activistpost--2019-03-28--The Federal Reserves Controlled Demolition Of The Economy Is Almost Complete

The Federal Reserve’s Controlled Demolition Of The Economy Is Almost Complete

The Federal Reserve is an often misunderstood entity, not only in the mainstream, but also in alternative economic circles. There is this ever pervasive fantasy on both sides of the divide that the central bank actually “cares” about forever protecting the US economy, or at least propping up the US economy in an endless game of “kick the can”. While this might be true at times, it is not true ALL the time. Things change, agendas change, and sometimes the Fed’s goal is not to maintain the economy, but to destroy it.  The delusion that the Fed is seeking to kick the can is highly present today after the latest Fed meeting in which the central bank indicated there would be a pause in interest rate hikes in 2019. As I have noted in numerous articles over the past year, the mainstream media and the Fed have made interest rates the focus of every economic discussion, and I believe this was quite deliberate. In the meantime, the Fed balance sheet and its strange relationship to the stock market bubble is mostly ignored.  The word “capitulation” is getting thrown around quite haphazardly in reference to the Fed’s tightening policy. And yet, even now after all the pundits have declared the Fed “in retreat” or “trapped in a Catch-22”, the Fed continues to tighten, and is set to cut balance sheet assets straight through until the end of September. Perhaps my definition of capitulation is different from some people’s.  One would think that if the Fed was in retreat in terms of tightening, that they would actually STOP tightening. This has not happened. Also, one might also expect that if the Fed is going full “dovish” that they would have cut interest rates in March instead of holding them steady at their neutral rate of inflation. This has not happened either. In fact, I’m not exactly sure how anyone can claim with a straight face that the Fed has given up on Quantitative Tightening (QT).  Despite the many assumptions out there that the Fed is going to reverse on interest rates, I believe this is wishful thinking and that the Fed will not reverse rates in 2019.  What I do see is the Fed using rhetoric and head fakes to give the impression that they plan to go dovish in the future. And, this is being wrongly interpreted as the Fed being dovish now. But why is the Fed doing this while also continuing to dump its balance sheet? In my view, it is because they are almost finished with the task they set out to accomplish with QT in the first place, and they now have to make it appear as though they want to accommodate as the system breaks down.  In my article ‘Party While You Can – Central Bank Ready To Pop The Everything Bubble’, I outlined a process or tactic which the Fed has used on many occasions in the past: The creation of economic bubbles through inflation and artificially low interest rates, followed by abrupt tightening and higher interest rates into economic weakness. This tactic is highly effective in accomplishing ONE GOAL – financial collapse.  It is the same strategy the Fed used at the beginning of the Great Depression. It is also what the Fed used to trigger the crash of 2008. And, in 2018-2019, the Fed is doing it again.  For over two years now the Fed has been instituting tightening measures after inflating perhaps the largest economic bubble in modern history, also known as “the everything bubble”. The Fed did this despite extreme weakness in economic fundamentals, and is continuing forward until the fourth quarter of this year despite nearly every sector of the economy showing steep declines or a greatly reduced pace of growth.  It is perhaps not a coincidence that the Fed announced it would be cutting assets until September just as the Treasury Yield curve inverted for the first time since 2007.  The same thing happened just before the crash and recession that started in 2008. An inverted yield curve is generally a sure sign of a decelerating economy or recession/depression.  What bewilders me are the numerous claims in the mainstream and alternative media that the Fed is somehow oblivious to what it is doing. This is simply not true. Jerome Powell in his statements in the Fed Minutes of October 2012 explains plainly exactly what would happen if and when the Fed tightened policy into weakness. He essentially admits that a crash will occur.  Four years later in the wake of the Trump presidency, Powell somehow conveniently finds himself the Chairman of the Fed, and what does he do? He tightens policy into economic weakness fully aware of what would happen next. I’ll repeat this point again because I don’t think some analysts out there get it: The central bankers KNOW that they are causing a crash.  They are doing it deliberately. The question we need to ask is, why?  Over the past ten years the Fed may have acted as a crutch for markets, but this was not their true goal. Rather, the 2008 credit bubble collapse was used by the bankers as a rationale to create an even bigger bubble; a bubble that now encompasses every aspect of our financial structure. QT was needed to pop this bubble, and so the Fed tightened.  For many months now the Fed has stated that the US economy is “strong” and “in recovery” despite the evidence at hand. In March, they did not reverse tightening; they only admitted in an indirect way that the economy is not in recovery. They have until September to finish using QT for a controlled demolition of the Everything Bubble. This is more than enough time.  As noted in recent articles, US housing, autos, credit, retail, and even employment are faltering, while prices in most necessities remain high or are climbing. All that is left is for stock markets to follow the fundamental indicators down (as they usually do).  This trend started at the same time as the Fed’s tightening began.  All that was needed to set the avalanche in motion were moderate rate hikes and asset cuts.  The timing of the current crash is perfect for the banking elites for a number of reasons. Most importantly, they now have a scapegoat to pin the crash on in the form of “populist movements”. I warned about this ploy way back in early 2016 before the Brexit vote and the presidential elections. It is the reason why I predicted the Brexit vote would succeed and that Donald Trump would be president. The elites needed someone to blame for the collapse of the everything bubble they have been planning for the past 10 years.  The Brexit has turned into a three ring circus, a major distraction from the ultimate intended end game which I have long believed will be a “no deal” scenario. A no deal event is being painted in the mainstream media as a kind of economic doomsday for Europe, and I believe it will be, but not for the reasons they describe. Europe has been set up for a fall, just like the US, for many years now. Government and corporate debt levels are at extreme highs and major banks in Germany and Italy are on the verge of implosion.  A hard Brexit is useful to the elites as a scapegoat for a crash that was going to happen anyway. The bankers don’t plan on facing the music, they want “populist” groups to get the blame.  Trump has been a very effective ally to the banking class. After loading his cabinet with these “swamp creatures”, he then went on to take full credit for the very stock market rally he originally criticized during his campaign as a fraudulent bubble created by central bank stimulus. Then, he started a trade war which has dragged on for many months. It has shown no signs of slowing, and, is providing excellent cover for the Fed as it pulls the plug on life support for the economy.  Trump’s exoneration in terms of the Mueller probe and the Russiagate farce was easy to see coming.  I have been saying for the past two years that Trump will never be impeached (or never impeached successfully) exactly because the banking elites WANT him right where he is.  Russiagate was meant to drive leftists even further into extremism, it was NOT meant to unseat Trump.  If the markets were to tank this year (in January I predicted they would retest December lows starting at the end of March through April), then Trump would get total credit in the mainstream for the crisis and the Fed would avoid the majority of the blame.  Once again, lets consider the timing of current events – The Fed is tightening until September but pretending as if it is backing off. The yield curve has inverted. Major fundamentals are dropping exponentially. At the same time, we have Europe on the verge of a fabricated crisis in the form of a potential no deal Brexit, and we have US trade negotiations which have been delayed once again, perhaps until June, maybe longer.  I don’t believe in the “perfect storm” as a matter of coincidence, but I do believe according to the evidence that perfect storms can be deliberately engineered. Bottom line, no matter what the mainstream says in the coming months, the Fed knew what it was doing.  There are many advantages to an engineered crash. As noted, it was going to happen eventually anyway. It is simply delusion to think that the central bank can prop up the system forever. We sometimes hear the claim that this was done in Japan, but the Fed increased its balance sheet to $4.5 Trillion dollars in the span of two years – it took the Bank of Japan decades to get to the same level. There comes a point in which stimulus and increased debt provides diminishing returns when trying to hide economic weakness, and the Fed has already hit that point. The Fed is crashing the system now because they have sovereignty activists and nationalists to point the finger at. They are also crashing the system now because the everything bubble is at its peak. Corporate and consumer debt are at historic highs, and the bankers are looking to cause maximum damage. Finally, the banking establishment has loyalties to certain agendas which are far outside national interests, including the often mentioned Agenda 2030 and the “global economic reset”. These agendas call for greatly increased global centralization of economic power as well as geopolitical power; in other words, global governance. With chaos comes opportunity for those in power. They don’t let a good crisis go to waste, especially when they created the crisis. I have written extensively about this issue in past articles such as ‘The Economic End Game Explained’ and ‘IMF Reveals Cryptocurrency Is The New World Order End Game’. No matter what the mainstream media says over the course of this year, I want readers to remember that this was a disaster at least ten years in the making. It is not something that suddenly fell out of the sky. It was not something that was unexpected or unpredictable. It was highly predictable to those with the eyes to see. It was NOT a mistake. If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE. You can contact Brandon Smith at: [email protected] With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.


