Jun 17 2019

The Rise in Agriculture for the Next ECM

Armstrong Economics Blog/Agriculture

Re-Posted Jun 17, 2019 by Martin Armstrong

The Fall Army Worm (FAW; Spodoptera frugiperda) is a crop-eating pest that was first detected in China back in January 2019. It has now spread across China’s southern border and currently impacts about 8,500 hectares (127,000 mu) of grain production in Yunnan, Guangxi, Guangdong, Guizhou, Hunan, and Hainan provinces. Officially, Chinese authorities have employed an emergency action plan to monitor and respond to the pest. FAW has no natural predators in China and its presence may result in lower production and crop quality of corn, rice, wheat, sorghum, sugarcane, cotton, soybean, and peanuts among other cash crops. Experts warn that there is a high probability that the pest will spread across all of China’s grain production area within the next 12 months.

This is obviously a contributing factor to what the computer is projecting for agriculture. Keep in mind that the patterns the computer identifies come from the price movements. We have wheat prices back to 1259. Clearly, the projections it makes are all inclusive of weather and disease, for everything unfolds in a cycle.

Jun 17 2019

Endless Cycle of Corruption

Armstrong Economics Blog/Gov’t Incompetence

Re-Posted Jun 17, 2019 by Martin Armstrong

QUESTION: I read your articles on Capital flows regularly and I appreciate how you interlace different concepts together.
Where is the money?

European rulers essentially drained the Asia/Africa of their resources in the last 400-500 years. With all of it piped into Europe, it should have sustained the population for way more time than what we see.

Did it get utilized or was it financially mismanaged or lost in wars? Was it a population mismanagement or an governance issue? If the Asia/Africa don’t have the resources…Europe doesn’t have it? Where is it?

– PR

ANSWER: It always seems to be mismanagement more than anything. The downside of a “representative” form of government (Republic) is that those who “represent” the people as their full-time career are subject to bribes. A Democracy is more direct insofar as the career people in government are the bureaucrats who are subject to review by the people. As long as they are not career politicians, then they will perform more of a check and balance against the corruption that always takes place in every type of political system. Career politicians accept money from lobbyists BECAUSE they continually need funds to run in the next election. It is an endless cycle of corruption.

Jun 17 2019

China vs the US in Trade Negotiations

Armstrong Economics Blog/Basic Concepts

Re-Posted Jun 17, 2019 by Martin Armstrong

QUESTION:

Mr Armstrong

In your opinion of Trump’s trade war policy, you disagree with him because it makes China look weak. What is your solution when the real problem is China stealing intellectual property and they have been called out on it. A person or party always looks weak when they get caught doing something illegal or immoral. Is a little dose of humility and acknowledgment of the error too much to ask?

ANSWER: When dealing with nations, you really cannot humiliate the other side. The best way to deal with that is privately to make it appear there is cooperation and dignity. Both sides must save face. This is not a brawl nor is it a negotiation in a lawsuit. I believe that there is a huge cultural divide and that is a big problem. Many in the private sector in Asia do not negotiate the same way things are done in the West.

The best way is to negotiate behind the curtain and allow the victory to be shared. Head to head confrontation will never win. They cannot afford to yield. This is the same problem with Russia. How can anyone expect Putin to say, “Oh, sorry, you are right. I will yield to your sanctions!” There is less than a zero percent chance of that EVER happening and it would be political suicide for Putin to adopt such a policy in Russia.

I have been in that position of trying to negotiate between two foreign governments. It is not an easy task. One government asked me to see what I could do because I knew the leadership in the other. You must respect the dignity of each player when you are at that level of negotiation

Jun 17 2019

Huawei Tech Prepares for 40 to 60 Percent Drop in International Smartphone Shipments…

Re-Posted from The Conservative Tree House on June 16, 2019 by sundance

Bloomberg has an interesting article citing an internal discussion within Chinese technology company Huawei as they estimate the financial impact to the U.S. blacklist position.

Do the math… Huawei estimates an international drop of between 40 million to 60 million units at an average retail cost of $500 per unit. That is a stunning financial forecast for a drop in sales.

(Via Bloomberg) Huawei Technologies Co. is preparing for a 40% to 60% drop in international smartphone shipments as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businesses.

China’s largest technology company is crunching internal estimates and exploring options including pulling the latest model of its marquee overseas label, the Honor 20, people familiar with the matter say.

The device begins selling in parts of Europe June 21 including France and the U.K., but executives are monitoring the launch and may cut off shipments if it sells poorly as expected, they said, asking not to be identified discussing internal matters. Already, two of France’s largest carriers aren’t bothering with the Honor at all, two people familiar with the matter said.

