Bye Bye Trade War? China Plans $1 Trillion Buying Spree to Reduce US Trade Deficit

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SLVRBK

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I’ve found it strange, there’s a lot about what happened out there but not much in the way of detail, I suppose that’s what they do it for, the g7 (as all of these summits are) is the dog and pony show and all the grooming is done in private. My opinion, for what it’s worth is, there’s a concern on the part of the eu that brexit could create a rift in trade with the US and they seem to understand that a majority of taxpayers in the US support the potus, generally speaking, so he’s not backing down and they are being forced to. Japan continues to rely on us for protection they are in no position to change their pro US stance unless they are resigned to a Chinese future. The g7 leaders are genuinely fearful of a trade war and know the only country left standing would be us, as in US so they’re working overtime on that trying to head it off. France inviting Iran was not surprising and not a bad thing and it wouldn’t come as a shock if Trumps team wasn’t behind it, Trump, for all his bluster, works well through intermediaries and once everyone is at the table it’s shown he is tough but respectful.
So in a nutshell nothing earth shattering but a lot of positive forward momentum. My prior gut reaction hasn’t changed all that much except I think the EU is showing more concern about the future of the EU post brexit than I expected they would.
I still fully expect China will be at the negotiating table in the next 30 days.
AND
We’re still in a buy window but signs the window is closing are apparent in the numbers.
My only concern with EU deal is that one country can torpedo the thing: see Macron threatening the MERCOSUR deal and Bulgaria killing the US/EU deal that was nearly completed under Obama.

Japan deal, from what little is available seems to stick pretty closely to TPP with maybe a few things weighing it in our direction. Japanese seem to think Abe gave away too much but, as you said, they know where their bread is buttered.

The Iran development at G-7 was a good thing, all reports said the France cleared everything with WH in advance. We'll see what comes of it but at least a step in the right direction.

I think China will come to the table, especially after their losses at the WTO earlier this year, but they need a way to save face and prop up Xi. I do not think they will meet the requests regarding SOE's and I'm not sure how that will be handled in the trade negotiations/WTO...to me that is one of the primary sticking points.
 

ksupoke

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My only concern with EU deal is that one country can torpedo the thing: see Macron threatening the MERCOSUR deal and Bulgaria killing the US/EU deal that was nearly completed under Obama.

Japan deal, from what little is available seems to stick pretty closely to TPP with maybe a few things weighing it in our direction. Japanese seem to think Abe gave away too much but, as you said, they know where their bread is buttered.

The Iran development at G-7 was a good thing, all reports said the France cleared everything with WH in advance. We'll see what comes of it but at least a step in the right direction.

I think China will come to the table, especially after their losses at the WTO earlier this year, but they need a way to save face and prop up Xi. I do not think they will meet the requests regarding SOE's and I'm not sure how that will be handled in the trade negotiations/WTO...to me that is one of the primary sticking points.
I don’t disagree with anything you just said in fact I think you understand this in a way most don’t.
My point is that everything you posted, to my way of thinking, emphasizes the precarious nature of the economic footing of the EU.
So now I’ll say what I’ve been hinting at, imo and it’s jmo, I think you’re going to see a restructuring of the EU with several dropping out, I would remove the term (think) if Trump gains a 2nd term, at that point it’s a virtual certainty.
 

SLVRBK

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I don’t disagree with anything you just said in fact I think you understand this in a way most don’t.
My point is that everything you posted, to my way of thinking, emphasizes the precarious nature of the economic footing of the EU.
So now I’ll say what I’ve been hinting at, imo and it’s jmo, I think you’re going to see a restructuring of the EU with several dropping out, I would remove the term (think) if Trump gains a 2nd term, at that point it’s a virtual certainty.
Are you thinking the Visegrad countries or some mix of Italy/Greece/Spain?
 

ksupoke

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Are you thinking the Visegrad countries or some mix of Italy/Greece/Spain?
I’m not sure where it starts, Austria or even France or Denmark, none of those would be a big surprise, from what I’ve read Macron is being pressured heavily to review France’s position, obviously Poland as part of the visegrad group has already voiced their displeasure, and Spain is a wild card given their current way of governance, if I had to guess at least 1 maybe 2 or even all of the vieregrad group 1st out then maybe Denmark or France and what I expect is that once another large domino goes that will force a restructuring, what shape it takes is anyone’s guess. I expect they’ll restructure around national security and industry (oil being a big one) that is crucial to that and less around trade & currency and most countries will work out trade deals in smaller blocs or independent.
That will be good for the US and the EU, IMO.
 