americablognews--2019-08-28--New poll is just AWFUL for Trump Voter concern about the economy grows

New poll is just AWFUL for Trump; Voter concern about the economy grows

After 2016, it’s understandable that Democrats are wary of polls predicting victory against Trump next year. Also, we’ve got another 15 months to election day, and anything can happen between now and then.  Having said all of that, the new Quinnipiac poll is just God-awful news for Trump, and it’s not the kind of thing a sitting president wants to see heading into a re-election. (And I’d rather see a bad poll for Trump 15 months out, than a good one.)  “For the first time since President Trump was elected, more voters say that the national economy is getting worse than getting better, with 37 percent saying it is getting worse, 31 percent saying it is getting better, and 30 percent saying it is staying the same. This compares to a June 11, 2019 poll in which 23 percent of voters said that the national economy is getting worse, 39 percent said it is getting better, and 37 percent said it is staying the same.”  And while those polled said they still think the economy is in excellent or good shape (61%), those are the lowest numbers in over a year, meaning, people are getting worried.  Also problematic, people are increasingly blaming Trump for their concerns over the worsening economy:  The economy is the only thing Trump really had going for his re-election. Regardless of the fact that unemployment fell 5 points under Barack Obama, and only 1 point under Trump, sitting presidents tend to get the credit or blame for the economy under their watch, and up until now Trump was sitting on a pretty good economy. Not any more — or at least, that’s what’s the public thinks.  Regarding Trump’s approval rating on various issues, he’s 3 points underwater on the economy (46% approve, 49% disapprove), and it’s even worse on other key issues:  Also, per 538, Trump’s overall approval is slowing moving down, now nearing 41%.  And finally, also from Quinnipiac, Trump loses, by wide margins, to pretty much every top Democratic candidate:  Note that Trump never even breaks 40% against any of the top Dems. That’s a horrible showing for a sitting president, especially one sitting atop a successful (until now) economy.  So, sure, let’s not get ahead of ourselves. It’s a long way till November 2020, and polls aren’t always right. But. These numbers are just awful for Trump, and they’re consistent with other polls showing Trump losing by a wide margin to every top Democratic candidate. None of that is good news for an incumbent president hoping to be re-elected in the coming year.


bbc--2019-01-14--Trump threatens to devastate Turkish economy over Syrian Kurds

Trump threatens to 'devastate' Turkish economy over Syrian Kurds

US President Donald Trump has threatened to "devastate Turkey economically" if it attacks Kurdish forces in Syria following a planned pullout of US troops.  In two tweets on Sunday, Mr Trump said that he didn't want the Kurds to provoke Turkey either.  US forces have fought alongside a Kurdish militia in northern Syria against the Islamic State (IS) group.  Turkey, however, regards the People's Protection Units (YPG) as terrorists.  President Recep Tayyip Erdogan has spoken angrily about American support for the group and vowed to crush it.  Mr Trump's comments on Sunday followed further criticism of his abrupt decision to withdraw US forces from Syria.  A senior figure in Saudi Arabia's royal family, Prince Turki al-Faisal, told the BBC it would have a "negative impact" that would benefit Iran, Russia and Syria's President Bashar al-Assad.  US Secretary of State Mike Pompeo is currently in the Saudi capital Riyadh as he tours the Middle East to reassure US allies in the region.  The president defended his decision to withdraw troops, saying any remaining IS fighters could be attacked from the air.  He did not say how Turkey's economy would suffer if it attacked the YPG.  The US imposed sanctions and trade tariffs on Turkey in August, amid a row over a detained US pastor - contributing to a sharp drop in the value of the Turkish lira. Pastor Andrew Brunson was released in October.  Mr Trump also mentioned the creation of a "20-mile safe zone", which the BBC's Barbara Plett Usher says hints at the kind of solution Mr Pompeo is trying to negotiate.  The president also said that Russia, Iran and Syria had been the biggest beneficiaries of US action in Syria and it was time to bring American soldiers home.  President Erdogan's spokesman Ibrahim Kalin responded in a tweet, saying Turkey expected the US to "honour our strategic partnership".  "Terrorists can't be your partners and allies," he said.  President Trump shocked allies and faced strong criticism at home last month when he ordered US forces to immediately begin withdrawing from the approximately 30% of Syria controlled by the YPG-led Syrian Democratic Forces (SDF) alliance.  The US military began its pullout last week by withdrawing some military equipment from Syria, although its troops remained in the country.  Over the weekend, Mr Pompeo said he had spoken to Turkish Foreign Minister Mevlut Cavusoglu by phone and was "optimistic" that an agreement could be reached with Turkey to protect Kurdish fighters. He did not give details.  Speaking in Abu Dhabi, Mr Pompeo said the US recognised "the Turkish people's right and Mr Erdogan's right to defend their country from terrorists".  "We also know that those fighting alongside us for all this time deserve to be protected as well," he added.  In Riyadh, the secretary of state is expected to discuss Iran and the conflicts in Yemen and Syria, US media report, as well as seeking an update on the investigation into the murder of journalist Jamal Khashoggi.  Mr Khashoggi, a critic of Saudi Arabia's rulers, was murdered at the Saudi consulate in Istanbul three months ago.  About 2,000 US military personnel are reported to be deployed in northern Syria.  Ground troops first arrived in autumn 2015 when then-President Barack Obama sent in a small number of special forces to train and advise YPG fighters.  The US did this after several attempts at training and arming Syrian Arab rebel groups to battle IS militants descended into chaos.  Over the intervening years the number of US troops in Syria has increased, and a network of bases and airfields has been established in an arc across the north-eastern part of the country.


