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Strategies & Market Trends : US Inflation and What To Do About It -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (981)	4/1/2019 6:49:46 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1504

Could be you are right. However, there are a ton of indicators that have already rolled over. Some are getting worse. The Fed has managed to keep the stock market at or near all time highs and so it makes everything look rosy. You say the real economy looks good, but not from where I'm standing. The real economy for the 99% looks terrible. For you and me, it look like it always looks, but we're in the 1%. For example, why is global trade freezing, if the global economy is doing so well? --------- Global Trade Takes Sharp Turn With Biggest Drop Since 2009 According to the Netherlands Bureau for Economic Policy Analysis (CPB), world trade plunged to its weakest levels not seen since the financial crisis. The report published last week shows world trade expanded by 2.3% in January after the index tumbled in 4Q18. The recent rebound was broad-based with the strongest seen in emerging markets Asia (+6.2%), which followed a decline of -6.5% in December. The three-month global trade momentum shows a downward trend of -1.8%, indicating economic growth across the world continues to slide into 2Q. Bloomberg said, "that's the biggest drop since May 2009." On a y/y basis, global trade posted its first decline in nearly nine years in the three months. The global 1H19 outlook remains in a cyclical downturn, which could hinder world trade further. The epicenter of the slowdown originates in China, which is partly due to a combination of China's growth supercycle coming to an end, developed world economies slowing, Federal Reserve tightening monetary policy, and the US-China trade war that disrupted supply chains in Asia. This has global consequences: " For example, eurozone manufacturing PMI weakened to 47.6 in March according to Markit, marking the second consecutive month this year that manufacturing activity and export orders declined in the eurozone. The indices for January and February indicate contracting manufacturing activity in most of the east-Asian economies as well," said ING. Transitioning into the 2Q, significant downside dangers are developing. Trade negotiations between Washington and Beijing have been a no deal trade situation at every meeting. With a no deal expected at the upcoming meeting this week, trade talks could go into several more rounds before an agreement is hammered out. If a no deal scenario plays out in 2Q, a further escalation in tariffs or just the lack of removing the duties could spark another growth fear and a repricing event of financial assets, similar to late last year. Another concern is the standoff between President Donald Trump and Europe on auto tariffs. If Washington and Brussels cannot come to a resolution in the next several months, U.S. tariffs on European automobile imports would crush global trade further. Uncertainties around NAFTA countries remain, Canada and Mexico are still unsure if they are exempt from these tariffs.

To: John Vosilla who wrote (981)	4/6/2019 7:11:15 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1504

Interesting what Trump said yesterday morning. You know I'm not a fan of debt, but I can understand why Trump is pressuring the Fed for more QE and lower rates. He wants to keep the economy humming so he can get re-elected. This is going to have some really bad long term consequences. -------- Yields, Dollar Slide As Trump Calls For QE4 Before any Fed officials get the idea that Friday's stronger-than-expected headline jobs number (which, as we pointed out, actually masked signs of pervasive weakness in employment in wage growth) might justify raising interest rates again in the not-too-distant future, President Trump slammed the central bank during comments to a group of reporters in Washington. Instead of sticking with its "pause", Trump said the central bank should instead "drop" interest rates, something that markets have already priced in, adding that the central bank has "really slowed" the American economy. Setting aside the cognitive dissonance between these comments and Trump's repeated claims that the US economy is doing "really, really well" and that companies are preparing to announce that they're "coming back" to the US... TRUMP SAYS FED SHOULD DROP RATES, STOP QUANTITATIVE TIGHTENING Because economy is so strong ...Trump's comments show that he won't let up the pressure on Jerome Powell after reportedly trying to replace him with Kevin Warsh, and declaring Powell one of the worst hires of his administration. "I personally think the Fed should drop rates, I think they really slowed us down, there's no inflation, in terms of quantitative tightening, it should really be quantitative easing...you would see a rocket ship. Despite that, we're doing very well." On the subject of the US-China trade negotiations, Trump said he didn't want to predict that a deal would happen, and defended his decision to tweet a video mocking Joe Biden's history of inappropriately touching women, saying he didn't see Biden as a threat. He also said he wouldn't be attending the White House Correspondents dinner because it's "too negative" and that he would be holding a rally instead. Trump's rate-cut comments were echoed by Larry Kudlow, one of his top economic advisors, who said during an interview Friday morning that the US economy "could do with a rate cut." Trump's comments provoked and immediate response in yields and the dollar. The administration's calls for a rate cut come after the yield curve briefly inverted last month, which economists worry could portend a recession in the indeterminate future. Of course, Trump didn't always feel this way about the virtues of loose monetary policy. "The Fed's reckless policies of low interest and flooding the market with dollars needs to be stopped or we will face record inflation." - Trump Now that the president has officially started the conversation about QE4, how long until mainstream economists follow suit?