This is funny in so many ways; especially for CTH readers who have a far better-than-ordinary understanding of the big picture Trump goals around China.

(1) CNBC tweeted this story last night (note the date/time). (2) It is written exclusively from the perspective of the Goldman Sachs analysts who represent the U.S. multinational position. (3) However, the article was actually written on May 12, 13, 2019.

What is funny about CNBC pushing this story, NOW, is how the claims within the CNBC story can be fact checked; and their predictions are, well, absurd (especially in hindsight).   Keep in mind this was written in May, and tweeted last night for some reason:

(Via CNBC) “Goldman Sachs said the cost of tariffs imposed by President Donald Trump last year against Chinese goods has fallen “entirely” on American businesses and households, with a greater impact on consumer prices than previously expected.

The bank said in a note that consumer prices are higher partly because Chinese exporters have not lowered their prices to better compete in the US market.” (link)

This Goldman Sach’s claim –made in May– can now be reviewed for accuracy by actual results on import pricing assembled by the Bureau of Labor Statistics in September:

(BLS Link to Data)

As you can see, four months after the Goldman Sach’s claim, the results are entirely false.  The price of imported goods has decreased; additionally, China has further devalued their currency since May, creating an even a larger price offset.

Further in the Goldman Sach’s claims:

“Goldman also said the risk of a final round of tariffs on the roughly $300 billion of remaining imports from China has now risen to 30%.”

In their May 2019 analysis, Goldman put the odds of President Trump following through on more tariffs at 30 percent.   They really just don’t believe President Trump is committed to the China confrontation.  From their analytical perspective, no U.S. President would ever go into a full economic confrontation with China.  Remember, Goldman Sachs represents the majority opinion of the Wall Street ‘multinational’ community.

This analysis from Goldman Sachs underwrites the majority of their multinational investment planning and loans to multinational Wall Street corporations.  Laughably, we know the end result is that Trump did execute more Chinese tariffs and the Goldman Sachs analysis was/is 100 percent wrong.

And here’s the kicker:

“Our baseline expectation is that the U.S. and China will strike a deal later this year. We think this would come in the form of a gradual, staggered reduction in tariffs on a last-in, first-out schedule,” the bank said.

“There is, however, a risk of further escalation,” Goldman said. (link)

Again for emphasis, Goldman Sachs controls the investment direction for tens-of-billions for U.S. multinational corporations.   The quotes and opinions above represent their outlook, their actual belief, and what they were selling their clients in May 2019.

• They were wrong about price impacts.
• They were wrong about Trump following through on additional tariffs.
• And it’s almost certain they are wrong about a pending deal before the end of this year. (It’s now mid September).

What’s the takeaway?   Well first, Goldman Sachs controls hundreds-of-billions. Goldman is the predominant voice that all of the other Wall Street multinationals’ look toward.  Goldman is the incubator for almost all of the financial experts at the Fed. Goldman is also the baseline for all of the main Wall Street pundits….

Goldman is also 100% demonstrably wrong.

If you wonder why the Federal Reserve looks like they are running around with one foot nailed to the floorboard… well, look no further than Goldman Sach’s analysis.

Second, think about what will happen when these multinationals finally realize that President Trump is serious; and there will be no U.S-China trade deal that retains any semblance of the current trade relationship (if at all).

As soon as these Wall Street knuckleheads wake up to reality (likely dragging, kicking and screaming will be involved), they will have to shift their investment planning and strategic advice to those who want loans and investment. When that happens a much larger portion of the “multinational” money starts flowing back into the United States, and is no longer “multinational”.

It’s just too darn funny not to point out…..

From the first moment when he announced his intent to run for President of the United States in 2015, Donald Trump was very clear on one specific aspect to his view of why people would vote for him.  As a candidate, he repeated it often:

So the reporter said to me the other day, “But, Mr. Trump, you’re not a nice person. How can you get people to vote for you?”

