The Trump Economy

[/dev/null]

1 hour ago, TPS said:

Haha! Thanks for bringing Japan into this...who do you think holds the majority of their government's debt?

 

 

 

 

[Deranged Rhino]

More details: 

 

[TPS]

1 hour ago, /dev/null said:

 

 

 

 

If you consider the Bank of Japan an alien....

Japan's debt/gdp ratio is 240%, and the BoJ holds about half of that debt.  To compare, if the FED held that much debt relative to the size of the US economy it would hold $26 trillion in treasuries....

[B-Man]

 

 

 

 

 

 

.

[GG]

15 hours ago, TPS said:

Apparently you just aren't reading my posts very carefully, because I said it (all countries are NOT the same) long ago...

The reserve accounting EXPLAINS WHY QE DID NOT LEAD TO INFLATION.

 

A deficit occurs when spending exceeds tax revenue.  Here's where we differ: I believe It's the size of the deficit that matters (and of course the state of the economy when they occur); you believe it's more important whether they are caused by spending increases or tax cuts.  You believe that larger deficits caused by tax cuts lead to stronger growth than deficits caused by spending increases, but this supply side religion has never worked in practice--the evidence does not support it.  

 

Haha! Thanks for bringing Japan into this...who do you think holds the majority of their government's debt?

 

It's astounding that you can't see the contradiction in your view that while you admit that not all countries are the same, you still cling to the thought that an accounting gimmick is the reason that investors slough off the Fed creating $2.7 trillion of assets out of thin air. 

 

You seem to think that the Fed is the puppeteer of the global bond, stock and currency markets, when in reality the relationship is much more symbiotic, and markets behave as expected as long as there are no surprises.  That's why central banks are useless in preventing financial calamities.  The banks are good in helping clean up the mess, but can't stand in the way of runaway trains that are asset bubbles.

 

 

[Tiberius]

Major American farm groups sounded an alarm Monday after China halted U.S. agriculture imports, signaling a key Republican political constituency is losing patience with President Donald Trump’s escalating trade war.

 

 

Zippy Duvall, president of the the American Farm Bureau Federation, the nation’s largest and most influential general farm organization, called China’s import cut-off “a body blow to thousands of farmers and ranchers who are already struggling to get by.”

 

 

Roger Johnson, president of the National Farmers Union, the nation’s second-largest general farm group, said Trump’s “strategy of constant escalation and antagonism” has “just made things worse.” America’s family farmers and ranchers “can’t withstand this kind of pressure much longer.”

 

 

China halted purchases of U.S. farm imports over the weekend after Trump threatened a wider expansion of tariffs on Chinese goods amid stalled trade talks. Along with the ripple effects in the agricultural industry, the worsening trade war stoked fears in financial markets as U.S. stocks plunged the most in the year.

 

 

Duvall said the tariff war is worsening the plight of a farm sector already reeling from low commodity prices and bad weather. U.S farm exports to China had already fallen $1.3 billion during the first half of the year, he said.

https://www.bloomberg.com/news/articles/2019-08-05/farm-groups-sound-alarm-over-trump-s-china-trade-war-escalation?srnd=politics-vp

[Tiberius]

This should scare everyone! 

 

Trump is increasingly relying on himself — not his aides — in trade war with China

The Treasury Department’s formal announcement that it had labeled China a “currency manipulator” came six hours after President Trump did it himself, on social media.

• By Damian Paletta
• 2 hours ago

[TPS]

44 minutes ago, GG said:

 

It's astounding that you can't see the contradiction in your view that while you admit that not all countries are the same, you still cling to the thought that an accounting gimmick is the reason that investors slough off the Fed creating $2.7 trillion of assets out of thin air. 

 

You seem to think that the Fed is the puppeteer of the global bond, stock and currency markets, when in reality the relationship is much more symbiotic, and markets behave as expected as long as there are no surprises.  That's why central banks are useless in preventing financial calamities.  The banks are good in helping clean up the mess, but can't stand in the way of runaway trains that are asset bubbles.

 

 

What's astounding is you don't understand what causes inflation. 

About 75% of what the Fed  bought was from banks and stayed on bank balance sheets as an interest earning asset--deposits held with a Fed bank. Bank managers decide this, not investors.

 

So let's look at the amount bought from investors. The initial impact is a decrease in treasuries or mbs in their portfolios and an increase in demand deposits. When QE2 was announced in late 2010, many investors believed it would cause inflation and moved funds into gold and commodities (I made the argument here that a spike in oil prices was driven by investors piling into oil futures). This is also when many of the conservatives on PPP said it would cause hyperinflation. I said it would not. bill Gross famously stated he was dumping his fixed rate treasuries for the same reason.  These action did have an initial impact on commodity prices (including gold) and the 10-year treasury yield. However, 6 months later the bubble burst, as oil future prices dropped the maximum allowable that May, and treasury yields fell back below 2%. 

