Baltic Dry Index. 2168 + 50 Brent Crude 59.34 Spot Gold 1527
Never ending Brexit now October 31,
maybe. 68 days away.
Trump’s Nuclear China Tariffs
Now In Effect.
USA v EU trade war postponed to November,
maybe.
“Thus, under the gold
standard, a free banking system stands as the protector of an economy’s
stability and balanced growth. When gold is accepted as the medium of exchange
by most or all nations, an unhampered free international gold standard serves
to foster a world-wide division of labor and the broadest international trade.
Even though the units of exchange (the dollar, the pound, the franc, etc.)
differ from country to country, when all are defined in terms of gold the
economies of the different countries act as one …”
Alan Greenspan.
Get gold! Thursday and Friday’s trade war insanity has
called into question the international trade reserve status of relying on the
US fiat dollar. Though change won’t happen quickly, an unstable President
Trump, and the prospect of an extreme left wing Democrat Socialist alternative president in
November 2020, together with the fiat nature of all currencies since August 15,
1971, has set off a process of looking for an alternative.
Below, Black Friday’s global economy earthquake.
Trump raises China tariffs in escalation of trade war
By Robert
Schroeder Published: Aug 23, 2019
5:35 p.m. ET
President Donald Trump said he would increase tariffs on
Chinese imports in an escalation of a trade war between Washington and Beijing
that rocked stock markets on Friday. After China announced new levies on U.S. products earlier in the day, Trump tweeted that 25% tariffs on $250 billion in Chinese products would rise to 30% starting Oct. 1.
Separately, the remaining $300 billion in imports will be tariffed at 15% instead of 10% on Sept. 1, the president said.
The intensifying trade brawl with China sent stocks plummeting on Friday, with the Dow Jones Industrial Average DJIA, -2.37% shedding more than 600 points. The S&P 500 index SPX, -2.59% dropped 75 points and the Nasdaq COMP, -3.00% fell 239 points.
Trump had said earlier on Twitter that he was ordering U.S. companies to explore manufacturing in the U.S. instead of China. But U.S. presidents don’t have authority to order private companies to make their products in a given location.
See: Dow drops over 600 points after Trump says U.S. companies must look for ‘alternative to China.”
In an extraordinary statement, Trump also questioned over Twitter who was the “bigger enemy” of the U.S., Federal Reserve Chairman Jerome Powell or Chinese President Xi Jinping. Powell gave a speech in Jackson Hole, Wyo., that did not promise any specific monetary-policy easing. Trump has long pressed the Fed to aggressively cut interest rates.
Escalation in U.S.-China trade war threatens global economy, poses Trump reelection risk
China targets soybeans, autos and other products in key swing states, then Trump ups the ante
China and the United States on Friday announced they would raise tariffs on each other, marking the latest volley in a widening trade war that has damaged the global economy and could pose a risk to President Trump’s reelection.Early on Friday China said it would increase existing tariffs by 5% to 10% on more than 5,000 U.S. products, including soybeans, oil and aircraft. A 25% duty on American-made cars would also be reinstituted. The value of these products is estimated by the Chinese Commerce Ministry to total around $75 billion.
Trump responded after financial markets closed by saying he would raise current U.S. tariffs. A 10% duty on $300 billion in Chinese goods will be raised to 15% in September while a 25% tariff on $250 billion in imports would be increased to 30% in October.
---- The U.S. imports four and a half times as many goods from China than the other way around, but the Chinese government, as it’s done in the past, appears to be singling out American-made products largely in Midwestern states that Trump carried in the 2016 election and that he needs to win reelection.
Iowa is the
largest producer of soybeans, for example, and Michigan and Ohio have the
biggest concentration of auto manufacturing. Trump carried all three states in
the last election, but he barely won in Michigan.
The two
countries continue to negotiate, but Trump and some of his advisers believe
China might be trying to wait out his administration and bank on a Democrat
winning the presidency in 2020.
More
Powell says Fed ‘carefully watching developments’ and ‘will act as appropriate’
By Greg Robb Published:
Aug 23, 2019 12:14 p.m. ET
Federal Reserve Chairman Jerome Powell on Friday said the
central bank was “carefully watching developments” in the economy and would
“act as appropriate,” but stopped short of promising any specific interest-rate
easing steps.In a closely-watched speech in Jackson Hole, Powell said he and his colleagues were trying to assess “this complex, turbulent picture” that has emerged in August, with financial markets volatile as Trump’s trade war with China escalates and the global economy weakens as a result.
In his wry, understated, way, Powell said “the three weeks since our July meeting have been eventful.”
But he said the Fed was working to sustain a favorable economy “in the face of significant risks.”
Investors think another interest-rate cut in September is a done deal, but comments from other Fed officials at Jackson Hole show the FOMC rate setting committee is split. Many officials want the Fed to keep interest rates on hold, but others are backing another rate cut.
