iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
19,850 Blog Posts

The Trade War Thickens; Futures Plunge

The notion of cooler heads prevailing took a backseat to a new volley of tariffs out of Washington and Beijing.

Here’s the latest.

Via ZH:

However, that did not happen, and with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, “a trade deal is imminent.”

Only, it isn’t, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support – factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.

The 15% U.S. duty hit consumer goods ranging from footwear and apparel to home textiles and certain technology products like the Apple Watch. A separate batch of about $160 billion in Chinese goods – including laptops and cellphones – will be hit with 15% tariffs on Dec. 15. China, meanwhile, began applying tariffs of 5 to 10% on U.S. goods ranging from frozen sweet corn and pork liver to bicycle tires on Sunday.

Nasdaq fits are -62. Here’s why you want to be long gold. Inflation will get forced down our gullets, courtesy of the trade war.

Gold futures are +0.45%.

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22 comments

  1. roguewave

    Just climbed down from the trading turret.
    Just converted my copper and uranium stocks to silver and gold miners located in Mexico (owned by Australian mining companies).
    Now I will just sit back and have a margarita and wait for gold to run like the wind and the gold/silver ratio to drop.
    https://www.youtube.com/watch?v=eyCEexG9xjw

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  2. roguewave

    Some Jim Grant quotes:

    “sovereign debt” = “return-free risk”

    compared to negative interest rates

    “gold is at least a good honest zero”

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  3. trumpmeister

    China can only slap tariff on 75 billions of our good while we kill them with tariff on 300 billions of their good. That’s called winning there. If we will come out of this war with a few bruises but China will be devastated. If I am Trump, I would keep escalating the trade war, destroying the China economy in the process, and seeding dissent among their people. Obedience is easy when people have hope. It’s not easy when they’re unemployed without food on the table.

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  4. rigged game

    Destroying the Chinese economy is an idiotic concept supported by idiots, like the brain-challenged Trump. A healthy functioning China
    is a good customer for USA products and services.

    If we can’t compete on an item due to “labor costs”, we shouldn’t
    be trying to produce and sell that item.

    We need to get our lazy asses off I-Phones and porn, and go to work.

    And bring in smart, healthy and strong Mexcuns to do work.

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    • omfgitsjd

      Had China not started flexing its military muscles in the pacific, they could have enjoyed their economic advantages of US relations. Instead, they made the natural choice to go it alone. It could have been Gumby that got elected here and it would be the same.

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    • s.k.

      While you may be content to trade our intellectual treasures for cheaply made disposable items thankfully there are plenty of patriotic Americans who are not and fed up with the unethical theft of our technology and patents.

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    • trumpmeister

      Trump is a billionaire while you’re a homeless piker getting free Internet your local library. We know who’s the moron here. China is a threat whose intention is to dominate and control the world. Their policies and actions have been nothing but aggression towards its partners and neighbors. At the end of the day, the supply chain in China can be rebuilt in 12-24 months. I rather have put deficit equally distributed to countries like Thailand, Vietnam, Malaysia, India, and regions of Africa than concentrating our deficit on China, a country that can’t be trusted and intends to put a 1984 reality on your children. Only a dumbass would cheer for Chins success or a perhaps someone who has a bunch of Chinese stocks.

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  5. spaceman

    DO NOT READ THIS TRUMPSTERS

    https://www.goldmoney.com/research/goldmoney-insights/deeply-negative-nominal-rates-are-on-their-way

    The tariff war between China and America will probably synergise with the cyclical downturn in the credit cycle to trigger a slump on a scale not seen since the early 1930s.

    It will be check-mate for central banks. They were never appointed nor are they technically equipped to save the currency at the expense of widespread bankruptcies, not just in the private sector, but of their governments as well.

    This time, the monetary sins since the ending of the Bretton Woods agreement seem set to come home to roost all of a sudden, even if dollar rates are lowered towards zero and only stay there.

    With all other fiat currencies referenced to the dollar, it will mark the start of a process that is likely to collapse the entire fiat currency system.

    Instead of central banks stabilising the system by monetary easing, the easing itself will guarantee the crisis.

    We can be reasonably certain that we are seeing the start of the dismantling of the dollar-based monetary system.

    Given the trap that Messrs Argarwal & Kimball appear to have unwittingly set for central banks and especially the ECB, it is unlikely the destruction of the value of deposit money will be a drawn-out process. A crack-up boom is not a boom at all, but a currency collapse.

    And given it will emerge from a systemic crisis, likely to commence in the Eurozone but certain to rapidly become global, deeply negative nominal interest rates will ensure a currency collapse happens very quickly once it starts.

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    • ferd

      But won’t free college, free medical, free dental, debt forgiveness for college (i.e., for the relatively rich/more educated), debt forgiveness for medical bills …and, of course, continued engagement in mid-east violence fix all this?

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  6. moosh

    What’s the best hedge for a port heavily concentrated on metals/mining now? Short crude?

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  7. one-eighty

    If Recession Man had focused on the goal of stopping China from stealing technology, he might have been able to achieve that. However, his scattershot moves against allies and his complete failure to get companies to move manufacturing to the USA has doomed him.
    Anyways, it proves that his ignorance and narcissism isn’t just an act but he really is a fucking idiot.

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  8. moosh

    Found it. $TMV & DRIP. 180 – give it up already. How long have you been obsessing on delusions?

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  9. trumpmeister

    Gold silver and BTC or ETH will do extremely well for the next 2 years while everything suck ball

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  10. numbersgame

    I would love to see the math on how China putting 25% auto tariffs on US-manufactured cars will raise US infaltion. If anything, it would reduce US auto exports leading to layoffs, lower consumer spending -> *deflation*.

    Also, Gold Bugs are showing a fundamental misunderstand of inlfation, whihc is a *monetary* effect, especailly if you think it will lead to higher gold prices. A simple example:

    Scenario 1: workers get huge raises. They want to buy stuff, so the retailers and manuafactures raise the price of their goods. The **higher demand for goods** leads to higher prcies on the goods. This is inflation ,and gold would be a good hedge in this case.

    Scneario 2: Tariffs are placed on many imported consumer goods. In this case, workers aren’t making any more, so **their consumption drops**. Manufactures and retailers would ahve to **drop prices** and eat the cost of the tariffs, or suffer lower revenues. THis is ***defaltionary***. Fools buy gold, which goes up based on investor panic/greed, then drops based on fundamentals when the forecasted inflation never appears. (see a 10-yr gold cahrt)

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