Giddy Up – IMF Outlines “Global”
Danger From Trade War With President Trump…by
Sundance, 7/17/19,
An article from Reuters discussing the position of the
International Monetary Fund (IMF) is interesting. Essentially the
IMF is warning that “global economies” will contract by $455 billion next year
due to the ongoing trade conflict between the U.S., China, the EU and to a
lesser extent, Japan. Yes Alice, there are hundreds of billions at
stake.
There’s really no reason to doubt the
amount estimated, though I think it’s on the short side, but the yearly value
seems in line. I have no doubt President Trump will cost the “Global
Economy” $455 billion…. because that money will be transferring back to the
America First economy. That’s what happens as MAGAnomics reverses the IMF trade
(wealth distribution) model.
The IMF is correct in
part (the effect), incorrect in part (the cause), and mostly
hypocritical. The Euro-minded IMF rails against the high value of the
U.S. dollar, but simultaneously ignores the motives behind the intentional
devaluation of currencies that are pegged against the dollar.
WASHINGTON
(Reuters) – The International Monetary Fund said on Wednesday the U.S.
dollar was overvalued by 6% to 12%, based on near-term economic fundamentals,
while the euro, the Japanese yen and China’s yuan were seen as broadly in line
with fundamentals.
The IMF has
been at odds with U.S. President Donald Trump over his use of tariffs to
resolve trade imbalances, but its assessment that the dollar is overvalued is
likely to give Trump more fodder for his frequent complaints that dollar
strength is hampering U.S. exports.
Trump has
railed against European and Chinese policies that lead to what he calls a
devaluation of the euro and other currencies against the dollar.
The Fund – which
has warned that the U.S.-China trade war could cost the global economy about
$455 billion next year – said recent trade policy actions were weighing on
global trade flows, eroding confidence, and disrupting investment. But they had
done nothing to reverse external imbalances thus far. (read more)
China and the EU have
devalued their currency in an effort to block the impacts from President Trump
and the ‘America First’ trade policy. Because those currencies are pegged
against the dollar, the resulting effect is a rising dollar value. In
essence, the globalist IMF is now blaming President Trump for having a strong
economy that forces international competition to devalue their currency.
That’s the stupid
hypocrisy of global banking outlooks. They make a decision to devalue
their currency, which causes the dollar value to rise, and then turn around and
blame the U.S. dollar for being overvalued.
The root cause of the
devaluation is unaddressed in their argument. The EU and China are trying
to retain their global manufacturing position and offset the impact of
President Trump’s tariffs by lowering the end value of their exports.
In the bigger picture
this is why President Trump is the most transformative economic President in
the last 75 years. The post-WWII Marshall Plan was set up to allow
Europe and Asia to place tariffs on exported American industrial
products. Those tariffs were used by the EU and Japan to rebuild their
infrastructure after a devastating war. However, there was never a built
in mechanism to end the tariffs…. until President Trump came along and said:
“it’s over”!
After about 20 years
(+/-), say 1970 to be fair, the EU and Japan received enough money to
rebuild. But instead of ending the one-way payment system, Asia and the
EU sought to keep going and build their economies larger than the U.S.
Additionally, the U.S. was carrying the cost of protecting the EU (via NATO)
and Japan with our military. The EU and Japan didn’t need to spend a
dime on defense because the U.S. essentially took over that role.
But that military role, just like the tariffs, never ended. Again, until
Trump.
The
U.S. economy was the host for around 50 years of parasitic wealth exfiltration,
or as most would say “distribution”. [Note I use the term *exfiltration*
because it better highlights that American citizens paid higher prices for
stuff, and paid higher taxes within the overall economic scheme, than was
needed.]
President
Trump is the first and only president who said: “enough”, and prior politicians
who didn’t stop the process were “stupid” etc. etc. Obviously, he is 100%
correct.
For
the past 30 years the U.S. was a sucker to keep letting the process remain in
place while we lost our manufacturing base to overseas incentives. The
investment process from Wall Street (removal of Glass-Stegal) only made the
process much more severe and faster. Wall Street was now investing in
companies whose best bet (higher profit return) was to pour money overseas.
This process created the “Rust Belt”, and damn near destroyed the aggregate
manufacturing industry.
Fast
forward to 2017 through today, and President Trump is now engaged in a massive
and multidimensional effort to re-balance the entire global wealth dynamic.
By putting tariffs on foreign imports he has counterbalanced the never-ending
Marshal Plan trade program and demanded renegotiation(s). Trump’s goal is
reciprocity; however, the EU and Asia, specifically China, don’t want to give
up a decades-long multi-generational advantage. This is part of the
fight.
One
could argue that China’s rise happened inside this period, and as a consequence
they have no comprehension of an economic history without the institutional
advantages. They’ve never competed with the U.S. under any terms of
equivalence or fairness; they’ve only ever known the advantages. Combine
that with the Chinese communist mindset and you get the extreme severity of
their position.
So
yeah, there’s going to be pain – for them; massive economic pain – as the
process of reestablishing a fair trading system is rebuilt. This dynamic
is the essence of reciprocity that benefits Main Street USA.
Unfortunately, putting ‘America First’ is now also against the interests of the
multinationals on Wall Street; so President Trump has to fight adverse economic
opponents on multiple fronts and their purchased mercenary army we
know as DC politicians.
No-one,
ever, could take on all these interests. Think about it… The EU,
Asia, World Bank, International Monetary Fund, China, Russia, U.S. Chamber of
Commerce, Iran, U.S. Congress, Democrats, U.S. Senate, Wall Street, the Big
Club, Lobbyists, Hollywood, Corporate Media (foreign and domestic), and the
ankle-biters in Never Trump…. All of these financial interests are aligned
against Main Street USA and against President Trump.
Name
one individual who could take them on simultaneously and still be winning,
bigly. They say he’s one man. They say they have him outnumbered.
Yet somehow, as unreal as it seems, he’s the one who appears to have them
surrounded.
Incredible.
Lord knows we can’t spare this man. He fights!
Norb Leahy, Dunwoody
GA Tea Party Leader
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