Read: George and Harker want the Fed to remain on hold
The Fed cut its policy interest rate by a quarter percentage point in July, for the first time in a decade, a move that Powell called a “mid-cycle adjustment.” He did not repeat that phrase in this speech.
The Fed chairman did argue that the July rate cut has eased financial conditions and helped explain why the outlook for inflation and employment looks favorable.
In one more hawkish passage, Powell said inflation “seems to be moving up closer to 2%.” Some monetary policy doves had pointed to low inflation as one reason for more easing.
But Powell was not closing the door on more easing even though he spoke at length about how the strong job market was extending employment to more Americans that were “still left behind.”
“Our challenge now is to do what monetary policy can do to sustain the expansion,” he said.
---- In a passage in his speech that seemed a swipe at President Donald Trump, Powell said interest rate policy “cannot provide a settled rulebook for international trade.”
Trump reacted with fury to Powell’s speech, asking in a tweet if Powell was a bigger “enemy” than Chinese president Xi Jinpeng.
More
Trump says he wouldn't stop Fed Chair Powell if he offered to resign
August 24, 2019 / 4:31 AM
WASHINGTON
(Reuters) - U.S. President Donald Trump sharply criticized Federal Reserve
Chairman Jerome Powell on Friday and said he wouldn’t try to stop the chief
U.S. central banker if he offered to resign.
Trump,
departing the White House to travel to the G7 summit in France, told reporters,
“I’m not happy with Jay Powell.”
His comments
continued a war of words against Powell that, along with retaliatory tariffs
imposed on U.S. goods by China, helped trigger a sharp drop on Friday in the
U.S. stock market.
“I don’t
think he’s doing a good job at all,” Trump told reporters as he left the White
House shortly before midnight on Friday.
“I don’t
think he’s much of a chess player, but I’ve got him so, you know, that’s what I
have,” added the president, who earlier questioned on Twitter who was “our
bigger enemy,” Powell or Chinese leader Xi Jinping.
Asked if he
wanted Powell to resign, Trump replied: “Do I want him to resign? Let me put it
this way, if he did I wouldn’t stop him.”
Powell was in Jackson Hole, Wyoming, on
Friday for a meeting with other central bankers. He said the Fed would “act as
appropriate” to keep the U.S. economy healthy in a deteriorating global economy
but stopped short of committing to a series of rate cuts sought by Trump.
World needs to end risky reliance on U.S. dollar: BoE's Carney
August 23, 2019 / 8:04 PM
JACKSON HOLE, Wyo. (Reuters) - Bank of
England Governor Mark Carney took aim at the U.S. dollar’s “destabilizing” role
in the world economy on Friday and said central banks might need to join
together to create their own replacement reserve currency.
The dollar’s
dominance of the global financial system increased the risks of a liquidity
trap of ultra-low interest rates and weak growth, Carney told central bankers
from around the world gathered in Jackson Hole, Wyoming, in the United States.
“While the
world economy is being reordered, the U.S. dollar remains as important as when
Bretton Woods collapsed,” Carney said, referring to the end of the dollar’s peg
to gold in the early 1970s.
Emerging
economies had increased their share of global activity to 60% from around 45%
before the financial crisis a decade ago, Carney said.
But the
dollar was still used for at least half of international trade invoices - five
times more than the United States’ share of world goods imports - fuelling
demand for U.S. assets and exposing many countries to damaging spillovers from
swings in the U.S. economy.
Carney - who
was considered a candidate to be the next head of the International Monetary
Fund but failed to secure backing from Europe’s governments - said the problems
in financial system were encouraging protectionist and populist policies.
Earlier on
Friday, U.S. President Donald Trump said he was ordering U.S. companies to look
at ways to close their operations in China, the latest escalation of mounting
trade tensions between Washington and Beijing.
More
“Central banks, of
necessity, determine what the money supply is. If you are
on a gold standard or other mechanism in which the central
banks do not have discretion, then the system works automatically. …
I am one of the rare people who have still some nostalgic view about the old
gold standard, as you know, but I must tell you, I am in a very small minority
among my colleagues on that issue.”
Alan Greenspan.
In
other news, France wobbles and is a very divisive US Supreme Court fight next?
French winemakers jittery over Trump tariff threats ahead of G7
Date created :
23/08/2019 - 04:16
French
winegrowers are on tenterhooks as they wait to see whether Donald Trump will
follow through with his repeated threats to raise tariffs on French wine in
retaliation for the new GAFA tax.
As the
leaders of the world's richest countries gather for the G7 opening Saturday,
winegrowers in host nation France fear they will have to suffer consequences
from the new French tax on the US tech giants.