QE did not lead to a significant increase in inflation because 1) most of the funds sat as dead assets on bank balance sheets; 2) investor decisions do not cause a rise in the general level of prices.   Inflation is influenced by Generalized excess demand for products, factors that influence production costs, and the degree of market competition. 

 

Btw, since you brought up, care to comment on how Japan can get away with a public debt to GDP ratio of 240% with the BoJ holding half of that AND why there's no inflation?

Edited August 6, 2019 by TPS

[SoCal Deek]

In hopes of veering off the standard they’re  right and they’re wrong path I’d love to hear people’s opinion on the following:

The country is currently at one of those interesting academic/economic test case points. We are at full employment. We have no inflation. Interest rates are stable if not low on average. And yet...we’re still running a deficit?  We can’t have any more people working than right now, and we can’t have any less people drawing unemployment than right now. If this doesn’t PROVE that the country is way too dependent on a certain small sect to keep funding the government I don’t know what does?  And if these conditions don’t  also PROVE that we have a spending problem, I don’t know what does. In these times of plenty we need more people paying into the system in order to stash away corn into the storehouse rather than less people paying more and more. My two cents.

[RochesterRob]

33 minutes ago, Tiberius said:

Major American farm groups sounded an alarm Monday after China halted U.S. agriculture imports, signaling a key Republican political constituency is losing patience with President Donald Trump’s escalating trade war.

 

 

Zippy Duvall, president of the the American Farm Bureau Federation, the nation’s largest and most influential general farm organization, called China’s import cut-off “a body blow to thousands of farmers and ranchers who are already struggling to get by.”

 

 

Roger Johnson, president of the National Farmers Union, the nation’s second-largest general farm group, said Trump’s “strategy of constant escalation and antagonism” has “just made things worse.” America’s family farmers and ranchers “can’t withstand this kind of pressure much longer.”

 

 

China halted purchases of U.S. farm imports over the weekend after Trump threatened a wider expansion of tariffs on Chinese goods amid stalled trade talks. Along with the ripple effects in the agricultural industry, the worsening trade war stoked fears in financial markets as U.S. stocks plunged the most in the year.

 

 

Duvall said the tariff war is worsening the plight of a farm sector already reeling from low commodity prices and bad weather. U.S farm exports to China had already fallen $1.3 billion during the first half of the year, he said.

https://www.bloomberg.com/news/articles/2019-08-05/farm-groups-sound-alarm-over-trump-s-china-trade-war-escalation?srnd=politics-vp

  Given its history in recent times China should never be considered a reliable trade partner.  While I empathize with farmers they have a habit of being their own worst enemies.  They use boom periods in their industry to expand which has the side effect of being inflationary such as purchasing land.  The price of land has been been uncoupled from historic measures to determine value such as productivity relative to a short term return or payment schedule.  Return used to be figured on the net profit of growing a crop or raising livestock on a per acre basis with repayment along with RIO considered acceptable if accomplished within the career of one farm operator.  Channeled foreign investment through US businessmen along incremental purchasing by farmers have elevated farmland prices where repayment would have to happen over two or more generations.  Long term this will destabilize the industry and run the risk of of inadequate production possibly leading to political instability.  While creating short term pain Trump's measures might have the benefit of cooling inflation of land prices.  The most recent bout having started several years back when the Ukrainian wheat crop suffered extreme drought.

[plenzmd1]

10 minutes ago, RochesterRob said:

  Given its history in recent times China should never be considered a reliable trade partner.  

umm, second biggest economy in the world and 6% growth..better damn well figure out a way to make them a trade partner

[TPS]

35 minutes ago, SoCal Deek said:

In hopes of veering off the standard they’re  right and they’re wrong path I’d love to hear people’s opinion on the following:

The country is currently at one of those interesting academic/economic test case points. We are at full employment. We have no inflation. Interest rates are stable if not low on average. And yet...we’re still running a deficit?  We can’t have any more people working than right now, and we can’t have any less people drawing unemployment than right now. If this doesn’t PROVE that the country is way too dependent on a certain small sect to keep funding the government I don’t know what does?  And if these conditions don’t  also PROVE that we have a spending problem, I don’t know what does. In these times of plenty we need more people paying into the system in order to stash away corn into the storehouse rather than less people paying more and more. My two cents.

Go back about 10 pages and start reading the posts related to your 2 cents. 

[SoCal Deek]

5 minutes ago, TPS said:

Go back about 10 pages and start reading the posts related to your 2 cents. 