bbc--2019-02-01--US economy adds 304000 jobs in January

US economy adds 304,000 jobs in January

The US economy added a stronger-than-expected 304,000 jobs in January, official figures have shown.  The figure was far in excess of economists' forecasts of 165,000.  However, December's jobs growth figure was revised to 222,000, down from an initial estimate of 312,000.  Last month saw jobs being added in leisure and hospitality, construction, health care, transportation and warehousing, according to the US Department of Labor.  The widespread gains marked the 100th month in a row of hiring.  They were a reminder of the economy's continued strength, despite rising concerns about factors such as slowing global growth, trade tensions, and recent dips in consumer confidence.  "This is a solid report, particularly given how worried people were," said Gus Faucher, chief economist at PNC Bank.  The unemployment rate in January ticked up from 3.9% to 4% - a gain the Labor Department said was due to the partial shutdown of the federal government.  The shutdown was also likely to have contributed to a surge in part-time workers last month, the Labor Department said.  Overall, however, job creation in the US remains healthy - and well above the roughly 100,000 additions per month need to keep pace with growth in the working-age population.  US employers added an average of 223,000 jobs per month in 2018.  Separate surveys have also found more job openings than unemployed.  "A lot of businesses feel like they do need to find workers and they have felt that way for months," Mr Faucher said.  "We have consumers spending, we have businesses investing, so the demand is there."  The Federal Reserve this week pledged to be "patient" about further rate rises, noting that inflation pressures remain muted.  But the tight labour market has started to translate into higher wages.  The average hourly pay for private sector workers was $27.56 last month, up 3.2% year-on-year.  That was slightly slower than December's 3.3% rise. But it still marked one of the strongest year-on-year increases for any month since the financial crisis.  Analysts said January's gains do not put immediate pressure on the bank to raise rates.  But several economists said the bank is likely to increase rates later in 2019, if trends continue.  "This is a strong report, showing that labour demand continues to rise rapidly, and that wage gains continue to grind higher," said Ian Shepherdson, chief economist of Pantheon Macroeconomics.  "If wage gains rise over the next year as much they have over the past year ... the idea that the Fed won't hike further will turn to dust."


bbc--2019-02-14--German economy narrowly avoids recession

Germany's economy just about avoided falling into recession during the final three months of last year.  Europe's largest economy registered zero growth during the fourth quarter of 2018, the country's Federal Statistics Office said.  That means it avoided two consecutive quarters of contraction, which is the usual definition of a recession.  A weak trade performance dragged on the economy, and consumer spending remained subdued.  The zero growth recorded in the October-to-December period followed a 0.2% contraction in the previous quarter.  Reasons for slower growth last year include a slowdown in the global economy and a weaker car sector, with German consumers less willing to buy new cars amid confusion over new emission standards.  In addition, low water levels, particularly in the Rhine, affected growth by holding back movement of some goods.  Jack Allen, senior Europe economist at Capital Economics, told the BBC: "If you look at Germany across 2018 we've seen a pretty broad-based slowdown in growth. We've seen household consumption slow, we've seen business investment slow and we've seen export growth slow.  He added: "What's particularly worrying is that the early signs for 2019 suggest that a strong rebound is unlikely."  US tariffs on EU car exports, which US President Donald Trump has threatened, could have a major impact on Germany, Mr Allen said, but even if these are avoided the slowdown in the global economy means Germany is still only expected to grow by about 1% this year, compared with about 1.5% in 2018.  However, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said he was "optimistic" that the first quarter of this year would be better.  "The January [economic] surveys were poor... but net exports won't be in free fall forever, and consumers' spending also ought to pick up."  It couldn't have been much closer. And it is certainly possible that subsequent revisions to these figures will take the fourth quarter figure below zero and Germany into recession as the term is often defined.  For now though it looks like a very soft patch that has affected much of Europe.  Italy had a recession at the end of last year. The eurozone as whole has managed to continue to grow in spite of the weakening performance of two its largest economies. But it has been markedly slower.  That said, the jobs situation specifically in Germany is pretty good. Unemployment is among the lowest in the world at just above 3%.


bbc--2019-05-30--Brazil economy contracts for the first time since 2016

Brazil's economy shrank in the first three months of the year for the first time since 2016, when the country was in recession.  It contracted by 0.2% compared with the last three months of 2018. Compared with a year ago, it grew by 0.5%.  The fall comes at time when Brazil's president Jair Bolsonaro is facing scrutiny of his efforts to revive the economy after a two-year recession.  Economists said there was a risk of another recession.  If the economy shrinks again the second quarter, the country, once regarded as having huge growth potential, will be in recession again.  That would come barely three years after the two-year recession in 2015 and 2016, when the economy shrank by almost 7%.  William Jackson, chief emerging markets economist at Capital Economics, said that while the contraction in the economy was, in part, the result of temporary factors, there were early signs that growth in the second quarter had also been weak.  "There is now a real risk that the economy will slip into a technical recession," Mr Jackson said.  The county was once designated as one of the Brics - which along with Russia, India, China and South Africa could outpace developed economies by 2050.  While the contraction was in line with expectations it is an early indication of economic performance since Mr Bolsonaro took power in January and appointed businessman Paulo Guedes as "super-minister" of the economy.  When Jair Bolsonaro was elected, Brazil's stock market and currency both bounced up - showing just how confident markets were in the new government.  Mr Bolsonaro had given carte blanche to his economy minister, businessman Paulo Guedes, to act on reforms.  Almost five months later there is much disappointment with the government and with the economy.  Mr Guedes has been the target of friendly fire: attacks from other ministers, resistance in Congress from Mr Bolsonaro's own party and even calls for state intervention coming from the president himself.  He has also repeatedly threatened to leave the government if he doesn't get his way with Congress.  Markets now believe Brazil will only start to show any significant growth next year.  In the first three months of the year there was a drop investment and a decline industrial and agricultural output.  There was also a 1.9% slump in exports which was, Mr Jackson said, in part, related to lower metals exports.  "This appears to be due to cuts in iron ore output following the Brumadinho dam tragedy," he said.  Brazil's worst mining disaster was caused when the embankment tailings dam in Brumadinho broke, leaving hundreds dead.  It is owned by Vale, the world's biggest producer of iron ore.  Mr Jackson expects the cut in iron ore production to only have a one-off impact on Brazil's economy and expects growth in the second quarter.  Even so, he said there was "growing risk" of another contraction because of weakening sentiment in April and May.  Isabela Guarino, chief economist at XP Asset Management in Sao Paulo, also expects growth in the second quarter but said: "There is a very real risk of contraction, which would take the country into a technical recession.  "It's not our base case, but it's a rising risk".


bbc--2019-06-20--US economy under Trump Is it the greatest in history

US economy under Trump: Is it the greatest in history?