Representatives
of the GAFA corporations -- Google, Apple, Facebook and Amazon -- on Monday
railed against the tax aimed at plugging a loophole that allows the firms to
pay next to nothing in countries where they make huge profits.
They called
the tax "discriminatory" and a "troubling precedent".
Meanwhile,
while President Trump has repeatedly warned of retaliation, on August 9
suggesting a 100 percent tax on French wine imports to the United States,
according to the Bloomberg news agency.
Trump,
though a teetotaller, had tweeted in late July that "American wine is
better than French wine!"
While
putting on a brave face, the French wine sector -- the world's top exporter in
terms of value and third in volume -- is making contingency plans.
Will
Americans -- who bought 1.6 billion euros ($1.8 billion) worth of French wines
and spirits last year -- be willing to pay double for their favourite Cote du
Rhone?
----Even before the French parliament approved the GAFA tax on July 11, Trump had hinted on numerous occasions that he could impose customs duties on French wine. But at the time the rationale was one of unfair competition with American wines.
"France
charges us a lot for the wine and yet we charge them little," the US
president told CNBC in June, adding: "And you know what, it's not fair.
We'll do something about it."
Imported
wine currently faces US duties of 5.3 cents to 12.7 cents (5 to 12 euro
centimes) a bottle, while US wines shipped to the EU face duties of 11 to 29
cents a bottle, according to trade bodies.
----The contingency plans vary among winegrowing regions. In Champagne, "of course we're worried because the United States is our leading market in terms of value after France," said regional winegrowers representative Maxime Toubard.
But he said
he remains "confident" because "American consumers like
champagne."
In the southwestern
Cognac region -- which exports nearly half of its production to the United
States -- one industry figure said business leaders were "vigilant"
but "nothing is confirmed."
Thomas
Montagne, president of the European Confederation of Independent Winegrowers
(CEVI), noted that cheaper and mid-range wines were most at risk from new US
tariffs, as opposed to reserve wines.
More
https://www.france24.com/en/20190823-french-winemakers-jittery-over-trump-tariff-threats-ahead-of-g7
RBG scare: David Axelrod warns Supreme Court vacancy fight could 'tear this country apart'
by Daniel Chaitin
August 23, 2019 05:23 PM
That didn't take long.A former Obama adviser set the stage for a potentially nasty confirmation fight in the Senate next year within an hour of the Supreme Court announcing Justice Ruth Bader Ginsburg recently completed three weeks of radiation treatment after doctors found a localized cancerous tumor on her pancreas.
"If there is a SCOTUS vacancy next year and @senatemajldr carries through on his extraordinary promise to fill it-despite his own previous precedent in blocking Garland-it will tear this country apart," David Axelrod said in a tweet Friday afternoon.
He was referring to how Senate Majority Leader Mitch McConnell said earlier this year that the Senate would consider a presidential nominee to fill a vacancy on the court if one occurred in 2020.
“Oh, we’d fill it," the Kentucky Republican said at an event in May.
That upset Democrats who remember the role McConnell played in blocking consideration of then-President Barack Obama’s nominee, Merrick Garland, to fill the seat vacated by the death of Justice Antonin Scalia in 2016. At the time, he defended Republicans’ decision not to hold a confirmation hearing for Garland because it was a presidential election year.
Facing accusations of hypocrisy after McConnell seemingly changed his mind this year, his office claimed the senator was being consistent because he stressed that the issue three years ago was that the White House and Senate were held by different parties. In 2020, both the White House and Senate will be in Republican control.
Ginsburg, who is 86, has battled various illnesses over the last 20 years. The Supreme Court said in a statement Friday that she “tolerated the treatment well" and concluded that there is no evidence of disease elsewhere in her body.
After a third bout with cancer earlier this year, Ginsburg told NPR in July that she has no plans to retire anytime soon. She said her plan is to "stay longer" than the late Justice John Paul Stevens, who retired from the high court in 2010 at the age of 90.
“But prior to World War I,
the banking system in the United States (and in most of the world) was based on
gold and even though governments intervened occasionally, banking was more free
than controlled. Periodically, as a result of overly rapid credit expansion,
banks became loaned up to the limit of their gold reserves, interest rates rose
sharply, new credit was cut off, and the economy went into a sharp, but
short-lived recession. … It was limited gold reserves that stopped the
unbalanced expansions of business activity, before they could develop into the
post-World War I type of disaster.”
Alan Greenspan.
This weekend’s musical diversion. In
honour of France this special weekend, Marc-Antoine Charpentier (1636 - 1704)
Charpentier - Marche de Triomphe H.547
The monthly Coppock Indicators finished July
DJIA: 26,864
+53 Up. NASDAQ: 8,175 +65 Down. SP500: 2,980 +53 Up.
The S&P and Dow remain up, but in very
unconvincing fashion. The NASDAQ remains down. Like the
Fed, I would await a better data driven signal.
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