Trump says global interest rates need to fall during Davos. The FED pauses rates after Davos. Now yields are cratering after tariffs. IMO, the tariffs are being used as a catalyst to force the FED's hand into more rate cuts down the road. Look at where bond yields are going, since the DXY spiked over the weekend. Lower yields shadow higher probability of lower rates longer term. Trump will keep pulling stunts like he pulled this weekend to force the FED's hand into cutting rates. Black Swan Season is just getting started.
Hence buy all the shit on sale. I’m expecting a vertical stock market, just like the one in Caracas, Venezuela. They have a monthly +20% return, 170% annualized. Ain’t inflation grand!
Richard Cantillon 1755 - macro-economics is boring until you wake up in a penopticon/prison... and all governments have rolled-out UN biometric unified ledgers... papers please!
Yeah, they all fold so easily, you’d think a sovereign nation like Mexico or Canada would fight for their own citizens. It’s a ruse and a game, one in which WE are the ones being played.
Nope, we have more backbone than the Mexicans. Just wait for our second round in 21 days when we'll cut off oil and gas, electricity, hydropower and uranium shipments. But then again, Trump SAID that America doesn't need any of that. Right!
That would just depend. Rosie, on weather of Mexico does its job in securing the border and possibly going after the cartels. So let's not be negative before anything happens
The EU has a money making tariff on every item that enters. The usa autos are not seen because the tariffs are so high that an EU citizen would rather spend less on a hot rod Audi or Merc. These tariffs keep wines and most usa goods out of europe. The the nations add a VAT tax of up to 19%, Trump will not feel remorse for doing the same. If an european car is important, one should rush to the dealer--ditto for wine.
We knew people who would order a usa legal porche, drive them around all summer, put them on a boat, then sell them in the usa on return. This paid all expenses while travelling. I bought a bmw motorrad and drove it around some of the world and into the ground. Sold it to a greek for what I had paid.--Those were the days--
In case most people don't get it, tariffs are inflationary. Lowering interest rates are inflationary. Put them together and you will have a pretty nightmarish situation on your hands. History clearly shows tariffs make a bad situation worse. There is no grey area there. Often trade wars lead to on the ground wars. While I understand Trumps motives and he is being advised by the Oligarch "team", it took fifty years to create this imbalance. In about twenty years you may see the rust belt with a bit of manufacturing back in it, but what will the people be like at that point having endured horrendous times up to that point? I wonder who will thank him in about a years time? I wish him luck. He is going to need it.
It was early spring in the year 1171 AD when Byzantine Emperor Manuel I Komnenos decided to go to war against his much smaller ally-- Venice. And the historical record shows that it was a really bad idea.
The Byzantine Empire was still a vast and powerful state by the late 12th century. But it was becoming obvious to anyone paying attention that they were in serious decline.
The Byzantine treasury was almost always empty. Imperial debt was piling up left and right. Byzantine borders were constantly being invaded by Muslim hordes. And the imperial coin-- the gold solidus-- was beginning to fall out of favor as the dominant currency for international trade.
Perhaps most importantly, there were a great deal of inexperienced or incompetent Emperors who stood by and did nothing while adversaries exploited imperial weakness.
One bright spot in Byzantine foreign relations was with the Republic of Venice; and over time the two cultivated a strong friendship, and enjoyed significant trade and military cooperation. When the Byzantine Empire went to war, for example, Venice would often provide naval and maritime logistics support.
Trade was so strong between the two, in fact, that thousands of Venetian merchants moved permanently to Constantinople.
But it all came to an end in March of 1171. The Emperor very suddenly changed his tune on Venice and started viewing them as rivals who were taking advantage.
To be fair, Venice was definitely a rising power at the time. But they were a pipsqueak compared to the size and strength of the Byzantine Empire… and the Venetians in no way wanted a conflict. They got one anyway.
That spring, Emperor Manuel imprisoned as many as 10,000 Venetians in Constantinople. He also confiscated their assets, properties, and businesses.
The ruler back in Venice (coincidentally known as “the Doge”) tried to negotiate a peaceful, diplomatic solution. But in the end, a war between the two broke out. And while direct military conflict was quite limited, the economic and trade warfare seriously wounded both powers.
In retrospect the long-term consequences were clear: the Byzantine Empire lost a supportive ally, essentially pushing Venice into the arms of Western European powers. The Empire also never quite recovered the lost trade and economic opportunity costs from the war.
That’s because all war-- whether a shooting war or trade war-- is expensive. There are very, very few instances in history in which a nation benefited from prolonged war. In fact, the last guy to consistently wage ‘profitable’ wars was Napoleon… and he understood the key was to end it as quickly as possible.
