The Truth About Trade

By Alasdair Macleod – Re-Blogged From

The one subject, which became a headline issue last year, and even divides experts is trade. It will become increasingly important in 2018 as the US develops her trade policy, particularly with respect to China, and as the UK negotiates her Brexit terms with the EU.

Ignorance dominates this subject. Surely, people say, industry should be protected from unfair trade practices, such as goods manufactured in foreign sweat-shops, or unfair dumping of commodities, such as steel. If President Trump can protect American business from unfair competition, it would be good for the American economy. Then there’s the business of currency rates. Doesn’t a lower currency help restore the trade balance, by making exports cheap, and imports expensive? And surely, Britain leaving the EU risks trade tariffs being set up against British business. This means sterling must fall against the euro to rebalance trade.

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China Officials View Treasuries Less Attractive

By Bloomberg – Re-Blogged From Newsmax

Officials reviewing China’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter.

China holds the world’s largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them. It isn’t clear whether the recommendations of the officials have been adopted.

Image: China Officials Are Said to View Treasuries Less Attractive

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Soaring Deficits Force Treasury into Foolish Gamble

By Michael Pento – Re-Blogged From

As mentioned last week in Part I, the U.S. National debt is now at a record $20.5 trillion. And the first month of fiscal 2018 showed a deficit increase of nearly 38% over fiscal 2017. The total amount of Non-Financial Debt is up nearly $15 trillion during the 2007-2017 timeframe. In addition, the Federal Reserve Bank of New York reported that household debt totaled $13 trillion in the third quarter ended September 30th, which is a record high and the 13th straight quarterly increase. And, CNBC recently reported that the debt of nonfinancial corporations has grown by $1 trillion in just the last two years and now totals over $8.7 trillion, which is also a record 45% of GDP.

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Fed May “Kill The Business Cycle”

By Mark O’Byrne – Re-Blogged From

Gold Investment “Compelling” As Fed Likely To Create Next Recession

Is the Fed about to kill the business cycle?
– 16 out of 19 rate-hike cycles in past 100 years ended in recession
– Total global debt at all time high – see chart
– Global debt is 327% of world GDP – ticking timebomb…
– Gold has beaten the market (S&P 500) so far this century
– Safe haven demand to increase on debt and equity risk
– Gold looks very cheap compared to overbought markets
– Important to diversify into safe haven gold now

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Government Debt Isn’t Actually Debt (??)

By John Rubino – Re-Blogged From Dollar Collapse

The failure of fiat currency and fractional reserve banking to produce a government-managed utopia is generating very few mea culpas, but lots of rationalizations.

Strangest of all these rationalizations might be the notion that government debt is not really a liability, but an asset. Where personal and business loans are bad if taken to excess, government borrowing is not just good on any scale, but necessary to a healthy economy. Here’s an excerpt from a particularly assertive version of this argument:

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5 Reasons to Fear the Fall

By Michael Pento – Re-Blogged From

This powerful and protracted bull market has made Cassandras look foolish for a long time. Those who went on record predicting that massive central bank manipulation of markets would not engender viable economic growth have been proven correct. However, these same individuals failed to fully anticipate the willingness of momentum-trading algorithms to take asset prices very far above the underlying level of economic growth.

Nevertheless, there are five reasons to believe that this fall will finally bring stock market valuations down to earth, and vindicate those who have displayed caution amidst all the frenzy.

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Senate Pushing Obamacare Bailout

By Bill Hoffmann – Re-Blogged From Newsmax

Sen. Rand Paul, R-Ky., told Newsmax TV on Thursday he remains dead set against the newly tweaked Senate healthcare bill and warned Republicans they will be clobbered with blame when their watered down version of the failing Affordable Care Act similarly begins to collapse.

“I don’t think some miracle happens with this Republican plan,” Paul, a Kentucky Republican, said on “Newsmax Now” with Bill Tucker. “The main thing that happens is now the . . . dysfunctional part of the marketplace is going to be blamed on Republicans.

Important: Newsmax TV is available on DirecTV Ch. 349, U-verse 1220, and FiOS 615. If your cable operator does not have Newsmax TV just call and ask them to put us on — Call toll-free 1-844-500-6397 and we will connect you right away to your cable operator! Continue reading