Huawei sales and marketing managers are internally charting a drop in volumes of anywhere between 40 million to 60 million smartphonesthis year, the people said. That’s a big chunk of an international business that in 2018 accounted for almost half of the 206 million phones it moved.

The unusually wide range underscores the uncertainty gripping Huawei, a Chinese national champion that Washington accuses of aiding Beijing in espionage — something the company has repeatedly denied.

The U.S. in May blacklisted Huawei, choking off the American components and software it needs to run its businesses. That includes updates for the Google Android system that powers all its smartphones abroad. Without that software, devices like the Honor 20 wouldn’t be able to run critical apps like Google Maps and Gmail.

[…] Priced at 399 pounds ($500), the Honor 20 runs on the most advanced Android 9 software and is the latest in a line that’s won over budget-conscious consumers, including in the U.S.

[…] Huawei aims to grab as much as half of the smartphone market in China in 2019 to offset the decline overseas, the people said, citing internal discussions about year-end goals.

While the domestic market is shrinking, Huawei hopes to boost shipments by investing in marketing and expanding distribution channels, one of the people said. (more)

$20 to $30 BILLION loss on Smartphones alone.

Jun 17 2019

Sunday Talks: Peter Navarro -vs- Charles Payne…

Re-Posted from The Conservative Tree House on June 16, 2019 by sundance

Charles Payne, filling in for Maria Bartiromo, interviews White House Manufacturing and Trade Policy advisor Peter Navarro. Unfortunately the interview begins with a discussion of tariff polling…. The vast majority of Americans have no understanding of the impact of tariffs and/or MAGAnomic policy; they only know the economic outcomes they can feel.

Mr. Navarro walks through how tariffs interact with global supply chains and the financial manipulation by multinational corporate interests.

Jun 17 2019

President Trump on DOJ/FBI in 2016: “It was a set-up” … “I would say that President Obama had to know about it”…

Re-Posted from The Conservative Tree House on June 16, 2019 by sundance

President Donald Trump granted a three-day exclusive and extensive interview to ABC News ¹propagandist, and narrative engineer, George Stephanopoulos.

[¹You might remember Stephanopoulos was actually deployed by the DNC in 2012 to ask GOP primary candidates in an ABC debate about the constitutionality of requiring insurance companies to pay for birth control pills. A totally out of left-field goofy question that no-one understood until two-days later when the DNC trotted out Sandra Fluke]

Well, here’s Stephanopoulos again, somehow granted access (likely by a person inside the White House coordinating with Nancy Pelosi). The final broadcast will be heavily edited, manipulated and presented for distribution and maximum political damage; with the intent to assist Nancy Pelosi and the impeachment narrative at 8:00pm this evening.

In an effort to gain maximum publicity ABC has released some preview segments to stimulate interest by a national audience.

[Transcript at 10:38] President Trump: “It’s very simple; very simple. There was no crime. There was no collusion. The big thing is collusion. Now, there’s no collusion. That means they set — it was a setup. In my opinion, and I think it’s going to come out.”

Stephanopoulos: “Who set it up?”

President Trump: “We’re going to find out very soon, because I really believe it’s going to come out. When you look at Strzok, these FBI guys that were low-lifes. When you look at – because the FBI’s the greatest- but these top people were absolute low-lifes. When you look at Strzok and Page, and they’re talking about an insurance policy ‘just in case she loses’, that was the insurance policy.”

Stephanopoulos: “You know I’ve heard you talk about”…

President Trump: “George, I went through the insurance policy.”

Stephanopoulos: “I understand that, but if they were determined to prevent you from becoming president, why wouldn’t they leak it before hand?”

President Trump: “You’d have to ask them.”…

Stephanopoulos: “Have it come out before the election”..

President Trump: “Oh, they tried. They tried – and you know what, had that gone out before the election, I don’t think I could have – I don’t think I would have hand enough time – to defend myself.”

Stephanopoulos: “You clearly believe there was a group of people working against you. Do you think President Obama was behind it?”

President Trump: “I would say that he certainly must have known about it because it went very high up in the chain. But you’re going to find that out. I’m not going to make that statement quite yet. But I would say that President Obama had to know about it.”

Reminder:

George Stephanopoulos always operates with an agenda. Most have forgotten a Jan ’12 New Hampshire debate when Stephanopoulos asked Mitt Romney a very carefully worded and scripted question, seeming to come out of left field, about whether states have the right to ban contraception. Exactly two weeks later Sandra Fluke and the DNC 2012 campaign attack narrative “Romney’s War On Women” began. WATCH:

The 2019 version of Stephanopoulos has all the same characteristics, purposes and intents as the 2012 version of Stephanopoulos.