Maybe that’s the strategy in this new trade war today. Maybe the whole idea is to show people that you’re not afraid to make good on your threats… to show that you’re not bluffing… and that everyone should run to the negotiating table immediately.
Perhaps. But it’s been well-documented that a long-term trade war, i.e. tariffs on goods imported from Canada and Mexico, will be incredibly expensive. Canada sends energy to the US. Mexico sends food. If there are two things that US citizens don’t need to become more expensive, it’s food and fuel.
The rough calculations show that American households will pay a few thousand dollars per year more. Most people can’t afford that, nor are they particularly inclined to try.
The optimists say that America doesn’t need to import any of that stuff, and that “we can produce everything we need at home”.
OK, that’s sort of true. The US has the capability to produce almost everything if it really had to. But to borrow from the great philosopher Chris Rock, “You could drive with your feet if you really had to. But that don’t make it a good f***ng idea.”
Every country, every economy in the world has a finite amount of resources-- workers, raw materials, capital, land, etc. And in a free market, those finite resources are put to their best and highest use… because that’s what generates the most profit, i.e. the most wealth and prosperity.
No one puts resources to work making socks and underwear if they could put those same resources to work developing disruptive technology. And the US economy has that option-- producing goods and services of extremely high value (including technology).
This has been a key driver of wealth in America.
But suddenly having to divert limited resources to something less valuable consequently means… less wealth and prosperity. Bottom line, trying to produce everything at home requires misallocating economic resources into less profitable, less prosperous industries.
And the opportunity cost of doing that cannot be overstated.
There’s another, even bigger problem, though.
The US dollar is already in trouble. Plenty of countries have already started to line up against the dollar; and as we’ve discussed in the past, foreign central banks have started ditching the dollar to buy gold instead.
This is a big problem for the US government; the Treasury Department desperately needs foreigners to keep funding America’s massive budget deficits. And even if the budget deficits miraculously disappear, America still needs foreign nations to hold on to the US government bonds they already own.
Threatening (and then actually following through) with tariffs will only make foreign countries less inclined to own US dollars.
Secretary of State Marco Rubio even admitted this weekend that within five years, “there will be so many countries transacting in currencies other than the dollar that we won’t have the ability” to impose sanctions or tariffs.
Less demand from foreign governments and central banks to own US dollars ultimately means higher inflation and higher interest rates across the board-- including higher mortgage rates. So more expensive food. More expensive fuel. And more expensive housing.
Again, this trade war might be a ploy designed to force everyone to the negotiating table… and perhaps they expect it will be over in a matter of days or weeks. But that’s a risky assumption.
A century ago, the ‘experts’ back in 1914 assumed that World War I would be over in a few months, and that the troops would “be home before the leaves fall from the trees” (according to what Kaiser Wilhelm of Germany reportedly told his soldiers departing for the front line).
This, too, may be long and costly. But even if it's short, declaring war on your own ally could easily create lasting consequences for America by accelerating backlash against the dollar.
Retaliations are to be expected! Perhaps the United States of America is looking for new trading partner and parting with the actual ones? 😅 Just being ironical of course.
If those countries that are getting tariffs and their goods are too expensive and don’t sell in America, they can’t simply sell to others countries as they have their economic problems. Especially automakers that build cars for the American market
Higher prices will most likely cut sales drastically, especially on the lower income tiers. How will companies deal with this problem is up to their strategy, but generally they will go where the sales are being made and profits are.
Fascist fleet trucks for government/buraucracies what else?... military industry - NGOs - and pigdogs with no allegiance to the US will do just fine. "It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." [Thomas Sowell] MAKE IT UP!
Maybe President Trump understands the dire predicament of the economy of the United States and that most of the problem stems from NGO's The United Nations and other organizations that accepted the American tax payers money then turned around and weaponized it against us. Most nations flat out never payed us back in outstanding loans.
If America goes down he's taking them all with us.
Trump is becoming a wind sock. Can't believe him.
President Trump "becoming" unpredictable. lol
He's a deal maker. And in charge of the military.
He's not supposed to be predictable.
Trump says global interest rates need to fall during Davos. The FED pauses rates after Davos. Now yields are cratering after tariffs. IMO, the tariffs are being used as a catalyst to force the FED's hand into more rate cuts down the road. Look at where bond yields are going, since the DXY spiked over the weekend. Lower yields shadow higher probability of lower rates longer term. Trump will keep pulling stunts like he pulled this weekend to force the FED's hand into cutting rates. Black Swan Season is just getting started.