Claim: President Trump says the US economy is perhaps the greatest it's ever been.  He launched his 2020 re-election campaign at a rally in Florida with the familiar claim about the success of the economy under his administration.  According to the Washington Post last year, the president has made the claim - or a variant of it - dozens of times.  Reality Check verdict: Yes, the economy has been doing well - but there have been periods when it was even stronger.  There are some indicators that are less good - and fears over the consequences of a trade war with China have unsettled financial markets.  The growth in GDP - the value of goods and services in the economy - has generally been strong.  The most recent data shows a 3.1% growth for the first quarter of 2019.  This is lower than the 2018 peak of 4.2% (second quarter), which has been the highest level achieved during President Trump's administration.  This is, however, less than the 5.1% achieved in the second quarter of 2014, during the Obama presidency.  And there were times in the 1950s and 1960s when GDP growth was even higher.  "If you choose to look at the health of the economy based on GDP, Mr Trump's claims are suspect when compared to the national economic boom of the post-War years," says Megan Black, assistant professor of history at the London School of Economics.  "The post-War era saw tremendous economic growth, most notably in manufacturing, but also in agriculture, transportation, trade, finance, real estate and mining."  So, the growth indicators currently are good - but not the best ever.  President Trump has highlighted the rising value of US financial markets - in particular the Dow Jones Industrial Average, which follows the shares of 30 major US companies.  It's true the Dow reached record highs under his administration. Mr Trump's supporters argue that his corporation tax cuts along with his US-focused policies, his clampdown on bureaucracy and his promises of infrastructure investment have all helped.  However, in recent months, the index has been highly volatile.  In December 2018, it recorded its biggest weekly drop in percentage terms since 2008.  The sharp fall was attributed to trade tensions with China, interest rate increases and a looming government shutdown that worried the markets.  So, what's happening in the broader economy with employment and wages?  The unemployment rate in May stood at 3.6% - the lowest since 1969.  It's been falling for some years - a downward trend that began during president Barack Obama's time in office.  Ryan Sweet of Moody's Analytics points to the changing profile of the US working population as a key factor here.  There is now a greater proportion of older workers and better educated workers, both of which tend to have lower unemployment rates.  Mr Trump has also highlighted record low levels of African-American unemployment in particular.  He's right in that in May 2018, unemployment for black Americans fell to 5.9%, the lowest figure since the 1970s.  But it increased to 7% in February this year and is currently 6.2%.  Some US media reporting at the time highlighted some important caveats:  And the president's daughter, Ivanka, has tweeted that the unemployment rate for women was at a 65-year low.  Again, that had begun to fall prior to Mr Trump taking office.  As for wages, average hourly earnings growth throughout 2017 was between 2.5% and 2.9% - continuing a generally upward trend which began during President Obama's administration.  This year, wages continued to rise and reached 3.4% in February before slowing slightly.  They are currently rising faster than the rate of inflation, which was 1.8% in May 2019, which means real incomes are rising.  A final measure worth looking at is household income.  Real median household income has been growing for the past three years - but the rate of growth has slowed, according to official figures.  And in September 2018, the US Census Bureau questioned whether its own figure for 2017 - a record high of $61,372 per annum- was that high due to differences in the way surveys had been conducted in previous years.  It's true that the fiscal stimulus, tax cuts and federal government spending rises under President Trump have helped to provide an impetus to growth - even if by some indicators, not everyone may be feeling the benefits.


bbc--2019-07-21--Is Zimbabwes economy on track

Is Zimbabwe's economy on track?

Zimbabwe has not had its own independent currency since hyperinflation wiped it out a decade ago.  Instead it has relied on the US dollar along with a local money system pegged to the dollar.  The economy is no longer in its extreme inflationary spiral, but the country has continued to suffer from severe shortages of food, medicine and fuel.  Last month, the Zimbabwean authorities reintroduced the Zimbabwean dollar as the country's sole legal tender.  Foreign Minister Sibusiso Moyo says this move has stabilised the economy.  But is he right? Reality Check looks at the country's key economic indicators before and after the currency was reintroduced.  There has been understandable concern that the return of the Zimbabwe dollar would lead to a return to the chaotic hyperinflation which destroyed savings and made wages worthless.  The most recent figures suggest inflation has risen sharply over the last year. In May it was 98% and by June, annual inflation stood at 176%.  This is nowhere near the spiralling inflation levels of a decade ago, but the trend has not been encouraging.  So the introduction of the new currency comes at a sensitive time.  There's also debate about whether the official number accurately captures the increase in goods on shop floors and at petrol stations, for instance.  Leading economists say it's likely the cost of living is higher than official figures indicate.  Since the introduction of the new currency on 24 June, it has fallen against the US dollar.  This benefits Zimbabwe's agricultural exports, mainly its tobacco sector.  But any positive effects are likely to be outweighed by more expensive imports, leading to further inflationary pressures on the economy.  The weaker currency is likely to have an impact across the economy, as importers struggle to get access to foreign exchange such as the US dollar in order to buy goods from abroad.  Taking a longer term view, the government has reduced spending since October last year and is now running a budget surplus, which it says is an indication of an improving economy.  Independent economists are sceptical about these numbers.  Public sector workers in Zimbabwe are paid in local currency and there are fears that because of its decline against the US dollar, and because of inflation, they are now, in effect, earning less.  Zimbabwe's main public sector workers' union, Apex Council, said in a petition that the value of earnings has fallen "from at least $475 to a mere $47 currently for the lowest paid civil servant" since October last year.  Last week Cecilia Alexander, Apex Council chairwoman, said the government's austerity plans had left workers mired in poverty.  Unions have, however, agreed a one-off payment of 400 Zimbabwean dollars ($45) to every worker in July, while talks on pay continue.


bbc--2019-07-31--Does the US economy need a boost

Does the US economy need a boost?

The US central bank, the Federal Reserve, is expected on Wednesday to cut rates for the first time since 2008.  Supporters say it will spur a US economy showing signs of needing help.  Critics argue that a rate cut will not help and that the Fed will be pandering to President Donald Trump, who is demanding a big cut.  Inflation is lower than policymakers would like in the US, languishing at about 1.6% in June. The Fed targets 2%.  Concerns about the US and global economy will also weigh on rate-setters' minds.  Last week, the IMF cut its growth forecasts for the global economy for this year and next. US growth registered at an anaemic annual rate of 2.1% between April and June.  US manufacturing, about a tenth of the economy, is the main sector under pressure. It slowed to a low of almost three years last month.  Unemployment hit a 49-year low in May and was at 3.7% last month.  But many of those jobs are in the service sector and are low-paying with low hours, says Megan Greene, an economist and senior fellow at the Harvard Kennedy School.  Often, low unemployment pushes wages up, and with more wages chasing the same products comes the inflation the Fed is looking for. But because the wages of the people being hired are low, that isn't happening. There is also the matter of the trade war with China, which threatens the world's economy.  "None of this will be fixed" by a small rate cut, Megan Greene says.  "I think they will cut rates," said former vice-chairman of the Federal Reserve, Donald Kohn, "and I think there are good reasons for doing that."  While the economy "looks pretty good" and unemployment is low, "I think there are some downside risks to growth, and inflation is running low so it's a good time to take out some insurance," he told the BBC's Today programme.  Cutting rates makes borrowing cheaper for businesses and consumers, and can lead to asset price inflation, or bubbles as that's known.  Mr Kohn says the banking system is much stronger since the last crisis in 2007-9, which should lessen the risk of a similar crash.  One area to watch is corporate debt, which has been growing, he says. US corporate debt, excluding lenders', stands at about $10tn (£8.23tn), up about a half from the crisis.  However, when rates were at close to zero for the seven years after the crisis, it didn't spur much growth, said Ms Greene, leaving one to wonder what a 0.25 percentage point dent will do this time.  Finally, what if it doesn't work? When another true crisis arrives, the central bank will want to cut rates again to stimulate growth and bolster business confidence.  "If it doesn't do much - and I don't think it will - there's a risk of people not thinking it will work again."  No. On Tuesday President Trump called on the Federal Reserve to make a large interest rate cut, interpreted as larger than the expected 0.25.  "I'm very disappointed in the Fed. I think they acted too quickly by far, and I think I've been proven right," Mr Trump said. "The Fed is often wrong,"


