TRADE WAR – OIL – MARKETS- WEEKEND REPORTS
TRADE WARS. First Steel is a minor aspect of US Trade and involves around 80,000 jobs. It is not a MAJOR deal. However the spirit of the message is.
The markets rally around princples. But really Trade Deficists means:
THE USA BUYS FAR FAR MORE THAN IT SELLS FROM THE WORLD
The TRADE WAR in oil has meant the USA has moved from a nothing produer – sitting on the largest lake of oil resources on earth – and buying and making nations from the Gulf to Russia with our USA buying power – the largest BUYING POWER on earth.
So we are not talking about trade alone. We are talking about price.
As nations subsidize price and keep price below cost – far from free market fair trade – the USA is at the end of its own rope of subsidizing such price imbalances.
Which economically are not sustainable over time and lead to utter collapse of entire global financial foundational systems.
Trade War means – retaliation keeps USA goods from being sold over sea’s. This escalation causes the USA to stop buying from other nations and to simply take the largest mineral basket on earth – our own – and begin as we always can and soon will – to develop our own supply chains and never again buy from those not playing fair with the USA.
The nations taking a poke at the USA – the totally unfair immoral unethical trading partners – will – and count on it – lose their largest market and have zero replacement. Let me say that again – the ASIA markets the South American Markets the EU markets – can not survive economically if they lose the USA.
The USA who may stop buying mindless crap from these countries, can simply buy MADE IN AMERICA instread. Yes things will be a little higher priced but then our own self sustaining – replacement products – after which the collapse of nations will occur as their economics evaporate.
This is what Donald Trump stated the USA gains from trade wars – by simply winning them. Never has the USA required a dependance on say EU or Asia anything. Keep this in mind – as economics:
For every dollar a nation outside the USA spends to buy something made in the USA – the USA spends 100 dollars to buy their goods and services.
Now consider in economics past what you read in the paper as spin politics and frankly lies versus spins ( like in oil which we will get to ) the truth is – THE USA is the dog and the world is the tail of that dog. If you doubt that – following the TRUMP TRAIN and watch it carry out – as the battle to stop the WORLD WAR II subsidy to rebuild nations – is coming to a close and fair trade with the victor America – is about to begin.
Russia for example is a petro nation. This year America will ( note that Russia joined OPEC in 2014 and sought to move oil price by phony manipulation versus free market supply – using an oil CARTEL obviously no longer a monoplogy any longer – to cheat market prices – the FEW AGAINST THE MANY – the wealthy against the poor – and failed. During this time America has moved from exporting NO OIL AT ALL to in a few years exporting at 2.2 million barrels of production a day and taking market share away from Russia. Customers who used to buy from Saudi and Russia will never do so again. They are getting lower cost oil from America. This year America will become the LARGEST OIL PRODUCER IN THE WORLD passing Russia’s 10 million barrels a year with over 11 million Barrels for the USA a year – perhaps a lot more as USA production is soaring and everyone says they can’t see a peak yet into 2020 – and beyond.
So America has gone from nothing as the AXIS OF PURE EVIL with Saudi leading it – manipulated phony prices to $ 120.00 a barrel.
We reported in January stocks in the USA would rise – and prices would fall in February and this Spring. The entire market reported oil had rebalanced following the Saudi lies and pure SPIN – progranda to bid oil speculators to buy. This week those speculators again who follow OPEC lost so much money -as Oil has dropped from over 70 dollars a barrel to a low today of 60.18 dollars on Friday – or ten dollars down in weeks -just like we told YOU. If you trade oil and you read this blog a few years you have seen 100% accuracy no misses and OPEC complete lies 100% misses and total loss for you who bet on the loser – the crooks. They are criminal minapulators of markets and the world free market is impossible to manipulate forever. Ask Debeers.
Today the USA took the least important item, but one of the most manipualted by nations – and noted in all trade – the promise that old World War Subsidies are over – is about PRICE. Tarffif’s will be only applied when nations fail to price their products at free market rates versus government subsidized prices. If the USA subsidized Boeing like nations in the EU pour billions of subsidies into AIRBUS then BOEING would have 100% of the worlds airline business. Either way the USA wins.
So nations enjoying the 100 to one USA buying of their trade versus our 99% less trade have to consider how to protect their economic surival. In a real escalation of a trade war the USA pulls back trillions of buying from the EU and from China – and what happens is:
- The USA makes its own missing EVERYTHING – no real problem and so fast nations heads will spin – look at oil.
- The economics of other nations losing their core economic foundation ( America ) wipes out nations like Germany overnight let alone China.
- The USA catches a cold and the world dies of fatal economic pnusmonia.
- The USA prospers over night with jobs and internal economics that soar.
