Yes, he's doing it because he wants to get re-elected and not every American truly understands how dangerous to our way of life China really is. So Trump is walking a tightrope here. I think he knows that tariffs are a blunt weapon, but he's a bit constrained due to his leading a country in the middle of cultural civil war. So it's hard to have a whole of country approach, when half the country wants to see you fail, even if it is bad for the country. He is partly culpable for creating the rage and hatred of him on the left, because his rhetoric can be divisive, but the left is using the same kind of divisive and rage filled language themselves. It's a problem for those of us who want to see economic stability and growth. Agreed on his inability to establish a global coalition. I think he's of the same mind as Bush Jr, which is the US will go it alone. This is a fast approach, but not always the best approach to squeeze a country like China. We're in trouble in this country. I hope we get back to moderation sometime in the future, but not sure we'll get there.
On a brighter note, bonds are now going up when stocks are down and going up when stocks are up! That tells me hot money is moving to the US for safety. I still think we're going to zero bound. Gold's interesting all right too. It's had a good run up and may consolidate, like you say. I too am worried about the big down phase impacting bonds too. I'm itching to unload, but not sure when. When do bonds break? When does the safe haven become a bubble? It looks like a bubble now, but it looks like all liquid capital is moving into Treasuries. So I just don't know.
Here's my guess, though. Don't unload until you see the whites of their eyes, meaning after the Fed announces the return of QE, which should see a melt up in bonds from that announcement...that will be the time to start selling into strength, because we'll be in the last inning of bonds price increases and in the first innings of massive devaluation of the currency and potentially a good amount of inflation. So then we'd want to rotate back into gold and stocks, because by then, the QE will have been a response to a cratering stock market, so stocks should be much cheaper and a good buy. Those are my thoughts! |
