Yep, the markets will simply shift there is no huge excess of grains available globally.
There are also only a couple of countries that even begin to compete with the US in grain production as far as type and quality.
I’m for continuing to pile it on until it hurts.
Yep! The only card left to play for the Chinese is the US treasury Notes they hold, and many believe that would be foolish on China’s part if they decided to liquidate those notes which would essentially kiss goodbye any future trade relationship with the US. That ultimately would force the FED’s hand by having to step in to buy those notes up preventing the US economy from a major meltdown not to mention a devaluing of the notes themselves that would be seen as a huge disruption in their yields before the FED could have enough time to stabilize our currency should China decide to go that route. I highly doubt they will, but desperate animals do desperate things.
I keep hearing that particularly from the Paulitarian Mob but there’s one problem. Those are not demand notes. The treasury is only obligated to redeem them when they reach maturity and so if they tried it would prove just how weak they actually are.
The only way they could dump them would be to put them on the bond market and a mass dump would simply crash their value overnight which would basically bankrupt the Chinese gov’t.
In return, the FR would pick them up for pennies on the dollar immediately stabilizing the dollar while the yuan would become worthless overnight.
By all means China if that’s your last shot take it.
Actually, Argentina is buying USA produce to sell to China.
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Yep and the net effect of that will be to eventually drive prices up, not down.
There isn’t an overabundance of feed and cereal grains and there simply isn’t enough protein to go around hence soybeans won’t be taking a long term dive either.
The biggest danger really is that US farmers may get scared into shifting production to other ag products which will create a serious shortage which will of course drive up the prices rapidly when the effects ripple through.
Trump is doing the right thing and the smart thing in putting much of the money from the tariffs right back into the pockets of farmers to keep their farms viable.
US President Donald Trump’s conviction that “trade wars are good, and easy to win” certainly runs against well-established economic doctrine and history, both of which suggest no one can win and all will lose in such a mutually destructive war.
Worse can happen than just material loss to the countries directly involved. While a country may try to destroy another by targeting its economy rather than its military, history suggests that a full-blown trade war inevitably leads to a shoot-out between nations.
“The impact is being felt throughout Africa, where mining companies are shutting down operations because Chinese demand no longer exists.
Articles like this highlight the ancillary impacts of a weakened Chinese economy.
Despite the proclamations by Beijing about their ability to withstand the withdrawal of the U.S. as a primary customer for manufactured goods, reality shows they cannot.
There is a confluence of events all leading to radical changes just below the surface. China has been burning cash to subsidize industries impacted by U.S. tariffs. Simultaneously Beijing has lowered the value of their currency in an effort to eliminate the tariff impact in the cost of their finished goods. However, as the ideological economic conflict between the U.S. and China continues, Beijing cannot hold their position indefinitely.
[…] A decelerating construction boom in China also has led to a decline in demand for copper while Beijing’s move to raise standards for electric vehicles qualifying for subsidies is depressing the market for cobalt.
An economic slowdown in some African countries is seen as tied to China’s economic slowdown, accelerated by the tariff battle. (link)
Countries that attached their economy to purchase agreements with China over the last 20 years became dependent on those exports. As China slows or stops their purchases those dependent economies are now at risk.
[…] Martyn Davies, managing director of emerging markets and Africa at Deloitte, said China’s demand for commodities has underpinned Africa’s growth for 20 years.
“Any commodity-exporting economy’s growth model has been underpinned by China’s demand for commodities in the last generation,” Davies said.
“This in itself has resulted in complacency in many commodity exporting countries because if you had China growing at 7 or 8 per cent, you don’t need to struggle. “Unfortunately,” Davies said, “the world has changed.” (link)
And now China’s biggest weakness starts to surface. A country that cannot feed its own population even during the best of times, is now facing a downturn in economic and employment activity while the need to import food remains.
[…] analysts say that while countries that export cobalt, copper and iron ore will be hardest hit as Beijing – the major buyer of Africa’s hard commodities – diversifies the sourcing of its imports during the trade war, opportunities are opening up for exporters of soft commodities, such as agricultural products. (link)
There comes a time in the life of a panda when bamboo is no-longer taken for granted.”
Linked article:
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So trumps trade war is hurting our ally’s too…
President Trump: “We Will No Longer Surrender This Country, or Its People, To The False Song of Globalism”
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Yeah, it’s common knowledge that money is made in war, perhaps that’s the hawks plan in Trump’s orbit.
https://www.google.com/amp/s/www.newsweek.com/trump-trade-war-china-imf-slow-growth-1390389%3Famp=1
President Trump is having dinner tonight with Tim Cook, aka “ Tim Apple .” This dinner comes on the heels of USTR Lighthizer announcing a postponement of “next step” 10 percent tariffs against Chinese manufactured products… Interestingly, the one of the product groups within the delay is personal computers…. Interestingly, Tim Apple was going to launch production assembly of the Macintosh personal computer in China.
