QUESTION: Mr. Armstrong; You had once written the Christine Lagarde was only a lawyer and she was really put in the role of the IMF chief by Obama. What do you have to comment on this new Bulgarian selection? DO you know her?
HU
ANSWER: Kristalina Georgieva will probably take over the International Monetary Fund (IMF). At least this Bulgarian is an economist, and she has banking experience whereas Christine LaGarde did not. Georgieva is currently chief executive of the World Bank. I do not know her personally, although we probably shook hands yet nothing more.
Georgieva was considered back in 2016 for the post of the UN Secretary General, but was passed over for the Portuguese António Guterres. For the IMF, Georgieva was the candidate of France and of some Eastern European states. Germany and others were backing the former Dutch Finance Minister Jeroen Dijsselbloem. This time the French won.
If we look at Georgieva background, she does hold a doctorate in economics and research at the London School of Economics and at the Massachusetts Institute of Technology (MIT). From 1993 to 2010 she worked at the World Bank. She headed the Environmental Department of Washington Bank and, in the meantime, her representative office in Moscow. In 2010 she moved to Brussels becoming a Commissioner as Europe’s top development aid worker.
When Jean-Claude Juncker took over the Presidency of the Commission in 2014, he made Georgieva Vice-President in charge of the budget. Georgieva had been involved in a major restructuring at the World Bank turning it greener. We should keep in mind that Georgieva wrote her doctoral thesis on “Environmental Policy and Economic Growth in the US.”
QUESTION: This whirligig talk of whether the Fed cuts rates by 25 or 50 basis points is carnival-level absurdity. Does the Fed have the “pretense of knowledge,” as F.A. Hayek, said, that they can regulate the economy like turning up or down the thermostat? I know you don’t agree with this, Martin, but then, Wall St. trades on daily sentiment not ideology.
TM
ANSWER: I understand the theory, but where it is seriously flawed is the idea that people will borrow simply because you lower rates. More than 10 years of Quantitative Easing, which has failed, answers that question. The way the Fed was originally designed allowed it to stimulate the economy by purchasing corporate paper directly, which placed it in a better management position. Buying only government paper from banks who in turn hoard the money fails. As Larry Summers admitted, they have NEVER been able to predict a recession even once.
The Fed lowered rates during every recession to no avail just as the ECB has moved to negative rates without success. The central banks are trapped and they are quietly asking for help from the politicians which will never happen.
CTH writes a great deal about President Trump’s economic policies, and how those policies are reversing the decades-long erosion of the middle-class. Factually, substantively and empirically the workers of America are gaining ground. Bigger and better than before, and far beyond what anyone else could have delivered.
This is not a theoretical exercise. The execution of a broad-based economic and global trade reset is underway. Today’s economic results, the growing strength of our U.S. economy, is a testament to the success of MAGAnomic policy being delivered. These results, when fully realized, will secure our economic future and last for generations.
All of that said, there is something we don’t emphasize enough: The team of Secretary Mnuchin, Secretary Ross, USTR Lighthizer, Trade and Manufacturing advisor Navarro and NEC Director Larry Kudlow, face a scale of opposition almost unfathomable in modern political terms. There are trillions at stake; hundreds of the most powerful financial interests in the world are against them; and yet this team is succeeding.
It takes incredible stewardship and fortitude to face down the Goliath’s of global interests. From Wall Street to the International Monetary Fund; to the World Bank and World Trade Organization; to the interests of Europe and China; and across all of the geopolitical boundaries enmeshed with all the multinationals therein. Quite remarkable.
Just sit for a minute and think about the scale of opposition…. it really is an incredible accomplishment, beyond almost anything anyone would have hoped or imagined.
The people’s president, Donald Trump and this private sector economic team; arguably the best and most qualified group ever assembled in modern history; deserve our appreciation, unyielding and full-throated support.
National Economic Council Chairman Larry Kudlow, appears on CNBC to discuss the U.S-China trade conflict that led to yesterday’s stock market drop. Additionally, Kudlow notes the strong key performance indicators that highlight the strength of the U.S. Main Street economy.
QUESTION: Hello,
about your recent post ‘The Sum of All our Economic Fears’… i understand you will give some advices to investors how to trade difficult times that lie ahead in 2020 and beyond. What i wonder is what we, non investors but just ordinary people who does have only house or the apartment they live in and day job, what we should do and what we can expect regarding crisis that’s coming our way. (many non investors are reading your blog, just for the love of knowledge, i’m sure you are aware of that)
Thank you for your time.
MR
ANSWER: The basic level of Socrates is designed for the non-investor who needs a broader outlook rather than short-term buy and sell strategies. I fully intend to make sure that information is available for the general public. The NY bankers have always wanted to shut down our forecasting, for they want people to only listen to their forecasts which are always self-serving. I will make every effort to ensure that this forecasts of Socrates will be available to the general public because we need not opinion and hype, but objectivity.