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SLVRBK

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Not sure if you saw but China currency hit a 10 yr low, just the threat of American co’s leaving is causing major upheaval.
Hadn't looked at currencies outside Euro and CAD today but they're all cheap right now. As has been discussed here, the supply chains have been shifting since the trade war started (even before) but it seems to be accelerating. We are seeing clients move module fabrication out of China and to ME, Korea, Mexico and even USGC (to a point).
 

ksupoke

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Hadn't looked at currencies outside Euro and CAD today but they're all cheap right now. As has been discussed here, the supply chains have been shifting since the trade war started (even before) but it seems to be accelerating. We are seeing clients move module fabrication out of China and to ME, Korea, Mexico and even USGC (to a point).
China's has a few strings pulling on it beyond the current trade distractions. The Chinese gvt is looking at issuing a China gvt backed crypto that will still be controlled by the state owned banks, so they want to replace their worthless fiat currency with a less than worthless crypto currency they are planning on distributing it through Chinese companies, in other words they are not too far removed from money laundering, and they expect the row of the world to both accept it and in the future use it to peg their currency against.
Additionally it's not block chain and they will know specifically who owns what - there was a story, I thought I posted here, a while back where they will have, essentially, loyalty currency, you are disloyal you won't be able to get a job, go to school, get credit etc.... https://www.businessinsider.com/china-social-credit-system-punishments-and-rewards-explained-2018-4/

The Euro's have thrown China for a loop, it was widely anticipated a few months back that in the event of a trade dispute that they would remain neutral, that hasn't happened.

The approach China is pushing is right up there with the USSR of the Reagan era, it will be interesting to see if they take a similar tact or if they move in a more violent effort against their own people, I suspect at least initially it will be more violent, then it will be an issue if the row (us as in US) will stand by and watch or interfere.

I have a friend in my firm from China who just got back from his fathers funeral, he told me he would never go back for fear of not getting out, that is what happened to 2 of my good friends at Solectron who were Iranian.
Regardless of anything else, at least for now and into the foreseeable future, in terms of a physical gift not health related, there is nothing better than winning the birth lottery.
 

SLVRBK

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China's has a few strings pulling on it beyond the current trade distractions. The Chinese gvt is looking at issuing a China gvt backed crypto that will still be controlled by the state owned banks, so they want to replace their worthless fiat currency with a less than worthless crypto currency they are planning on distributing it through Chinese companies, in other words they are not too far removed from money laundering, and they expect the row of the world to both accept it and in the future use it to peg their currency against.
Additionally it's not block chain and they will know specifically who owns what - there was a story, I thought I posted here, a while back where they will have, essentially, loyalty currency, you are disloyal you won't be able to get a job, go to school, get credit etc.... https://www.businessinsider.com/china-social-credit-system-punishments-and-rewards-explained-2018-4/


The Euro's have thrown China for a loop, it was widely anticipated a few months back that in the event of a trade dispute that they would remain neutral, that hasn't happened.

The approach China is pushing is right up there with the USSR of the Reagan era, it will be interesting to see if they take a similar tact or if they move in a more violent effort against their own people, I suspect at least initially it will be more violent, then it will be an issue if the row (us as in US) will stand by and watch or interfere.

I have a friend in my firm from China who just got back from his fathers funeral, he told me he would never go back for fear of not getting out, that is what happened to 2 of my good friends at Solectron who were Iranian.
Regardless of anything else, at least for now and into the foreseeable future, in terms of a physical gift not health related, there is nothing better than winning the birth lottery.
I have read plenty on the Social Credit System in China but haven't read about the crypto currency. Xi appears to have learned more from Mao than Deng but I am expecting the crackdown on HK to be violent. As my friend in China has told me, nothing more dangerous to individual liberty than a one party system.