I said, “I don’t know.” I said, “I think that number one, I am a nice person. I give a lot of money away to charities and other things. I think I’m actually a very nice person.”

But, I said, “This is going to be an election that’s based on competence, because people are tired of these nice people. And they’re tired of being ripped off by everybody in the world.”

President Donald J Trump continues to highlight that message today:

It’s funny, from time-to-time people ask “how is CTH consistently able to predict what Donald Trump will do about a complex issue”?  In reality the answer is simple, go back and re-read his hour long campaign kick-off speech. [See Here]

Donald Trump, now President Trump, is one of the most consistent people in history when it comes to his big picture views; and also his big picture solutions.  There are small shifts, and slight changes in the direction toward the solution, but ultimately the big picture destination is consistent.

Specifically because President Trump works on optimal solutions toward the goal destination, his objective, the non-politician takes a different approach than would be expected from a typical politician.  Ultimately this is how Trump is able to accomplish so much more in a similar amount of time; he’s not poll-testing the route.

Each big goal, each major objective, has a series of way-points.  The process for reaching those way-points is independent and entirely based on the goal itself.  Politicians look at this approach and think of it as inconsistent, because the travel is not subject to a specific map that is always followed.

Because President Trump’s search for ‘optimal travel’ is not based on a prior path – but based on each unique destination, the goal is more predictably reached.  In many ways it is just common sense.

Competence in policy is not measured by endless planning, discussion and debate… it is measured by results.  Achieving results requires action.  Start the journey and head to the way-point; reach the initial objective – evaluate, and immediately measure the next way-point; repeat until you reach the destination.

[…] So we need people— I’m a free trader. But the problem with free trade is you need really talented people to negotiate for you. If you don’t have talented people, if you don’t have great leadership, if you don’t have people that know business, not just a political hack that got the job because he made a contribution to a campaign, which is the way all jobs, just about, are gotten, free trade terrible.

Free trade can be wonderful if you have smart people, but we have people that are stupid. We have people that aren’t smart. And we have people that are controlled by special interests. And it’s just not going to work.

[…]  I love China. The biggest bank in the world is from China. You know where their United States headquarters is located? In this building, in Trump Tower. I love China. People say, “Oh, you don’t like China?”

No, I love them. But their leaders are much smarter than our leaders, and we can’t sustain ourself with that. There’s too much— it’s like— it’s like take the New England Patriots and Tom Brady and have them play your high school football team. That’s the difference between China’s leaders and our leaders.

They are ripping us. We are rebuilding China. We’re rebuilding many countries. China, you go there now, roads, bridges, schools, you never saw anything like it. They have bridges that make the George Washington Bridge look like small potatoes. And they’re all over the place.

We have all the cards, but we don’t know how to use them.

We don’t even know that we have the cards, because our leaders don’t understand the game.

We could turn off that spigot by charging them tax until they behave properly. (Cont…)

The recession-hoping pundits took more blows to their remaining credibility today when both the Commerce Department and the Bureau of Labor Statistics (BLS) deliver excellent economic results from August that continue to exceed MSM expectations.

The Commerce Dept. announced that retail sales climbed by 0.4 percent in August, twice as high as the 0.2 percent analysts had predicted. The result highlights retail sales strength of more than 4 percent year-over-year.   These excellent results come on the heels of blowout data in July, when households boosted purchases of cars and clothing.

The better-than-expected number stemmed largely from a 1.8 percent jump in spending vehicles. Online sales, meanwhile, also continued to climb, rising 1.6 percent. That’s similar to July, when Amazon held its two-day, blowout Prime Day sale. (link)

(Via Reuters) Retail sales rose 0.4% last month, lifted by spending on motor vehicles, building materials, healthcare and hobbies. Data for August was revised slightly up to show retail sales increasing 0.8% instead of 0.7% as previously reported.