We are clearly cascading toward the Monetary Crisis Cycle as the USA wrong accuses China of manipulating its currency for trade advantages. All one needs do is look at the trend of the dollar against other major world currencies and you will quickly see that the trend of the dollar against the yuan is in line with the global trend. This is the problem we face when politicians simply follow the academic view of currencies when they are still teaching Keynesianism based upon fixed exchange rates. About 80% of China’s trade is with the rest of the world other than the United States. One does not lower its currency to impact 20% of its trade at the expense of the rest of the world.
I have written before that I was asked if I would teach at one of the top 10 universities in the world. I was surprised, to say the least. When I asked why would they even ask me the response was even more shocking. They actually said to me over lunch that they “knew” what they were teaching was wrong!. They also said the problem they face is those who have real-world experience are NOT INTERESTED in teaching classes in school. I said I would be glad to do a guest lecture, but I too had no interest in teaching a class every day.
Cina has been doing the exact opposite of what the US is accusing it. They have been supporting their currency and if they stopped and allowed it to float freely, then the US would witness probable new record highs in the dollar which will bring about the crisis we see coming by 2021.
I do not know what it is going to take to get governments to stop this nonsense over currencies. If the dollar was declining against all major currencies and China devalued the yuan counter-global-trend, then there would be an argument. But that is just not the case.
The yuan has been under pressure also because the yuan is too expensive within Asia and manufacture has been migrating to South East Asia. China has become the world’s second-largest economy by GDP (Nominal) and largest by GDP (PPP). When we look at the trade between the USA and China, we must look at goods v services.
The U.S. goods trade deficit with China was $419.2 billion in 2018, an 11.6% increase ($43.6 billion) over 2017.
The United States has a services trade surplus of an estimated $41 billion with China in 2018, up 0.8% from 2017.
Yes, we are one of the few rare services who publish our forecasting in China. We fall into the Services Catagory. About 80% of China’s trade is with the rest of the world other than the United States.
China’s Top Trading Partners
United States: US$479.7 billion (19.2% of total Chinese exports)
White House trade and manufacturing policy advisor Peter Navarro, appears with Lou Dobbs to discuss the current status of the U.S.-China trade conflict.
Within the interview Navarro discusses the impact of China devaluing their currency as a strategy to avoid U.S. tariffs on Chinese imports. WATCH:
Beijing has once again used their proxy province of North Korea to launch small two short-range ballistic missiles as leverage in the U.S. and China trade confrontation.
WASHINGTON – For the fourth time in less than two weeks, North Korea has fired projectiles into the Sea of Japan, a U.S. official said.
The two projectiles, fired on Tuesday morning local time, were assessed to be similar to the short-range ballistic missiles tested by North Korea last week, the official said. (read more)
Moments later President Trump and Treasury Secretary Steven Mnuchin fired a counter-missile directly into the heart of Beijing’s trade currency manipulation:
(Treasury) The Omnibus Trade and Competitiveness Act of 1988 requires the Secretary of the Treasury to analyze the exchange rate policies of other countries.
Under Section 3004 of the Act, the Secretary must “consider whether countries manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.” Secretary Mnuchin, under the auspices of President Trump, has today determined that China is a Currency Manipulator.
As a result of this determination, Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions. (more)
And so the dance with the dragon continues…
Chairman Xi devalues Chinese currency… Trump hits Chairman Xi with tariffs…. Beijing launches DPRK rockets…. Trump hits Chairman Xi with IMF/WTO designations….
Unfortunately for Chairman Xi Jinping, President Trump has bigger economic missiles than Beijing. Kyle Bass outlines the scale of what economic weapons President Trump has in his arsenal that are far more devastating than little Kim’s rockets. WATCH:
China needs to buy dollars to backstop their own currency (¥uan). When China trades with the U.S. they hold the return dollars as a peg against their weak currency. Remove the flow of dollars (lessen exports) and they start to run out of strong pegged currency.
What is happening today is not as much direct devaluation by China; rather they are intentionally allowing their currency to drop in value, in an effort to lower export prices and off-set any tariffs from the U.S. Simultaneously, Beijing is spending internally, burning cash, to keep their economy from weakening. Their Yuan burn rate is greater than the influx of higher valued dollars needed to hold their position.
They cannot keep this position indefinitely.
First, here’s a solid interview with former CEO Gerald Storch on how the currency devaluation leads to lower prices for U.S. consumers. Again, emphasizing the point that U.S. consumers are not paying for the tariffs against China. Watch:
President Trump responds to the current activity by China:
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Beijing says they will keep lowering the value of their currency to keep the flow of cheap Chinese manufactured goods flowing to the United States, regardless of tariffs. Simultaneously they need the returning higher valued dollars to prop-up their own diminishing currency.
Earlier today President Donald Trump delivered remarks from the White House about the shooting incidents in El Paso, TX, and Dayton, OH. [Video and Transcript]
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[Transcript] – THE PRESIDENT: Good morning. My fellow Americans, this morning, our nation is overcome with shock, horror, and sorrow. This weekend, more than 80 people were killed or wounded in two evil attacks.
On Saturday morning, in El Paso, Texas, a wicked man went to a Walmart store, where families were shopping with their loved ones. He shot and murdered 20 people, and injured 26 others, including precious little children.