To say that Tim Cook has been attempting to define and quantify the strength of President Trump’s tariff position against China would be an understatement. Even before president-elect Trump took office, Tim Cook was engaged on this specific aspect.
As a responsible steward for the brand, the engagement by “Tim Apple” makes lots of sense. The engaged approach by CEO Cook is what all multinationals should do. Advocate for their interests; keep an open mind to aspects that are larger than self-interest; keep a respectful seat at the table; and be a responsible steward for his American shareholders.
Ultimately Tim Cook is recognizing President Trump will advance those policies that benefit Main Street and he will avoid policies that do not benefit Main Street. Trump’s Main Street economic patriotism is likely a paradigm shift for Cook; amid a career experience of politicians advancing Wall Street interests. Hence, the constant evaluation.
Meanwhile, the strength of Main Street employment continues to show up in the data. Jobs, jobs, jobs drives the Main Street economy. The BLS data release today shows just how many jobs are being created by the ongoing policy of MAGAnomics.
(BLS) Unemployment rates were lower in July in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today.
[…] Nonfarm payroll employment increased in 5 states in July 2019 and was essentially unchanged in 45 states and the District of Columbia.
[…] Nonfarm payroll employment increased in five states in July 2019. The largest job gains occurred in Texas (+35,200), Florida (+22,900), and Washington (+13,400). The largest percentage gains occurred in Utah (+0.7 percent), Idaho (+0.5 percent), and Washington (+0.4 percent).
Perhaps because it’s not working…
Consumer Spending Beats Expectations – Shoppers Reject Phony Media Recession Fears…
If you needed any empirical evidence to prove the doomsday proclamations by the financial pundits are false claims, just look at the July consumer spending results. July spending more than doubled expectations.
July results were +0.7 percent, against the economic forecast of +.03 percent. Consumer spending makes up over two-thirds of the U.S. GDP and overall economy. Doesn’t exactly sound like Main Street is on the precipice of a recession. Oh my.
Average wage growth remains +3.5% year-over-year. The growth of overall income for American workers exceeds +5.4 percent year-over-year. Unemployment is a low 3.6% and U.S. consumer inflation remains low at 1.4 percent. Meaning: the middle-class has more disposable income to save or SPEND ; and that’s what is happening….
- Reminder #1: Consumer spending is two-thirds of the U.S. economy.
- Reminder #2: We consume more than 80 percent of our own production (products created in USA). We do not rely on exports.
- Reminder #3: Because of #1 and #2, the “Main Street” U.S. economy is self sustaining -much stronger- and more protected from the negative impacts on the global economy.
- Reminder #4: Who/What is at risk from global contraction? The Wall Street economy (compromised primarily of multinationals). What is not at risk, the Main St economy.
- Reminder #5: Because of #3 and #4, Wall Street can drop while Main Street thrives.
This is the fundamental disconnect. These Main Street results, this dynamic, is the space between two economic engines that CTH has been describing for three years. The investment class on Wall Street can go through pain, while the middle-class on Main Street thrive . We are in the space between.
Wall Street Journal: WASHINGTON—American shoppers gave the U.S. economy a solid boost in July, a counter to weakness in the manufacturing sector and Wall Street jitters about faltering growth.
Retail sales, a measure of purchases at stores, restaurants and online, climbed a seasonally adjusted 0.7% in July from a month earlier, the Commerce Department said Thursday.
The robust report—the strongest reading since March and a sign that American consumers remain a source of fuel for the economy—is a positive signal for the U.S. amid warning signs of a global economic slowdown. (link)
Oh noes, the Deplorables are shopping:
Walmart (WMT) beat expectations on both the top and bottom lines for its second quarter. The world’s largest retailer also boosted its fiscal 2020 adjusted EPS and same-store sales forecast. Walmart shares soared 5% as of market open Thursday
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Direct on- farm employment accounted for about 2.6 million of these jobs, or 1.3 percent of U.S. employment.
Farming accounts for only 1.3% of American jobs . Although it is a large percentage of our exports .
The United States has 12.75 million manufacturing jobs , according to the Bureau of Labor Statistics . That employs 8.5 percent of the workforce. These jobs pay 12 percent more than all others. In 2017 , they earned an average of $84,832 per worker.
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If by economic doctrine you mean bend over and take it because the people are too cowardly, too entitled to suffer inconvenience to protect the future of a nation … well, that’s how this whole service economy guff started.
