WHAT KEEPS ME UP THIS WEEKEND FEB 9th REPORT ?
The economy and profit picture with the strong strong USA consumer buying now trending makes me confident of a solid 2019 over all. Still the headlines on Trade Wars are likley to get LOTS WORSE before they get any better. For example to wean America off Chinese products ( MADE IN CHINA ) – and with so many critical issues unlikely to work out by March 1st – the truth – it is high risk we move to 25% tariffs before President Trump and President for life XI meet in the future at unknown date lines.
Behind the Trade Curtain billions are shifting. Chinese are stopping the buying of anything outside China. This is dropping American balancing trade with China from Auto’s to IPHONE by billions of dollars. Meanwhile Americans are tit for tat stopping buying at consumer ground floor levels I warned and warned about last year – as an unintended consequence of dragging out a deal. Consumers vote with their wallet and they vote for whats best for their own economy. America trend sinks China by far as we buy 5 to 1 what China buys from us ( hence the problem ). SO as accumulation of EU and American consumers back lashing into NOT BUYING MADE IN CHINA the economics and optics sink China into a hard crash that can trigger and fast a debt defaulting cascade in the worlds larges Debtor nation to GNP. Ten years of driving economics in China in unsustainable 300% borrowing both this blog and the IMF have been screaming about as a danger to global economic STABILITY and world peace. A more graduated approach with larger time lines I believe is a more sound policy.
Further the EU will have very equal measures on trade coming up. Congress was favorable for Trumps RECIPROCITY TRADE BY NEW LAWS that permit the administration to match tariff loads from any nation from zero between us to match what they punish our industries for – we equally level their own playing field. The notion we tax incoming goods at almost zero and they tax our goods at 50% to 100% is unfair and not sustainable in world trade economic balances. It is fatal economics.
So new box top rules to secure stability to the global system itself are needed. The pressures in nation to protect entrenched business is a cost best paid now as paying that cost later is going to sink the host nation economically. For sure every time.
When you add in the NEW CONSUMER BACKLASH NCB – in buying patterns which may take decades to repair – no matter what trade deals occur if consumers boycott MADE IN CHINA and MADE IN EU and MADE IN AMERICA the entire world loses. Fair Trade is required to sustain the core system. If planners see the CORE SYSTEM STABILITY as the only outcome deals could proceed with more trust and sense.
No nation in the modern AI digital world can rise by stealing other nations IP. Digital theft is no longer an option. The punishment for such thefts will be in the future act of war level with cost that will be switch and massive. Economically digital theft is a thing of a prior age. Acting as a state sponsor digital thief defines the problem. The problem at core is INTEGRITY. Rising integrity in partnership dealing is the stability requirement. We can all make good system stabilizing deals to become the example for NO NATION LEFT BEHIND.
No nation can sustain its prosperity moving forward:
- Fair and revised global trade deals with other nations.
- IP rule of law absolute protection as integrity between partners trading.
- Fair revised tax outcomes benefiting all collectively
- Removal of money laundering and black market flows of criminal cash
- Unwanted consolidations of wealth and power by economic frame work to assure circulations drive forward growth for all.
Moving forward headlines influencing AI market prices downward include the predictions for: ( without a surprise deal ):
- Tariff rises to China that are massive more than 150% cost rise for China trade goods
- War level tit for tat with all FORWARD IP theft ( we are ready and at war footing digitally at NSA and DOD )
- EU headlines where Germany France Italy and Spain are all moving toward recession – Italy is already there – and downward spirals from TRADE WARS not resolved with our own friends and allies abuses economics, will elevate as negotiations drag on in time – global GNP going DOWN – world wide – with massive potential for NCB from consumer populations in China japan ASIA the EU
- America has the best economy to prosper in such a crazy future world
- AI developing to ARTIFICIAL SELF AWARE GENERAL INTELLIGENCE AGI will redefine everything a first in human existence a new BEING more intelligent as potential than Humans by distances we can’t measure ourselves. As controls are not built into AI as to how AGI will see and treat HUMANITY – a cause Musk and others are screaming about for five years – but no one is creating a global treaty for AI development rules and regulations – there are NONE and that is not frightening given the time linie is sixty months or so – it is terrifying. As human’s can not put that unpredictable geni back in any box – preparing the birh of AI is insane without those box top rules. Humans are presently insane.
The largest adaptive SUPER CHANE pressures are now rising into the evolving higher forms of AI in the ultimate arms raise consuming the bulk of trillions in research. From Tony Robbins to private lab untold wealth is flowing into the new more advanced AI breakthroughs today. No one is licensed. There are zero box top rules. As it cost so much more to make AI human – moral – ethical – integrity double lines – none of which are being framed in as AI is being developed for its own awareness and self learning without frame works we humans working together would agree to install. Uniformly. Competing with every lab on its own for the prize of being first – we risk a human extinction event that makes terminator a movie and real life far more immediate.
My own warnings on this item have raised some press up but it is not enough. So moving forward I’m glad I’m in America coming up and investment globally it seems to me is best parked INSIDE AMERICA long and short term. The political roulette wheel is turning economically on AI and trade wars. The ball is dancing over the final numbers. No one can predict if when the wheel stops we all win or we all lose. The risk doing nothing with unsustainable trade imbalances is economic super crash and world war. The risk moving to an agreement is global prosperity and peace. The risk of unknowns too long remains system super crash and world war. The risk is so large the risk must be avoided at all cost.
A longer time frame to get positive final outcomes is desired and required. Political planners putting forth artificial red line time lines risk it all.
Now frankly, looking a global balances and economics, these thoughts this weekend keep me up at night as we have no way to discern outcomes in fact. The risk is enormous to markets. One set back here and there along the way and there will be many and the markets as I blogged all last year will move to behave like a drunken sailor in volatility.
System stability is the only mission.
Berny Dohrmann – GIVING YOU NEW GLASSES TO READ EVERYTHING WITH IN 2019 THIS WEEKEND