bbcuk--2019-03-12--UK economy stalls despite strong January

The UK economy grew by 0.2% in the three months to January, matching the growth of the previous three months.  The report from the Office for National Statistics (ONS) showed a pick-up in activity in January when the economy expanded by 0.5%.  The ONS said strength in IT, health services and wholesale trading offset falls in the manufacturing of metals and cars, and construction repair work.  The increase in wholesale could indicate stockpiling ahead of Brexit.  However, the ONS was unable to comment on whether the rise was linked to UK manufacturers stockpiling.  The services sector, which accounts for about 80% of the private sector economy, grew by 0.3% in January after a 0.2% fall in December.  The rolling three-month growth in the services sector was 0.5%, mainly driven by wholesale and retail trade.  Construction, which accounts for about 6% of the economy, reversed its fall in December to grow by 2.8% in January.  The uncomfortable truth is that the economy has lost speed. Growth of 0.2% across three months is a fraction of what the UK typically achieves.  Brexit uncertainty appears to have hammered business investment, while growth in the Eurozone has fallen way short of expectations.  Although the economy expanded by 0.5% in January alone, even the number crunchers who calculate these monthly estimates admit that they're volatile and need cautious treatment.  And January's rebound was driven by manufacturing and construction.  But surveys suggest recent industrial activity has been driven by speeding up production of finished goods ahead of Brexit rather than new orders; though the ONS numbers don't distinguish between these.  And the rebound follows very weak months for manufacturing and construction - output across the last three months in both was flat.  Total growth across the last three months was driven by services - in particular the wholesale retailing, again hinting at stockbuilding.  The "fog of Brexit" may have actually inflated activity of late. Beyond that, growth is at best sluggish.  Yael Selfin, chief economist at KPMG said the figures confirmed growth momentum in the UK economy had "stalled".  "The first glimpse of GDP data for this year points to a UK economy hovering well below its growth potential, as we wait for the Brexit fog to dissipate.  Ms Selfin said she expected growth to "remain subdued in the short-term".  However, Andrew Wishart, UK economist with Capital Economics, said the numbers provided some reassurance that the UK economy is weathering a political crisis at home and a slowdown overseas "pretty well".  He said there was "little evidence" of stockbuilding, with output in the transport and storage sector falling in January and the three-month growth in imports easing off.  "Of course, the data may deteriorate in February and March if Brexit has caused consumers and firms to reach for the handbrake," he added.


bbcuk--2019-07-21--Stormonts Department for the Economy needs extra 236m

Stormont's Department for the Economy 'needs extra £23.6m'

Stormont's Department for the Economy has said it is facing a challenging financial position and needs an extra £23.6m.  The details are contained in the department's draft business plan for 2019/20.  Stormont departments bid for extra funds in reallocation exercises known as monitoring rounds.  The department said if does not get the extra money it will "result in further financial pressures."  The Northern Ireland budget, announced in February, saw an overall real increase of 2% for day-to-day departmental spending.  However, that increase is not evenly spread across departments.  Health, the largest department, got a 3.8% uplift compared to the position at the end of 2018-19, while other departments saw their budget flat or falling in real terms.  The Department for the Economy said its £776.6m allocation is effectively the same as last year.  The department is responsible for economic development, third-level education and skills.  In a foreword to the business plan the department's senior civil servant, Noel Lavery, said the lack of a devolved government was "uniquely challenging."  "We know there are things which we want to do but which will properly require ministerial agreement.  "However, that will not stop us from undertaking necessary preparatory work."  That work will include drawing up a draft energy strategy and a draft tourism strategy.  An existing industrial strategy that has not been implemented will also be reviewed.  The business plan also said that the department will continue to prioritise resources towards preparations for Brexit.


abcnews--2019-12-06--US jobs data to give clues to economy amid trade uncertainty

Friday’s November jobs report will provide insight into whether steady hiring remains a source of strength for the U.S. economy even as the Trump administration’s trade conflicts have heightened uncertainties for employers.  Economists have forecast that the government will report that employers remained confident enough to add a solid 187,000 jobs, according to data provider FactSet. The unemployment rate is expected to remain 3.6%, near a half-century low.  Steady job growth tends to reassure consumers that the economy is expanding and that their jobs and incomes remain secure, which, in turn, typically helps fuel spending. Consumer spending has become an even more important driver of growth because the Trump trade conflicts have reduced exports and led many businesses to cut spending.  Renewed concerns that trade will continue to hamper the U.S. economy drove stock prices lower earlier this week, after President Donald Trump said he was willing to wait until after the 2020 elections to strike a preliminary trade agreement with China. With the two sides still haggling, the administration is set to impose 15% tariffs on an additional $160 billion of Chinese imports beginning Dec. 15.  Both sides have since suggested that the negotiations are making progress, but there is still no sign of a resolution.  Hiring in the United States has remained mostly healthy this year despite the trade war. Even so, Trump’s combative use of import taxes, combined with retaliatory tariffs by China and Europe, has stalled job growth in manufacturing.  Employers have added 176,000 jobs, on average, in the past three months. That’s enough to absorb new job seekers as a result of population growth and to potentially lower the unemployment rate. Still, the monthly average job growth is down from an average of 223,000 last year.  Some temporary factors could distort November’s jobs data. An autoworkers’ strike at General Motors that ended in October artificially lowered that month’s job gain by about 41,000 to 128,000. Likewise, the return of those employees to work should increase November’s job gain by roughly the same amount.  Many economists also expect that unseasonably cold weather in November might have slowed hiring in weather-sensitive industries, principally construction and restaurants and hotels.  And the holiday shopping season has begun later this year compared with previous years, a fact that some economists think might have delayed hiring by retailers and shipping firms last month.  With tariffs hobbling manufacturing, the jobs report will also likely underscore a bifurcation of the job market: Service industries — finance, engineering, health care and the like — are hiring at a solid pace, while manufacturers, miners and builders are posting weak numbers.  Joe Brusuelas, chief economist at RSM, a tax advisory and consulting firm, notes that services companies have added 1.4 million jobs this year, compared with just 2,000 for manufacturing.  Despite the raging trade tensions, most analysts say they remain hopeful about the economy and the job market. The economy grew at a 2.1% annual rate in the July-September quarter, and the annual pace is thought to be slowing to roughly 1.5% to 2% in the final three months of the year — sluggish but far from recessionary.  Consumer confidence has slipped in recent months but remains at a decent level, helping boost sales of expensive purchases, such as autos and appliances.  With inflation surprisingly low, the Federal Reserve has cut its benchmark short-term interest rate three times this year. Those rate cuts have helped support the housing market. Sales of existing homes have risen nearly 5% in the past year. Sales of new homes have soared by one-third.


businessinsider--2019-06-18--Trumps trade wars are putting the US economy at risk But the Federal Reserve doesnt appear ready

Trump's trade wars are putting the US economy at risk. But the Federal Reserve doesn't appear ready to step in just yet.