I have posted here that the Euro's appreciate our move on China, something they would never do but they know it needed to be done and needed someone else to do the heavy lifting. China made the diplomatic rounds trying to get EU on their side vs US but were told to pound sand. I assumed this was why the Chinese went after the EU first in their WTO disputes regarding being recognized as a market economy.
 

ksupoke

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I have read plenty on the Social Credit System in China but haven't read about the crypto currency. Xi appears to have learned more from Mao than Deng but I am expecting the crackdown on HK to be violent. As my friend in China has told me, nothing more dangerous to individual liberty than a one party system.

I have posted here that the Euro's appreciate our move on China, something they would never do but they know it needed to be done and needed someone else to do the heavy lifting. China made the diplomatic rounds trying to get EU on their side vs US but were told to pound sand. I assumed this was why the Chinese went after the EU first in their WTO disputes regarding being recognized as a market economy.
The euros appreciate our stance now, a couple of years or so back it was a different story.
Decorum aside, Trump and his team have been effective, imo, precisely because they haven’t approached trade politically they’ve approached it for what it is, business and you always negotiate from your strengths and most importantly, to win.
I was in an emba program at a private institution in Palo Alto, one of the guest lecturers said it best, win win is a fantasy sure both sides can come out ahead of where they were but there’s only one winner.
 

SLVRBK

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The euros appreciate our stance now, a couple of years or so back it was a different story.
Decorum aside, Trump and his team have been effective, imo, precisely because they haven’t approached trade politically they’ve approached it for what it is, business and you always negotiate from your strengths and most importantly, to win.
I was in an emba program at a private institution in Palo Alto, one of the guest lecturers said it best, win win is a fantasy sure both sides can come out ahead of where they were but there’s only one winner.
Gotta say, I am surprised Beijing allowed HK's Carrie Lam to withdraw the extradition bill.
 

Binman4OSU

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Dear goodness the Chinese are playing the Trump Admin hard.

This morning the US Trade Representatives office exempted ~400 products from tariffs that had been placed against them by the Trump admin as a gesture of good will and what they said a way to boost odds of a trade deal. Items where the tariffs were removed include motorcycles, parts for rail cars, solar panels, dog leashes and harnesses, electrical tape, power tools and many more

5 hrs later.

Chinese trade officials canceled their scheduled visit to US Farm States that was supposed to occur next week. All 3 major stock indicators on Wall St fell on the announcement the Chinese trade officials had canceled their visit to the US.

Got the tariff exemptions up front and then bailed
 

Binman4OSU

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Report US and China have reached a small deal on trade. Reports so far that deal is expected to be some agricultural concessions by China in exchange for some Tariff relief from US.

Part of the deal includes the US delaying the Oct 15 and Dec 15 tariff hikes in place now per Derek Scissors who has advised the WH in this matter in the past
 

NotOnTV

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So under Obama I was on track to retire at 65...no sooner. Under the Trump presidency, I am on track to retire at 60 (two years) and can move most of my assets into conservative, income generating type investments. That is good, because after the Democrats/MSM have run the presidency into the crapper with this false narrative, and someone like Warren gets swept in to destroy our current way of life, cash and cash equivalents are where you are going to want to be.
 
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So under Obama I was on track to retire at 65...no sooner. Under the Trump presidency, I am on track to retire at 60 (two years) and can move most of my assets into conservative, income generating type investments. That is good, because after the Democrats/MSM have run the presidency into the crapper with this false narrative, and someone like Warren gets swept in to destroy our current way of life, cash and cash equivalents are where you are going to want to be.
Except you have to worry about inflation...
 
Nov 6, 2010
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So under Obama I was on track to retire at 65...no sooner. Under the Trump presidency, I am on track to retire at 60 (two years) and can move most of my assets into conservative, income generating type investments. That is good, because after the Democrats/MSM have run the presidency into the crapper with this false narrative, and someone like Warren gets swept in to destroy our current way of life, cash and cash equivalents are where you are going to want to be.
Any worry for your grandkids??