wage inflation.
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Tags:carry trade, China, Euro, Fed, Swiss Franc, tariffs, trade war, U.S. Dollar, U.S. jobs data, wage inflation
Posted in Currency, United States | 24 Comments »
December 3, 2019
On Monday President Trump sent out an early morning TWEET that sought to admonish the FED for keeping interest rates too high, coupled with an accusation that “two South American have been presiding over a massive devaluation of their currencies, which has not been good for our farmers.” ALL THE PRESIDENT’S MEN IN THE CAPACITY OF ECONOMIC AND TRADE ADVISERS OUGHT TO BE FIRED FOR MALFEASANCE.
This tweet was so off base that it should have forced the media into hyper critical mode to deconstruct its flaws. Brazil and Argentina have not been intervening to depreciate their currencies.
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Tags:Argentina, Brazil, China, tariffs, trade war, U.S. trade
Posted in trade, United States | 17 Comments »
August 19, 2018
So much of social science is dependent on various actors making rational decisions. Economics has regularly proven that “actors” certainly fail to act rationally as manias, crashes and panics in repeated form are proof (see Charles Kindleberger). In the realm of politics, the dependence on nation-states to behave rationally has led to many major policy errors. During the Cold War the balance of nuclear weapons prompted both super powers to remain reticent to embark on direct confrontations and avoid an unthinkable shooting war. The fear of world destruction also meant that the USSR and UNITED STATES would leash their “allies” to prevent any direct conflict between the two major hegemonists.
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Tags:China, Erdogan, foreign exchange controls, IMF, Merkel, Putin, Russia, trade war, Turkey, Yuan
Posted in China, Currency, Turkey | 22 Comments »
March 6, 2018
Let’s discuss the concept of tariffs with a wider historical perspective:
The Bretton Woods system crafted at the end of World War II provided the U.S. with both an enormous privilege and an enormous burden (a blessing and a curse, if you will). The U.S. acted as the provider with massive amounts of global liquidity but it also became the repository of the FREE world’s excess capacity. The Marshall Plan and the Alliance For Progress acted to spread dollars to our allies in an effort to counteract COMECON and the influence of the Soviet Empire.
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Tags:BOC, BOJ, Bretton Woods, Chinese Yuan, currency manipulation, ECB, NAFTA, Pax Americana, trade, trade war, U.S. Dollar
Posted in Currency, trade | 21 Comments »
January 24, 2018
The U.S. dollar fiduciaries wreaked havoc on markets as Secretary Mnuchin and Commerce Secretary Wilbur Ross hit dollar bulls with a one-two punch that sent the dollar index to three-year lows. I sure hope that Mrs. Mnuchin mirrored the behavior of previous Swiss National Bank (SNB) Chairman Phillip Hildebrand, who was forced to resign in January 2012 when it was discovered his wife made a currency trade three weeks prior to an SNB policy announcement. I am sure that no White House Davos participants acted in any kleptocratic fashion (sarcasm intended). The price of a $650,000 ticket to Davos has to be of some value. Now, moving beyond sarcasm, Secretary Mnuchin broke with tradition to openly suggesting that a weaker DOLLAR is good for American trade and thus economic performance.
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Tags:Davos, ECB, Euro, Mario Draghi, Steve Mnuchin, trade war, U.S. Dollar, Wilbur Ross
Posted in Currency, Davos, United States | 16 Comments »
October 11, 2011
The media was all aflutter with the vote in the Slovakian Parliament on the issue of the July 21 changes to enhancing the increased funding for the EFSF. This vote was meaningless for Europe and the world but of significance for the Slovakian government. The amount of money that Slovakia would have to add to the EFSF is a pittance compared to the funds that Europe has sent and will send to the Slovak people under the guise of the EU COHESION FUNDS. Europe has sent the less-affluent states money to help ease the wide disparities between the wealthy core nations and the newly developing nations of the former Soviet Empire.
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Tags:Boehner, China, currency manipulators, EFSF, Equities, EU Cohesion Funds, Euro, House, Senate, trade war
Posted in China, Currency, Europe, United States | 6 Comments »