In 2012 he set up: “war on women”. In 2019 he is setting up: “Trump impeachment”.

How the White House did not know that George Stephanopoulos would be used to position the Pelosi impeachment narrative is beyond my ability to comprehend.

Jun 17 2019

Hong Kong Leader Carrie Lam Suspends Chinese Extradition Proposal…

Re-Posted from The Conservative Tree House on June 16, 2019 by sundance

~ Dance With The Dragon ~

Amid the furor from hundreds-of-thousands -perhaps millions- of protestors, Hong Kong leader Carrie Lam announces a ‘suspension‘ of the proposed extradition law that would have permitted extradition of Hong Kong residents to Chinese law enforcement.

Lam apologized on Sunday, for the way the Hong Kong government handled the proposal but she did not fully take the controversial law off the table. The ripple effect of the proposal itself now calls into question the autonomy of Hong Kong, and many observers foresee it is now only a matter of time before China takes a tighter grip.

Currently Hong Kong is not subject to the same economic consequences within the U.S-China confrontation. As long as Hong Kong is considered ‘autonomous’ they remain detached from U.S. tariffs and other measures targeted to China. However, if China breeches the increasingly unclear barriers, judicial and legal systems intended to provide that autonomy – well, then the situation could change. Hong Kong is tenuous at best.

HONG KONG (Reuters) – Hong Kong’s leader Carrie Lam apologized to its people on Sunday as an estimated 1 million-plus black-clad protesters insisted that she resign over her handling of a bill that would allow citizens to be sent to mainland China for trial.

[…] On Sunday, she apologized for the way the government had handled the draft law, which had been scheduled for debate last Wednesday, but gave no further insight into its fate.

[…] The protests have plunged Hong Kong into political crisis, heaping pressure on Lam’s administration and her official backers in Beijing.

Critics say the planned extradition law could threaten Hong Kong’s rule of law and its international reputation as an Asian financial hub. Some Hong Kong tycoons have already started moving personal wealth offshore.

U.S. Secretary of State Mike Pompeo said President Trump would raise the issue of Hong Kong human rights at a potential meeting with president Xi Jinping at the G20 summit in Japan this month. (read more)

This controversy couldn’t come at a worse time for Chinese Chairman Xi Jinping as many in the international community are beginning to question the scale of damage likely to increase as an outcome of the U.S. -vs- China confrontation.

President Donald Trump is applying massive economic pressure upon China in an effort to force a complete restructuring of trade terms that will have global implications. The recent moves by Trump have significantly weakened the supply chain position of a Chinese nation that is dependent on raw materials, and the import/acquisition of technology systems.

As a consequence, on the geopolitical front – Beijing is now threatening any institution that would consider an exit from China, and simultaneously burning massive amounts of cash to subsidize their manufacturing position and offset any tariff impact.

As manufacturing investment begins to shift to South Korea, Vietnam, Japan, Philippines and alternate ASEAN nations, capital is starting to flow out of Hong Kong into safer financial systems within Tokyo and Singapore.

The situation for Chairman Xi is worsening daily and U.S. President Donald Trump has only just begun the consequence phase.

China has never faced a structural economic challenge so comprehensive and simultaneously so consequential. Decades of central planning by Beijing is being deconstructed by President Trump, and the Chinese have yet to see the worst of it.

Historically the totalitarian Chinese response has been to drop the panda mask and turn to their Red Dragon authoritarian nature. However, until now they have only faced internal challenges to their systems….

President Trump is applying external pressure, external challenges, and Beijing is discovering when they unleash the Dragon approach into an external global market that is adverse to Dragon instability, the economic systems do not acquiesce. Instead, with more antagonism and threats the free West responds by quietly discontinuing the relationship.

Beijing has no frame-of-reference, culturally, to understand this dynamic. Economic systems, based on freedom and capitalistic markets, are like free people… neither like to be threatened and controlled by oppressive regimes.

Stunning how consequential this is in the larger dynamic.

Jun 17 2019

Sunday Talks: Secretary of State Mike Pompeo -vs- Chris Wallace…

Re-Posted from The Conservative Tree House on June 16, 2019 by sundance

Secretary of State Mike Pompeo appears on Fox News Sunday to debate antagonistic DC Swamp Guard Chris Wallace. The primary topic was the recent attacks on shipping tankers by Iranian elements in the Gulf of Oman.

Additionally, Secretary Pompeo discussed the protests in Hong Kong against the growing influence from Beijing; the issues with North Korea to achieve a positive outcome with Kim Jong Un; the New York Times story on U.S. active measures against Russia; and the nonsensical -hypothetical- foreign opposition research issue.