The Federal Reserve is expected to leave borrowing costs unchanged Wednesday at the end of a two-day policy meeting, even as President Donald Trump continues to call on officials to lower them.  The president has renewed pressure on the Fed in recent months as his trade disputes threaten to hurt the economy ahead of the 2020 elections. Trump increased tariff rates on Chinese imports last month and began preparing to target a broader range of products.  Fed Chairman Jerome Powell signaled last month that officials were ready to act on escalating trade tensions, but most economists and investors see the benchmark interest rate remaining at a target range of between 2.25% and 2.5% this month.  "It remains to be seen whether US growth will fall below potential in the back half of the year because of the trade war and related uncertainty," economists at Goldman Sachs wrote in a research note. "In our view, not enough has changed to warrant a clear signal of an upcoming cut."  Economists and industry groups have warned that tariffs act as a tax on American businesses and consumers and delay investment. Against a backdrop of a slowdown in hiring in May and stubbornly low inflation readings, expectations for the Fed to cut rates by the end of the year have increased dramatically.  But economists say other growth data remains solid, particularly with significant upward revisions to the April retail sales report. Powell has separately stressed that he expects price changes to pick up in the future.  SEE ALSO: The White House is said to be vetting Judy Shelton for a seat on the Fed board. She told us what she would bring to a central bank whose policies she has long criticized.  "While recent economic readings are not on the surface dire enough by themselves to justify a rate cut, the Fed may consider implementing a rate cut as 'insurance' against slower growth, particularly in light of ongoing trade policy uncertainty," said Jason Pride, the chief investment officer of private wealth for Glenmede.  The Fed operates independent of political interests, but that hasn't kept Trump from pushing policies that would be expected to boost growth. The president has repeatedly called on the central bank to slash interest rates and attempted to fill its policymaking board with political allies.  The Federal Open Market Committee last increased the benchmark interest rate by a quarter percentage point in December.  A bonus just for you: Click here to claim 30 days of access to Business Insider PRIME


businessinsider--2019-12-19--Even after Trump's trade deal, China tariffs will cost the American economy $316 billion by the end

Even after Trump's trade deal, China tariffs will cost the American economy $316 billion by the end of 2020

• With the vast majority of punitive tariffs still in place and uncertainty about what might happen next, the dispute is likely to continue to take a toll on the largest economies.Â • An analysis by Bloomberg Economics found that in 2019 dollar terms, losses translate to $134 billion in lost GDP. • By the end of next year, those costs are expected to jump to $316 billion.Â  Businesses and investors have welcomed the interim trade agreement President Donald Trump announced with China after more than a year of turbulent attempts to defuse tensions between the two sides.Â  But with the vast majority of punitive tariffs still in place and uncertainty about what might happen next, the dispute is likely to continue to take a toll on the largest economies.Â  In this year alone, economists estimate those costs could chip away at 0.3% to 0.7% of gross domestic product. An analysis by Bloomberg Economics found that in 2019 dollar terms, losses translate to $134 billion in lost GDP. By the end of next year, those costs are expected to jump to $316 billion.Â  That would more than offset any potential gains the Trump administration said would come from the agreement. It included unconfirmed purchases of American goods, stricter rules around trade secrets and unspecified pledges on technology transfers.  The so-called phase one deal lowered the tariff rate to 7.5% from 15% on Chinese products that were hit in September, which were valued at about $120 billion in 2017, and stalled the threat of further escalation. Yet a much steeper 25% tariff remains on roughly $250 billion worth of imports, including machinery and electronics.  "The 'phase one' trade deal leaves most of the tariffs in place," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. "These are welcome developments for retailers, wholesalers and importers of consumer goods, but they offer no relief for manufacturers, so we expect only a very modest bounce in the business surveys as a result of the deal."  According to the anti-tariff advocacy group Americans for Free Trade, about 83% of the costs from the US-China trade dispute are still in effect. Independent researchers from the New York Federal Reserve, Princeton and Columbia estimated those tariffs would continue to cost roughly $831 per household this year.Â  In addition to higher costs, businesses could also struggle to make plans as a result of the protracted trade dispute. Signs of stalled investment have become increasingly evident in sectors highly dependent on international businesses.Â


cbsnews--2019-08-21--The Fed says trade is main reason US economy is slowing

The Fed says trade is main reason U.S. economy is slowing

As President Donald Trump doubles down on his theory that the Federal Reserve is the main reason the U.S. economy is slowing, Fed policymakers are starting to push back.  In a series of tweets, Mr. Trump again attacked the U.S. central bank and its chairman, Jerome Powell, for not cutting interest rates enough, which the president maintains is stifling economic growth.  But in notes from their July meeting, which were released on Wednesday, Fed policy makers repeatedly cited the Trump administration's growing trade war with China and other countries as the primary reason the U.S. economy is at risk.  Fed officials also said trade uncertainties were an important factor in the recent drop in fixed business investment in the U.S., a key factor that Mr. Trump and his economic advisers have pointed to as evidence that the economy is stronger now than under President Obama.  The Fed's account doesn't mention Mr. Trump directly. But the word trade shows up 32 times in the minutes, though not all of it is negative. A number of times the Fed notes that an easing of tensions between the U.S. and China in July had helped the economy. In early August, Mr. Trump signaled that he would levy new tariffs on China, though the president has since delayed when those tariffs would go into affect.  Business investment has been a key measure for Mr. Trump and his advisers in arguing that the economy has sharply accelerated under his watch and that the massive tax cut he enacted in late 2017 were a success. Last summer, the president noted that business investment was rising at an annual rate of 9%, which he described as a "tremendous increase" that hadn't been seen in "many, many years--decades."  Business investment can be important for future economic growth, but its impact is less clear when it comes to forecasting a recession. Consumer spending makes up 70% of economic activity. And in an asset-light, high-tech, information-driven economy, traditional business capital spending perhaps matters less than it used to. But business investment can be useful as an indicator of corporate America's economic mood.  Either way, last year's business investment increase has been less sustainable than Mr. Trump predicted—hurt, at least in the Fed's view, by U.S. and global trade tensions. The annual rate of growth of business investment has shrunk to 1.4%, from the 9% Trump cited a year ago. On top of that, the New York Times noted on Wednesday that business fixed investment is now running below what the CBO forecast in April 2018, and has been since last fall.