Then, in the early hours of Sunday morning in Dayton, Ohio, another twisted monster opened fire on a crowded downtown street. He murdered 9 people, including his own sister, and injured 27 others.
The First Lady and I join all Americans in praying and grieving for the victims, their families, and the survivors. We will stand by their side forever. We will never forget.
These barbaric slaughters are an assault upon our communities, an attack upon our nation, and a crime against all of humanity. We are outraged and sickened by this monstrous evil, the cruelty, the hatred, the malice, the bloodshed, and the terror. Our hearts are shattered for every family whose parents, children, husbands, and wives were ripped from their arms and their lives. America weeps for the fallen.
We are a loving nation, and our children are entitled to grow up in a just, peaceful, and loving society. Together, we lock arms to shoulder the grief, we ask God in Heaven to ease the anguish of those who suffer, and we vow to act with urgent resolve.
I want to thank the many law enforcement personnel who responded to these atrocities with the extraordinary grace and courage of American heroes.
I have spoken with Texas Governor Greg Abbott and Ohio Governor Mike DeWine, as well as Mayor Dee Margo of El Paso, Texas, and Mayor Nan Whaley of Dayton, Ohio, to express our profound sadness and unfailing support.
Today, we also send the condolences of our nation to President Obrador of Mexico, and all the people of Mexico, for the loss of their citizens in the El Paso shooting. Terrible, terrible thing.
I have also been in close contact with Attorney General Barr and FBI Director Wray. Federal authorities are on the ground, and I have directed them to provide any and all assistance required — whatever is needed.
The shooter in El Paso posted a manifesto online consumed by racist hate. In one voice, our nation must condemn racism, bigotry, and white supremacy. These sinister ideologies must be defeated. Hate has no place in America. Hatred warps the mind, ravages the heart, and devours the soul. We have asked the FBI to identify all further resources they need to investigate and disrupt hate crimes and domestic terrorism — whatever they need.
We must recognize that the Internet has provided a dangerous avenue to radicalize disturbed minds and perform demented acts. We must shine light on the dark recesses of the Internet, and stop mass murders before they start. The Internet, likewise, is used for human trafficking, illegal drug distribution, and so many other heinous crimes. The perils of the Internet and social media cannot be ignored, and they will not be ignored.
In the two decades since Columbine, our nation has watched with rising horror and dread as one mass shooting has followed another — over and over again, decade after decade.
We cannot allow ourselves to feel powerless. We can and will stop this evil contagion. In that task, we must honor the sacred memory of those we have lost by acting as one people. Open wounds cannot heal if we are divided. We must seek real, bipartisan solutions. We have to do that in a bipartisan manner. That will truly make America safer and better for all.
First, we must do a better job of identifying and acting on early warning signs. I am directing the Department of Justice to work in partisan — partnership with local, state, and federal agencies, as well as social media companies, to develop tools that can detect mass shooters before they strike.
As an example, the monster in the Parkland high school in Florida had many red flags against him, and yet nobody took decisive action. Nobody did anything. Why not?
Second, we must stop the glorification of violence in our society. This includes the gruesome and grisly video games that are now commonplace. It is too easy today for troubled youth to surround themselves with a culture that celebrates violence. We must stop or substantially reduce this, and it has to begin immediately. Cultural change is hard, but each of us can choose to build a culture that celebrates the inherent worth and dignity of every human life. That’s what we have to do.
Third, we must reform our mental health laws to better identify mentally disturbed individuals who may commit acts of violence and make sure those people not only get treatment, but, when necessary, involuntary confinement. Mental illness and hatred pulls the trigger, not the gun.
Fourth, we must make sure that those judged to pose a grave risk to public safety do not have access to firearms, and that, if they do, those firearms can be taken through rapid due process. That is why I have called for red flag laws, also known as extreme risk protection orders.
Today, I am also directing the Department of Justice to propose legislation ensuring that those who commit hate crimes and mass murders face the death penalty, and that this capital punishment be delivered quickly, decisively, and without years of needless delay.
These are just a few of the areas of cooperation that we can pursue. I am open and ready to listen and discuss all ideas that will actually work and make a very big difference.
Republicans and Democrats have proven that we can join together in a bipartisan fashion to address this plague. Last year, we enacted the STOP School Violence and Fix NICS Acts into law, providing grants to improve school safety and strengthening critical background checks for firearm purchases. At my direction, the Department of Justice banned bump stocks. Last year, we prosecuted a record number of firearms offenses. But there is so much more that we have to do.
Now is the time to set destructive partisanship aside — so destructive — and find the courage to answer hatred with unity, devotion, and love. Our future is in our control. America will rise to the challenge. We will always have and we always will win. The choice is ours and ours alone. It is not up to mentally ill monsters; it is up to us.
If we are able to pass great legislation after all of these years, we will ensure that those who were attacked will not have died in vain.
May God bless the memory of those who perished [DEL: in Toledo :DEL] . May God protect them. May God protect all of those from Texas to Ohio. May God bless the victims and their families. May God bless America.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
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