Very good analysis.
Hence buy all the shit on sale. I’m expecting a vertical stock market, just like the one in Caracas, Venezuela. They have a monthly +20% return, 170% annualized. Ain’t inflation grand!
None of this ever hurts the (((governments))), just us.
Richard Cantillon 1755 - macro-economics is boring until you wake up in a penopticon/prison... and all governments have rolled-out UN biometric unified ledgers... papers please!
Sounds good......Mexico is caving already.....
Yeah, they all fold so easily, you’d think a sovereign nation like Mexico or Canada would fight for their own citizens. It’s a ruse and a game, one in which WE are the ones being played.
Nope, we have more backbone than the Mexicans. Just wait for our second round in 21 days when we'll cut off oil and gas, electricity, hydropower and uranium shipments. But then again, Trump SAID that America doesn't need any of that. Right!
That would just depend. Rosie, on weather of Mexico does its job in securing the border and possibly going after the cartels. So let's not be negative before anything happens
🤣
The EU has a money making tariff on every item that enters. The usa autos are not seen because the tariffs are so high that an EU citizen would rather spend less on a hot rod Audi or Merc. These tariffs keep wines and most usa goods out of europe. The the nations add a VAT tax of up to 19%, Trump will not feel remorse for doing the same. If an european car is important, one should rush to the dealer--ditto for wine.
Excellent analysis
We knew people who would order a usa legal porche, drive them around all summer, put them on a boat, then sell them in the usa on return. This paid all expenses while travelling. I bought a bmw motorrad and drove it around some of the world and into the ground. Sold it to a greek for what I had paid.--Those were the days--
In case most people don't get it, tariffs are inflationary. Lowering interest rates are inflationary. Put them together and you will have a pretty nightmarish situation on your hands. History clearly shows tariffs make a bad situation worse. There is no grey area there. Often trade wars lead to on the ground wars. While I understand Trumps motives and he is being advised by the Oligarch "team", it took fifty years to create this imbalance. In about twenty years you may see the rust belt with a bit of manufacturing back in it, but what will the people be like at that point having endured horrendous times up to that point? I wonder who will thank him in about a years time? I wish him luck. He is going to need it.
Clown show
He isnt going to do any of this shit. Its just a bargaining tool.
Enjoying the show? :)
Exactly! All these people seem to think these theatrics matter.
And they wonder why nobody likes the americans🤦🏻♂️Bulling tactics will come back to bite
February 3, 2025
It was early spring in the year 1171 AD when Byzantine Emperor Manuel I Komnenos decided to go to war against his much smaller ally-- Venice. And the historical record shows that it was a really bad idea.
The Byzantine Empire was still a vast and powerful state by the late 12th century. But it was becoming obvious to anyone paying attention that they were in serious decline.
The Byzantine treasury was almost always empty. Imperial debt was piling up left and right. Byzantine borders were constantly being invaded by Muslim hordes. And the imperial coin-- the gold solidus-- was beginning to fall out of favor as the dominant currency for international trade.
Perhaps most importantly, there were a great deal of inexperienced or incompetent Emperors who stood by and did nothing while adversaries exploited imperial weakness.
One bright spot in Byzantine foreign relations was with the Republic of Venice; and over time the two cultivated a strong friendship, and enjoyed significant trade and military cooperation. When the Byzantine Empire went to war, for example, Venice would often provide naval and maritime logistics support.
Trade was so strong between the two, in fact, that thousands of Venetian merchants moved permanently to Constantinople.
But it all came to an end in March of 1171. The Emperor very suddenly changed his tune on Venice and started viewing them as rivals who were taking advantage.
To be fair, Venice was definitely a rising power at the time. But they were a pipsqueak compared to the size and strength of the Byzantine Empire… and the Venetians in no way wanted a conflict. They got one anyway.
That spring, Emperor Manuel imprisoned as many as 10,000 Venetians in Constantinople. He also confiscated their assets, properties, and businesses.
The ruler back in Venice (coincidentally known as “the Doge”) tried to negotiate a peaceful, diplomatic solution. But in the end, a war between the two broke out. And while direct military conflict was quite limited, the economic and trade warfare seriously wounded both powers.
In retrospect the long-term consequences were clear: the Byzantine Empire lost a supportive ally, essentially pushing Venice into the arms of Western European powers. The Empire also never quite recovered the lost trade and economic opportunity costs from the war.
That’s because all war-- whether a shooting war or trade war-- is expensive. There are very, very few instances in history in which a nation benefited from prolonged war. In fact, the last guy to consistently wage ‘profitable’ wars was Napoleon… and he understood the key was to end it as quickly as possible.
