Trump is oblivious to the fact that the Globalized sweatshop is funding his tax cut via the trade deficit. Why? Because he's a total fucking moron, according to his former Secretary of State...
Straw, meet camel's back:
"China is already slowing after a stronger-than-expected start to 2018, even before any new US tariffs on its exports."
So far, this week has featured escalating trade wars between the U.S. and its largest trading partners, Canada, Mexico, Europe, and tomorrow China. Meanwhile, the dictator-in-chief was praising the virtues of a Third World despot whose country has the GDP of Netflix. I kid you not. Unfortunately, the rest of the world can't afford to fund the AmeriClown...
Straw, meet camel's back:
"China is already slowing after a stronger-than-expected start to 2018, even before any new US tariffs on its exports."
So far, this week has featured escalating trade wars between the U.S. and its largest trading partners, Canada, Mexico, Europe, and tomorrow China. Meanwhile, the dictator-in-chief was praising the virtues of a Third World despot whose country has the GDP of Netflix. I kid you not. Unfortunately, the rest of the world can't afford to fund the AmeriClown...
Yesterday, the Fed threw Emerging Markets under the bus, raising rates this month and signaling an additional two rate hikes in 2018. During his press conference Chairman Powell also indicated that balance sheet rolloff is "going smoothly", contradicting what the head of India's Central Bank said on June 5th...
"Global spillovers did not manifest themselves until October of last year. But they have been playing out vividly since the Fed started shrinking its balance sheet. This is because the Fed has not adjusted to, or even explicitly recognised, the previously unexpected rise in US government debt issuance. It must now do so"
Speaking of debt issuance, this week we learned that second quarter GDP is approaching Trump's 4% goal. The bad news is that we also learned this week that the 2018 deficit will be 4% of GDP. Meaning that Trump's smoke and mirrors economy is 100% smoke and mirrors:
"The budget gap rose 66 percent last month from a year earlier"
But where will all of that *free* money come from if the Fed is tightening? Oh right, the rest of the world, now getting monkey hammered by tariffs, higher interest rates, balance sheet rolloff, and asinine profligacy.
Meanwhile, for those who actually believe that consumption zombies throwing their last borrowed nickels away portends 4% GDP forever, the bond market would beg to differ. Treasury shorts are on the verge of getting final pole axed...
The global economy is in even bigger trouble, as the sugar high from the latest round of Central Bank stimulus wears off:
"China's economy appears to have hit a significant speed hump, with a number of key indicators across the industrial, construction and retail sectors slowing to either multi-year, multi-decade or record lows."
Economists at global investment bank Rabobank said investment growth, "was all shockingly weak by Chinese standards."
Yet, we should bear in mind that all of this fake euphoria has been sponsored by history's largest short squeeze to fund Wall Street's largest IPO pump and dump in four years:
Meaning that this is a one way trip to the sun...
The Bank of Japan meets tonight to complete the trifecta of money printing meetings, and associated short-covering:
"It is just not credible that the U.S. remain an oasis of prosperity"
- Greenspan, 1998 Emerging Markets crisis
Especially when the oasis is paid for by robbing the rest of the world...
