One Contrarian Bets Trump Is Playing A ‘Shrewd Game’. Brinksmanship Is Fraught With Risk Regardless
The idea that Donald Trump is "crazy like a fox" when it comes to the nexus between the Fed, the trade wars and the US equity market is gathering adherents.
The thesis is simple, and we've been over it countless times in these pages. Trump, the story goes, is deliberately escalating trade tensions in an effort to sow so much doubt about the outlook for the global economy that the Fed has no choice but to cut rates. Once Jerome Powell acquiesces, Trump will deescalate trade tensions, roll back t
It appears fundamentals have little or no bearing on any part of this post or anything Zhao is theorizing . If one considers that Economic cycles are a natural event then recessions have a place in Equity cycles because they correct excesses and improperly allocated capital..
Might it not be better for the system to Flush rather than build on the scenario that has developed ??? . I really see what is going on as more of a Geopolitical struggle to uproot the Western based Dollar hegemony and Unilateralism as opposed to a purely economic event.
If the Petro dollar is not USD, we’re toast. Trump loves to be ‘the Great Disrupter’ regardless of the risk to America.
Remember he went bankrupt so many times U.S. banks would no longer give him credit; only thr Russians and Deutsche Bank. Since the Chinese had been large buyers of Treasuries in the past, this doesn’t bode well.
Sure these ideas arent coming from Steve Bannon?
It’s possible he’s trying to get the Fed to cut and then will settle with China. We know that Trump follows the market and uses it like a report card on his performance. But I’m not sure the likely increase in equity valuations that follows is what will guarantee his re-election. First, for the average voter, a rising stock market that is not accompanied by growth in real wages may not seem like a great economy. Second, this latest spat with Mexico really led me to wonder if trade wars will ever be over during the course of a Trump Presidency. We had a deal with Mexico, and he still threatened tariffs. Even if he settles with China, there are many more wars to fight. When interviewed about not fighting in Vietnam, he knew that the country was far away, and that they were taking advantage of us on trade. Japan is on his list, but he will wait till after their elections. India is on notice. What about the Philippines, Malaysia and the rest of Asia? There are many more trade wars to fight, and I think those wars could keep him occupied even if he stays in office till 2025. Then, there are all the nations that do something to irritate him, which is going to happen from time to time. Germany or Turkey do a deal with Russia that he doesn’t like, and tariffs may be the revenge of choice. Some nation wants to uphold the treaty with Iran, and tariffs are a possible sanction. He is a bit of a mercantilist at heart, and he seems to enjoy using this particular weapon. Unless the weapon explodes in his face one time, he will probably keep using it.
Is this still ‘mostly satire’ , H?
hahaha. good question
Many analysts are giving Trump way too much credit. He is an oppositional personality with narcissistic disorder. Oh and lets not forget the view at 20,000 feet – he is crazy. The evidence is in plain sight. If it isn’t China it will be Mexico, EU, Japan, then Viet Nam and who knows where else. At the beginning of this farce I had hoped we could avoid a trade war leading to war, or avoid a nuclear war. To me, that would have spelled a good outcome for 4 years of this nutjob. It looks like we may not make it. Just like with Hitler and German industrialists, American business people and the street thought they could control Trump. Not likely. The only solution lies in November 2020 through the ballot box. And that is not a slam dunk by any stretch. If re-elected there will be no holding Trump back and America is in for very deep trouble.
It is un-possible that Bluto is that smart. He can’t even form a proper sentence. That he is now even larger than life does not make him unaffected by gravity (China).
If Powell TRULY cares about America he will NOT cut rates and allow the country to go into a recession as that appears to be the only chance of ridding America of Trump.
whereupon he will be accused of “doing political things”.
Which of course is also true if the Fed does cut rates.
Either way he’s screwed and he knows it. So here’s a thought: The Fed will do a lot of nothing until it’s too late.