Maybe that’s the strategy in this new trade war today. Maybe the whole idea is to show people that you’re not afraid to make good on your threats… to show that you’re not bluffing… and that everyone should run to the negotiating table immediately.
Perhaps. But it’s been well-documented that a long-term trade war, i.e. tariffs on goods imported from Canada and Mexico, will be incredibly expensive. Canada sends energy to the US. Mexico sends food. If there are two things that US citizens don’t need to become more expensive, it’s food and fuel.
The rough calculations show that American households will pay a few thousand dollars per year more. Most people can’t afford that, nor are they particularly inclined to try.
The optimists say that America doesn’t need to import any of that stuff, and that “we can produce everything we need at home”.
OK, that’s sort of true. The US has the capability to produce almost everything if it really had to. But to borrow from the great philosopher Chris Rock, “You could drive with your feet if you really had to. But that don’t make it a good f***ng idea.”
Every country, every economy in the world has a finite amount of resources-- workers, raw materials, capital, land, etc. And in a free market, those finite resources are put to their best and highest use… because that’s what generates the most profit, i.e. the most wealth and prosperity.
No one puts resources to work making socks and underwear if they could put those same resources to work developing disruptive technology. And the US economy has that option-- producing goods and services of extremely high value (including technology).
This has been a key driver of wealth in America.
But suddenly having to divert limited resources to something less valuable consequently means… less wealth and prosperity. Bottom line, trying to produce everything at home requires misallocating economic resources into less profitable, less prosperous industries.
And the opportunity cost of doing that cannot be overstated.
There’s another, even bigger problem, though.
The US dollar is already in trouble. Plenty of countries have already started to line up against the dollar; and as we’ve discussed in the past, foreign central banks have started ditching the dollar to buy gold instead.
This is a big problem for the US government; the Treasury Department desperately needs foreigners to keep funding America’s massive budget deficits. And even if the budget deficits miraculously disappear, America still needs foreign nations to hold on to the US government bonds they already own.
Threatening (and then actually following through) with tariffs will only make foreign countries less inclined to own US dollars.
Secretary of State Marco Rubio even admitted this weekend that within five years, “there will be so many countries transacting in currencies other than the dollar that we won’t have the ability” to impose sanctions or tariffs.
Less demand from foreign governments and central banks to own US dollars ultimately means higher inflation and higher interest rates across the board-- including higher mortgage rates. So more expensive food. More expensive fuel. And more expensive housing.
Again, this trade war might be a ploy designed to force everyone to the negotiating table… and perhaps they expect it will be over in a matter of days or weeks. But that’s a risky assumption.
A century ago, the ‘experts’ back in 1914 assumed that World War I would be over in a few months, and that the troops would “be home before the leaves fall from the trees” (according to what Kaiser Wilhelm of Germany reportedly told his soldiers departing for the front line).
This, too, may be long and costly. But even if it's short, declaring war on your own ally could easily create lasting consequences for America by accelerating backlash against the dollar.
To your freedom,
James Hickman
Co-Founder, Schiff Sovereign LLC
Just sharing this with all........
https://www.armstrongeconomics.com/world-news/govt-incompetence/tariffs-depression-do-we-just-go-kaput/
The Market Sniper did a podcast on "Tariff Wars: The Global Takedown Begins." Some good takeaways.
Thanks! I always love his straight to the point interviews.
Retaliations are to be expected! Perhaps the United States of America is looking for new trading partner and parting with the actual ones? 😅 Just being ironical of course.
If those countries that are getting tariffs and their goods are too expensive and don’t sell in America, they can’t simply sell to others countries as they have their economic problems. Especially automakers that build cars for the American market
Higher prices will most likely cut sales drastically, especially on the lower income tiers. How will companies deal with this problem is up to their strategy, but generally they will go where the sales are being made and profits are.
Fascist fleet trucks for government/buraucracies what else?... military industry - NGOs - and pigdogs with no allegiance to the US will do just fine. "It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." [Thomas Sowell] MAKE IT UP!
Yes, further straining and crushing small(er) businesses. Systemic systematic thinning of the herd.
Later Jay
Another step along the way to usher in the Great Reset & 10 kingdoms.
Maybe President Trump understands the dire predicament of the economy of the United States and that most of the problem stems from NGO's The United Nations and other organizations that accepted the American tax payers money then turned around and weaponized it against us. Most nations flat out never payed us back in outstanding loans.
If America goes down he's taking them all with us.