Oh brother 

Sorry dude...I’m out here busting my hump working to pay my fair share! Maybe you can recap? 

[RochesterRob]

4 minutes ago, plenzmd1 said:

umm, second biggest economy in the world and 6% growth..better damn well figure out a way to make them a trade partner

  Anybody that has been in business any length of time will tell you some individuals are just not worth the time to cultivate because the return is not there and such is the situation with China.  Even before the electronic information age China has had issues in terms of copyright and patent infringement.  China opened the doors to Western development for the sole purpose of pirating technology of companies who set up manufacturing  there.  Trading works best when a high degree of ethics by all partners is employed.  On a small scale China is the problematic customer that sucks profits away from a business.  The kind of customer that works the complaint counter of a small business to get a free appliance, lawn mower, or automobile on a periodic basis to the benefit of themselves and the detriment of the business they deal with.

[keepthefaith]

27 minutes ago, plenzmd1 said:

umm, second biggest economy in the world and 6% growth..better damn well figure out a way to make them a trade partner

 

Agree and there is more at stake than just trade.  A friendly and cooperative relationship with China will provide benefits in other areas as well.  We don't want another cold war and it would be a plus if we can also convince them to clean up their environmental act a bit. 

Edited August 6, 2019 by keepthefaith

[plenzmd1]

1 minute ago, RochesterRob said:

  Anybody that has been in business any length of time will tell you some individuals are just not worth the time to cultivate because the return is not there and such is the situation with China.  Even before the electronic information age China has had issues in terms of copyright and patent infringement.  China opened the doors to Western development for the sole purpose of pirating technology of companies who set up manufacturing  there.  Trading works best when a high degree of ethics by all partners is employed.  On a small scale China is the problematic customer that sucks profits away from a business.  The kind of customer that works the complaint counter of a small business to get a free appliance, lawn mower, or automobile on a periodic basis to the benefit of themselves and the detriment of the business they deal with.

well, tell that to the 1000s of businesses that have growth in APAC, specifically China, as a major strategic driver of revenue growth in the next 5 years.1 BILLION consumers, in a world economy that is driven by consumer spending, is way to0 big to just say "screw it". Trump is learning he does not hold all the cards as he did most times in his private business and his simple tactic of saying " i will walk away" unless i get my way does not work when dealing with authortarian regimes that do not need to be elected. He is finding that out with Xi ,Kim and MBS...

[Tiberius]

10 minutes ago, SoCal Deek said:

Oh brother 

Sorry dude...I’m out here busting my hump working to pay my fair share! Maybe you can recap? 

Maybe you can educate yourself, no excuses. 

[SoCal Deek]

Just now, Tiberius said:

Maybe you can educate yourself, no excuses. 

Every one of your posts proves my point. I’m already sufficiently educated.

[Tiberius]

33 minutes ago, RochesterRob said:

  Given its history in recent times China should never be considered a reliable trade partner.  While I empathize with farmers they have a habit of being their own worst enemies.  They use boom periods in their industry to expand which has the side effect of being inflationary such as purchasing land.  The price of land has been been uncoupled from historic measures to determine value such as productivity relative to a short term return or payment schedule.  Return used to be figured on the net profit of growing a crop or raising livestock on a per acre basis with repayment along with RIO considered acceptable if accomplished within the career of one farm operator.  Channeled foreign investment through US businessmen along incremental purchasing by farmers have elevated farmland prices where repayment would have to happen over two or more generations.  Long term this will destabilize the industry and run the risk of of inadequate production possibly leading to political instability.  While creating short term pain Trump's measures might have the benefit of cooling inflation of land prices.  The most recent bout having started several years back when the Ukrainian wheat crop suffered extreme drought.

Woo! You are admitting Trumps policies will devalue farmers land?!? Ok! Cooling inflation means farmers get f***ked 

Just now, SoCal Deek said:

Every one of your posts proves my point. I’m already sufficiently educated.

In your ignorant mind, possibly. I'm not the one asking people to repeat themselves though. 

[keepthefaith]

7 minutes ago, plenzmd1 said:

well, tell that to the 1000s of businesses that have growth in APAC, specifically China, as a major strategic driver of revenue growth in the next 5 years.1 BILLION consumers, in a world economy that is driven by consumer spending, is way to0 big to just say "screw it". Trump is learning he does not hold all the cards as he did most times in his private business and his simple tactic of saying " i will walk away" unless i get my way does not work when dealing with authortarian regimes that do not need to be elected. He is finding that out with Xi ,Kim and MBS...

 

Yes but I have to give Trump high marks for making the effort to solve some things.  Other Presidents just let ***** fester and kicked the can down the road.  Trump is at least taking on some issues.