Economists polled by Reuters had forecast retail sales would gain 0.2% in August. Compared to August last year, retail sales advanced 4.1%. Retail sales have increased for six straight months, the longest such stretch since June 2017. (more)

Doesn’t look like middle-class America is overly concerned about the noise coming from the pundits.   Likely that’s because wages are higher, inflation is lower, and consumer confidence is strong….  MAGAnomics is working.

Additionally, remember all those MSM hours and newspaper column inches where the professional financial pundits were claiming Trump’s tariffs were going to cause massive increases in prices of consumer goods?

Well, exactly the opposite is happening [BLS report]  Import prices continue to drop:

[Table 1 – BLS report link]

This is a really interesting dynamic that no-one in the professional punditry will dare explain.  Trump’s tariffs are targeted to specific sectors of imported products.  [Steel, Aluminum, and a host of smaller sectors etc.]  However, when the EU and China respond by devaluing their currency, that approach hits all products imported, not just the tariff goods.

Because the EU and China are driving up the value of the dollar, everything we are importing has become cheaper.   Not just imports from Europe and China, but actually imports from everywhere.   All imports are entering the U.S. at substantially lower prices.

This means when we import products we are also importing deflation.

This price result is exactly the opposite of what the pundits were predicted back in 2017 and 2018 when they were pushing the rapid price increase narrative.

Because all the export dependent economies are reacting with such urgency to retain their access to the U.S. market, aggregate import prices are actually lower now than they were when the Trump tariffs began:

[…]  Prices for imports from China edged down 0.1 percent in August following decreases of 0.2 percent in both July and June. Import prices from China have not advanced on a monthly basis since ticking up 0.1 percent in May 2018. The price index for imports from China fell 1.6 percent for the year ended in August.

[…]  Import prices from the European Union fell 0.2 percent in August and 0.3 percent over the past 12 months.

[Page #4 – BLS Report, pdf] – BLS press release

In a quiet admission of food dependency, China purchased 600,000 tonnes of soybeans yesterday (link), and simultaneously announced that U.S. pork and soybean imports would be exempt from further tariff increases.

The surface message Beijing is selling, surrounds their magnanimous panda narrative of reaching out to diminish trade friction.  However, below the surface everyone knows China cannot feed itself,and if food prices keep rising they could likely have growing unrest.

Beijing’s decision to not enhance tariffs of pork and soybeans is very self serving; particularly because China owns Smithfield foods, the largest producer of U.S. pork.  In essence China has lessened tariffs against their own company.

(SCMP) China has announced that it will exclude imports of US soybeans, pork and other farm goods from additional trade war tariffs, opening the door for significant purchases of agricultural products.

The official Xinhua News Agency reported on Friday that China’s National Development and Reform Commission and the Ministry of Commerce made the exemption in response to the US’ decision of postpone an increase in the tariff rate on $250 billion of Chinese goods from October 1 to October 15.

It comes after US President Donald Trump spoke on Thursday of the possibility of an “interim trade deal” over the coming weeks.

Beijing will allow Chinese businesses to purchase a “certain amount of farm products such as soybeans and pork
” from the United States, according to the Xinhua report. “China’s market is big enough and there’s great potential to import high-quality US farm products.” (read more)

Now we can see why Vice-Premier Liu He asked President Trump to postpone the tariffs on Chinese products from October 1st to October 15th.

Manipulative panda needed the two-week delay as the basis for a face-saving move.

Likely Beijing was already going to make the bean purchases and exempt the pork products etc.  China has no choice, they need the food.  However, making the purchase as a stand alone would make them appear weak…. So Beijing asks President Trump for a two-week delay,… then they make the purchase,…. and then they position the purchase as a response to the two-week delay.

Typical panda.

POTUS knew….

Donald J. Trump

✔@realDonaldTrump

It is expected that China will be buying large amounts of our agricultural products!

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Tonight President Trump will be delivering remarks at the 2019 House Republican Conference Member Retreat Dinner from Baltimore, Maryland.  The anticipated start time is 7:15pm EDT.

WH Livestream Link – RSBN Livestream Link – Fox News Livestream Link

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