In this report I cover the early market action from London on Thursday, August 2nd, 2018. I look briefly at the precious metals, the stock market, the dollar, the bond market and the oil price.
Today I look into whether the current trade disputes or wars between the U.S. and its major trading partners like China, the E.U. and Canada are actually a preparation for a new world monetary architecture or reset as it is sometimes called.
I argue that for the last half century America has had the exorbitant privilege of being able to finance its imports via money printing as the dollar has been the world reserve currency. Up until now the trade deficits and the current account deficits have not mattered as there has been ample demand for dollars from abroad.
With a a new monetary order or reset in which the dollar is not King any more the U.S. would have to start earning in other currencies and that can only occur if America starts making more thing and exporting them in order to earn foreign currency.
My conclusion is that the reason president Trump is going after America's trading partners for better deals is that he knows a monetary reset is coming and America needs to level the playing field before that occurs.
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Yes i definitely believe so they are doing everything to avoid but its inevitable you have 2 entities working with different agendas because no one wants to accept the blame.
USA needs to get back to exporting things besides jobs. I am worried for my country and hope me being in the minority will make me wrong.
To the question in your title, my Magic 8-Ball says:
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Trump has his flaws but there is one thing that he is very right to focus on and glad he's addressing and that is the trade imbalances. The trade imbalances have been worsening and what worries me and any thinking person is what happens when it becomes immediately obvious that they are no longer sustainable. The consequences will be a major recession and serious social problems in a lot of countries.
Hi great one, your dream.will come true here. Best of luck.