cnn--2019-05-05--Trump steps on his economy wins with renewed China trade threat

Trump warned Sunday that he would lift tariffs Friday on a bundle of Chinese goods to 25% from the current 10% threshold, reactivating a threat he removed months ago just as it appears the two economic superpowers are on their way to a deal. He also warned he would tax nearly all of Chinese exports to the United States.  Trump appeared to be reviving an old playbook by threatening to ratchet up tariffs on Beijing in the hopes of applying additional pressure on China to force negotiators to strike a deal as early as this week. Earlier this year, Trump said he was prepared to enact new sanctions, and increase existing ones, if a deal wasn't struck by a hard deadline of March 1, but indefinitely shelved those plans.  The President's renewed tariff threat alarmed investors Sunday, sending stock futures down. The Dow was down more than 400 points Sunday evening, while the Nasdaq was down more than 100 points.  Chinese negotiators led by Vice Premier Liu He are scheduled to arrive in Washington on Wednesday with a very large delegation, the latest signal that two sides may be nearing the end stage of a comprehensive trade deal that will end a trade impasse that has rattled Wall Street.  The fresh comments by the President on Twitter came just days after he expressed cautious optimism over the possibility of brokering a possible trade deal with China soon. The White House has set its sights on wrapping up trade talks by the end of the month. "The deal itself is going along pretty well," Trump told reporters in the Oval Office on Friday. "I would even say very well, we'll see what happens over the next couple of weeks. We're getting close to a very historic, monumental deal and if it doesn't happen, we'll be fine too, maybe even better." Treasury Secretary Steven Mnuchin last week said the two countries had "productive meetings" in Beijing with his negotiating counterpart Robert Lighthizer, the US Trade Representative, and that those conversations with continue this week. Chairman of the Council of Economic Advisers Kevin Hassett also boasted in an interview with CNN's Poppy Harlow on Friday, "The proof will be in the pudding if the China deal is closed soon. What I'm seeing is it's going to be a big positive for the economy." But Trump said in a tweet Sunday that talks between Washington and Beijing were moving "too slowly" and blamed the Chinese for attempting to renegotiate the deal. "For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump said. "These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billion Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%." It remains unclear how the Chinese will respond to the new threat and Beijing has tried to bypass additional penalties given the harm its brought to its economy. Such pressure by the Trump administration on trade talks, however, has often sparked tumult on Wall Street with major selloffs over jitters the trade war would be long lasting. But investors more recently have been cautiously optimistic the two sides can strike a deal. The economy is booming, but Donald Trump can't stop talking about Russia Trump's comments could rattle markets on Monday after the stock market has been in full swing following surprising first quarter GDP growth and a strong April jobs report. China has already become an issue in the 2020 campaign, with former Vice President Joe Biden sparking controversy last week when he suggested that China is not a threat to the US. On Sunday, Senate Minority Leader Chuck Schumer tweeted : "Hang tough on China, President @realDonaldTrump. Don't back down. Strength is the only way to win with China." Coming into talks this week, business leaders appeared to be mostly optimistic that talks were near completion with a number of critical issues left to be ironed out, including whether the two countries would agree to remove billions of dollars of tariffs that have been imposed over the past year. "These negotiations have been picking up steam in the last few weeks," said Myron Brilliant, executive vice president and head of international affairs for the US Chamber of Commerce, to reporters Thursday on a call. "We are certainly in the end game of these negotiations. We have a critical window before us." Both sides have put forth creative solutions to remove tariffs as part of a final deal, but ultimately, that call will need to be made between the two presidents, he said. The Trump administration has been reluctant both privately and publicly to remove tariffs on China as a way to provide leverage that Beijing will keep its promises as part of any negotiation.


dailymail--2019-09-14--US-China trade deal would pull economy back from the tipping point say Deutsche Bank analysts

A thawing in the trade war with China could pull the U.S. economy back from the 'tipping point' of possible recession, according to analysts with Deutsche Bank.  Earlier this week, both sides took conciliatory measures, with President Donald Trump delaying a tariff increase on certain Chinese goods out of respect for the 70th anniversary of the Chinese government's founding.  Beijing reciprocated on Friday by exempting some U.S. agricultural products from retaliatory tariffs, including soybeans and pork.  Lower-level U.S. and Chinese officials are expected to meet next week in Washington before talks between senior trade negotiators in early October.  Trump said on Thursday he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact.  'With these steps engendering reduced uncertainty, the economy should be able to regain its footing,' wrote Deutsche Bank economists in the research note, according to Fox Business.  The economists said that recent softening in key U.S. economic indicators would likely prompt Trump to be more amenable to a deal with China.  'The economy is showing greater sensitivity to this turmoil, with leading indicators for manufacturing sentiment and capex sending dire signals and accumulating evidence of spillovers to the broader labor market and services sector,' the economists said.  The jobs report for August missed expectations, with 130,000 new non-farm payroll jobs.  As well, the U.S. manufacturing sector contracted in August for the first time in three years, according to the Institute for Supply Management.  However, consumer spending remains strong, with reports this week showing solid U.S. retail sales and a measure of U.S. consumer sentiment above expectations.  The Federal Reserve was still widely expected to cut rates at its policy meeting on Wednesday.  All three major stock indices ended the week up on Friday, with investors taking heart at easing trade tensions.  'We've had these small concessions back and forth, which at minimum gives investors some confidence that things are moving in the right direction,' said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.  'I don't think the Chinese are going to roll over on trade but they recognize there is a mutual benefit to keep the U.S. from escalating the trade war.'  Avoiding a recession is key to Trump's reelection strategy in 2020.  Since World War I, the sitting president has always been reelected if the economy avoided recession for the two years prior to to the election, according to Ryan Detrick of LPL.  Sitting presidents who presided over recession ahead of the election lost five out of seven times, he said.


fortruss--2019-08-29--Putins Take on the US-China Trade War and Prospects of Russias Economy VIDEO

Putin’s Take on the US-China Trade War and Prospects of Russia’s Economy (VIDEO)

MOSCOW – Will the American-Chinese fight hit Russia and is Russia ready to repel this blow? As Russian President Vladimir Putin put it, Russia, although a military superpower, isn’t quite yet ready to get into the big fight with such economic giants like China and the United States. He explained this by quoting an ancient Chinese proverb:  Putin, known for his humorous stunts, caused widespread laughter among the audience, but at the same time, he honestly outlined what would be Russia’s stance when it comes to picking sides in this fight, thus confirming that, despite the West trying to portray it as Beijing’s junior partner, Russia has its own way and that the country’s interests come first. Of course, as stated many times before, Russia will continue close cooperation with anyone willing to do so, as the example of Turkey has shown recently.


hitandrun--2019-01-04--Trumps Trade War Is Harming the Craft Booze Businessand Dragging Down the Rest of the Economy in t

Trump's Trade War Is Harming the Craft Booze Business—and Dragging Down the Rest of the Economy in the Process