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Corporations began moving manufacturing over to China after Nixon paved the way. They were taking advantage of cheap labor. You can blame this on the Democratic Party all you wish, but the owners of corporations and there members (shareholders) come from all walks of life and have only one thing universally in common. The very human nature of greed.
Brexit Presents Unique Trade Opportunity for U.S. and U.K. Economic Alliance….
First rule in geopolitics, it’s always about the economics. Second rule in geopolitics: refer to rule #1. Understanding this basic truism is the key to understand how President Trump is able to be so effective. There are trillions at stake, and infinite interests.
“Economic security is national security.” ~President Trump
All politics circles back to the underlying economics; whether it is an individual financial self-interest for a specific politician, or whether it is a larger financial interest for a group or even a nation. Everything is always about the money, and that essential truth is why Donald Trump is so uniquely qualified, influential and stunningly effective. Today :
(VIA CBC) The United States would “enthusiastically” support a no-deal Brexit if that is what the British government decided to do, U.S. national security adviser John Bolton told reporters on Monday.
[…] As the United Kingdom prepares to leave the European Union on Oct. 31, its biggest geopolitical shift since the Second World War, many diplomats expect London to become increasingly reliant on the United States.
“If that’s the decision of the British government we will support it enthusiastically, and that’s what I’m trying to convey. We’re with you, we’re with you,” said Bolton, in London for two days of talks with British officials. The U.S. administration is seeking an improved U.S.-British relationship with Prime Minister Boris Johnson after sometimes tense ties between Donald Trump and Johnson’s predecessor, Theresa May.
A central message Bolton was making is that the United States will help cushion Britain’s exit from the EU with a free trade agreement that is being negotiated by U.S. Trade Representative Robert Lighthizer and his British counterpart, Liz Truss. (read more)
Also today from New Jersey:
Notice how President Trump doesn’t rely on John Bolton to deliver his message. President Trump builds inherent checks into the process when others deliver his messages about economic deals, strategies and trade proposals. Classic CEO Executive Trump.
It is not that President Trump doesn’t trust Bolton, but rather Trump understands a difference in political priority exists. Donald Trump isn’t a politician, he’s working through a plan for what he views (we agree) is bigger than any ideological aspects.
The economics of all things is the priority for President Trump…. step into that lane, or bring forth a policy directive that crosses into that economic lane, and you step into an administration agenda item completely controlled and directed by Donald Trump.
Every policy engagement from the big to the small goes through the prism of economics first and last. Essentially this is the foundation of the Trump doctrine. Brexit, Huawei, Iran, the larger EU etc. all cross paths with President Trump’s primary focus, U.S. economic wealth, influence and security.
Donald Trump isn’t leaving anything to chance or misinterpretation…. He’s full bore economic Obsessive Compulsive! …And unapologetic about it.
President Trump has single-handily, and purposefully, stalled the global economy and is forcing massive amounts of wealth back into the United States. In essence Titan Trump is engaged in a process of: (a) repatriating wealth (trade policy); (b) blocking exfiltration (main street policy); (c) creating new and modern economic alliances based on reciprocity; and (d) dismantling the post WWII Marshall plan for global trade and one-way tariffs.
Every minute element within this process, no matter how seemingly small, has President Trump’s full attention. He has assignments to many, but he relies upon none.
(Reuters) – The United States overtook Germany as the biggest supplier of imports into Britain for the first time since the early 2000s in the last financial year, the UK government said on Friday.
British trade minister Liz Truss has said the United States tops her priority list for post-Brexit trade deals and has been in Washington this week, along with Foreign Secretary Dominic Raab, to promote UK-US ties.
Imports from the United States increased by 14% to 78.27 billion pounds ($94.43 billion) in the year to April, the Department for Trade said, while imports from Germany fell by 0.1% to 78.26 billion pounds.
While Germany has long been Britain’s biggest source of imports, the United States was already Britain’s largest export market, with exports reaching a record high of 121.6 billion pounds in the last financial year.
“Now that the U.S. is our largest market for both exports and imports, there has never been a better time for us to make the most of this golden opportunity and deliver a free trade agreement with the US,” Truss said in a statement.
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Between two nationalists (Trump/Johnson) idiotic pursuits, the whole world could be in for trouble…
https://www.google.com/amp/s/amp.ft.com/content/6cd70552-ad2b-11e9-8030-530adfa879c2
How about you get real! No one here is just blaming the Democratic Party for selling out the American worker! This statement by you only reveals more of your ignorance of not being educated on the principals of economics! You can try and try and post all the fake negative news stories all you want, the reality is the US economy and numbers don’t lie and you end being a clown for denying that fact!