- New fair trade partners pick up the trade the other dying nations once had. True that wars break out over this – but Putin showing off his new weapons knows well the USA does already have these and weapons he can’t imagine – further – any attack on the USA creates a burnt cinder in ONE POWER HOUR of the nation foolish enough to commit sucicide. NOTHING PUTS FEAR INTO THE USA and especially a corrupt – recesion driven – sanction limited economics of a rogue RUSSIA NATION that is a single economic – oil and that is utterly dying at 10 dollars down bubble despite their OPEC manipulator since 2014 global effort – they bet – they lost – and they have been losers since the Soviet Union fell completely apart. NO ONE one’s to be part of Russia – everyone wants to be closer to the USA – economically including Putin who in real terms is on his knees begging to get one more chance.
Economically the USA is Mount Everest. China is not a mountain China is a Foothill. The EU and the UK are mountains.
Japan is a mountain but in the middle of earth quakes where in 20 full years they have not beat back deflation – price collapse – and with trillions of printed money can not return INFLATION they can not due it. This is important for the USA post crash.
Ten years later real wages are not rising as desired and the FED inflation and interest rate raising is misplaced. Outside oil specualtion bidding January OIL PRICE ( the cost of everything ) up by 10 dollars a barrel only to fall ten dollars a barrel – there is NO INFLATION. So the FED is tightening money into a ( SEE JAPAN ) unbelievalbly fragile global recovery – so fragile any wind can derail that recovery. A slow – very gradual 20 year normalization is ideal in this new economic modeling. Proceeding as if we are in old model economics may be fatal to world economics and create a LIQUIDITY CRISES that ends the WORLD WAR II SYSTEM ( all banks and financial institutions and trade bankrupt and fail ).
The truth is your deposists in banks – are not being held by your bank. Today banks are owned and merged into investment banks who counter party trade with all bank deposits to PUT THE MONEY TO WORK at LEVERAGE. In the old days this money went to work at around 11 to one margin. The instant you put a dollar into a bank that bank loaned our or invested that dollar at a borrowed managed manner taking risk bets – at 11 to 1 – but if you stopped it all today and audited really audited – you would discover the average dollar is “working” in very high risk ( far higher than the depression days ) within 50 to 1 leverage – primarly in off shore structured assets that side bet on WHICH WAY any asset class may be going up and down to protect risk and make profits as long as prices move up and down. This is casino betting. The pricise repeat of the FACTOR exactly that caused the GREAT DEPRESSION. In 1929 the side betting market was many times larger than the real market and influenced the price of the real markets.
This reality has again returned in the years following Dec 1999 unanmious vote of Congress to deflate all DEPRESSION LAWS that created a fire wall from such side bets ( which were a crime ) to the investment bankng business and banking industry. Today they blur and merge like they did in the GREAT DEPRESSION.
The unseen leverage or borrowing or debt is the system weapon of mass destruction that unless regulated and soon will destroy the entire world system – not the TRADE WAR PHANTOM issue. This all moves to political cards and press and media to influence voters and voting to manage power broker between super money pools who control political parties and media.
The behind the economic curtain is the wizard of oz as seen by the puppy dog toto – is not a wizard at all and there is no magic – no solid financial system. Why? The digital trading of trillions is now in the cloud and the laws are local and the system is now operating outside any rule of law.
The markets went down from the 1000 loss in February by another 1000 in Feb 28th and March to date – down down down as Alice said in the Rabbit Hole. Will it never end …said Alice.
What is really going out there is an Election in Russia a mid year Election in the USA – politics charing the leader in Isreal with crimes – the President in the USA being investigated politically for crimes – May in the UK dueling out the politics versus the economics ( the UK buys so much more from the EU than the EU buys from UK as the tail not the dog ) – the politics not the economics drive everything.
The danager is the banks have no money and are actually if they were required ( which they are not by law ) to report at REAL MARKET RATES ( they are exempt ) their true bad loan loss portfolio’s – they are bankrupt and the banks globally would all and fail. The systems is giving the system TIME to restore profits over loan loss which will take decades – if the bad loans do not rise as they are by the trillions in bad car loans defaulting – bad home loans rising again world wide – bad business loans – the entire mall and retail sector going bankrupt by digital disruption ( my wife buys and has it all home delivered she never goes to shop for groceries any longer for example ) or drone delivery and human taxis – why buy a car ? Its all coming at speeds you can’t imaginge and banks either and their bad loans are soaring greater than the rebalancing of profits. ONE LIQUIDITY ( EVENT ) say from trade wars – will topple the SYSTEM at core. In a single digital hour. All new risk.
So RISK is that Politics drive economics rather than cooperation re-global – regulation of the digital GAP – where economics drive politics the one and only RISK reducer.
So we see it as interesting an unpredictable.
In 2017 we had eight days – of market moves of 1% of more – in 2018 we had more than 8 days of 2% moves already.
Finally China is the least of Steel Over supply America imports 80% of subsidized phony steel priced low cost steel hurting our industry – from a basket of other nations like South America and Canada. China is the least of it.
Trade war – where we go next no one can predict – but no surprise Trump promised his voters – and he won – this was for sure policy. Now it is – if one thing – Trump says what he means -that is the one item we can bank on out of all this.
BERNY DOHRMANN – Weekend Report on March 2 2018
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