Senator Schumer is an interesting choice to carry the tarriff message. He's not the most junior Senator, or the lightest weight - but he is not a heavy important figure (he thinks he is though) and he has enough of a reputation for saying silly things. That can make him easy to refute if/when necessary.
Now somebody as Heavy as former Senator Bob Dole or Sam Nunn would be very different, those are heavies. So would John McCain (military's favorite). That would be a serious warning.
Senator Diane Feinstein is a special case, possibly the most pro-China Senator, being from San Francisco and also her husband's (Richard Blum) extensive dealings with China.
So I think this was carefully calibrated message, not a complete fake performance for J6P, but something in between, with its' importance discussed behind closed doors, where you and I won't find out until long after.
*******
Using powerful "post hoc" logic, this tariff thing comes up about 2-3 weeks after the Euro gets in big trouble, not just because of the votes, but becasue of the reactions, such as Germany's secret discussions of leaving and that amazing Italian proposal to bring back the lira and run dual currencies for a while. Italy needs much tighter drug laws.
So this could be 1) the US Dollar block negotiating a better position now that the Euro is less viable as a long term store of value.
Or 2) this could be part of some pre-positioning of a RMB-USD axis to take over and/or intervene if the Euro blows up badly.
I am now starting to lean toward 2), since I can't see how the USD gets a better position.
Maybe money goes from Euros to RMBs then gets loaned back to Europe (China and Japan buy their bonds) to help lower European interest rates - see that Sweden just cut their rates.
This avoids money pushing up the value of the USD - which is happning now - which could cause a repeat of the 1998 Asia currency crisis - too many USD loans in Asia, and as the USD went higher, it becmes harder to pay those down...
The standard script has the value of the USD dropping vs. the RMB and JPN. That's not happening - USD is stronger. |