For most Americans, trade policy has a tendency to seem abstract, even invisible. Price tags on store shelves don't break out the cost of tariffs. When a company affected by tariffs sheds staff or fails to expand, there are often additional factors at play. Trade agreements themselves tend to be mind-numbing in their complexity, the sort of legalistic documents that only experts ever really read, and arguments about free trade are often heavy on theory or built around dull statistics. Economic policy counterfactuals are inherently speculative; with different trade policies in place, who's to say what would have happened?  And yet it's clear that the trade war Trump started with Europe is having a measurable impact—on, among other things, domestic craft liquor.  After the Trump administration erected tariffs on imported steel and aluminum, the European Union responded by creating new tariffs on goods produced in America, such as bourbon and rye whiskey. As a result, some domestic liquor producers have largely been cut off from the European market. Among those affected is Catoctin Creek, a small Virginia distiller that makes rye, gin, and high-quality fruit brandy.  As The Washington Post reports, Catoctin Creek was set to expand in Europe, where the market for American whiskey has grown considerably over the last 15 years. Instead, the tariffs have killed off nearly all of the company's European sales opportunities. The company has instituted a hiring freeze, delayed plans to buy new distilling equipment, and slowed orders from the farmers who supply the grains required for making whiskey. "It's essentially decimated our European business, and it's put our expansion on hold," Scott Harris, one of Catoctin Creek's co-founders, tells the Post.  Catoctin Creek's story shows how the trade war harms everyone involved in the process. It's the entire trouble with the trade war in miniature. It's bad for the owners, who have lost access to a market with a lot of potential for growth. It's bad for consumers in Europe, who lose access to the product. It's bad for for consumers in the U.S., who are likely to face higher prices—on top of already high prices caused by recent increases in demand for whiskey—as Catoctin looks up to make for the loss of expected revenue from European sales. It's bad for people who drink and design cocktails, because it makes interesting ingredients more difficult to obtain.  It's bad for the manufacturer that makes the stills Catoctin Creek might have purchased to help increase production for the global market. It's bad for the farmers who grow the rye and other grains the company uses to make its product. And just as the people and companies who do business with Catoctin Creek were affected, so will the people and companies who do business with those companies, and so on and so forth, in an ever-expanding spiral of economic decline. A trade war drags down everything it touches. It produces no winners.  On a day-to-day basis, these effects are hard for most people to see: Even if you're a regular consumer of Catoctin Creek liquor,* you probably won't notice a huge price difference unless you buy in bulk. If you live in Europe, it's likely you never had regular access to their product in the first place. And the company doesn't appear to be laying anyone off, so it's hard to count the jobs that simply were never created.  On the surface, the trade war may not look like it's doing much damage. But it is, and even if its effects are hard to see, we shouldn't forget what it's costing us.  *If you like good booze, you should be. I especially recommend their line of fruit brandies, which are produced the old-fashioned way, using fresh fruit that is juiced, fermented into a wine, and then distilled into an unsweet spirit, somewhat like Cognac. Try their peach brandy in a classic Philadelphia Fish House Punch. I promise your life will be better for it.


newyorkpost--2019-09-09--Steven Mnuchin says economy is solid despite China trade war

China and the United States agreed on Thursday to begin...


npr--2019-07-26--The US Economy Is Slowing As Trade War Takes A Toll

The U.S. Economy Is Slowing As Trade War Takes A Toll  The broadest measure of U.S. economic growth fell to a 2.1% annual rate in the second quarter — down from a 3.1% pace in the first three months of 2019, the Commerce Department said. A drop in exports, amid the trade war with China and other countries, contributed to the slowdown.  Friday's gross domestic product report is a key indicator ahead of the Federal Reserve's expected interest rate cut next week.  The Commerce Department cited a number of other factors for the slowdown, including drops in business investment and investments in commercial and residential real estate. Consumer and government spending remained strong.  Don't see the graphic above? Click here.


npr--2019-08-23--More Rate Cuts Powell Says Fed Is Ready To Help Economy Grow Amid Trade Tensions

More Rate Cuts? Powell Says Fed Is Ready To Help Economy Grow Amid Trade Tensions  Updated at 11:35 a.m. ET  Signalling the possibility of more interest-rate cuts, Federal Reserve Chairman Jerome Powell said the central bank will "act as appropriate" to sustain the economic expansion as the trade war with China takes a toll on global growth and the U.S. economy.  In prepared remarks Friday to a Kansas City Fed gathering in Jackson Hole, Wyo., Powell said the economy faces "significant risks" and cited several developments that have roiled financial markets in recent weeks.  Those developments include new U.S. tariffs on imports from China; signs of a global slowdown, namely in the economic powerhouses Germany and China; and the growing possibility that the United Kingdom will leave the European Union without a deal.  "Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States," Powell said.  He said the U.S. economy has continued to perform well, driven by consumer spending, but job creation has slowed.  "Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion," Powell said.  Last month, the Fed cut interest rates for the first time in over a decade, lowering the cost of borrowing for credit cards, auto loans and mortgages.  President Trump has repeatedly pressured the Fed to lower interest rates further to boost the economy, and this week he called for a dramatic 1-percentage-point cut.  On Friday, Trump again tweeted his criticism of the central bank. "We have a very strong dollar and a very weak Fed. ... My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" Trump's tweets came shortly after China announced retaliatory tariffs against $75 billion in U.S. goods.  In his remarks, Powell said that "while monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade."  He also addressed another issue on the mind of market watchers: whether the long U.S. expansion is leading banks and other financial firms to take more risks.  "We have not seen unsustainable borrowing, financial booms, or other excesses of the sort that occurred at times [before the Great Recession], and I continue to judge overall financial stability risks to be moderate," he said. "But we remain vigilant."


politicususa--2019-05-31--Trump Just Started A New Trade War With Mexico That Could Send The Economy Reeling

Because one disastrous trade war with China isn’t enough for this out-of-control president, Donald Trump is planning to wage another one against Mexico – and it could send the economy reeling.  Trump announced a short time ago that he will “impose a 5% Tariff on all goods coming into our Country from Mexico.”  Earlier on Thursday, Trump – still thinking he’s hosting a game show on NBC – teased his upcoming announcement like he was promoting a season finale, saying, “It will be a statement having to do with the border and having to do with people illegally coming over the border and it will be my biggest statement so far on the border.”  Though Trump seems eager to start a new trade war with America’s southern neighbor even as the U.S. and Mexico are in the middle of trade deal negotiations, his own staff seem to recognize that it’s probably a terrible idea.  According to The Washington Post, “[S]ome White House aides are trying to talk him out of it, arguing that such a threat would rattle financial markets and potentially imperil passage of the USMCA trade agreement.”  Not only will the stock market likely take a hit because of Trump’s decision, but it could sink the pending trade deal with Mexico and – like his trade war with China has done – hurt American consumers.  As Ted Genoways, a contributing writer for Mother Jones and The New Republic, said on Thursday, “If [Trump] attempts a simultaneous trade war with China and Mexico, the farm economy—and the U.S. economy—will plummet.”  After Robert Mueller made his first public remarks this week in which he all but admitted he would have indicted Trump if he wasn’t the president, Trump is clearly trying to change the subject.  In order to do so, he is desperately reaching back to the issue that riles up his base more than any other: immigration.  While this might animate and distract the 35 to 40 percent of the country that still supports him, it won’t fool anybody else.  And it almost certainly won’t slow the growing support among lawmakers in both parties that believe Congress should launch a formal impeachment inquiry.


prisonplanet--2019-09-16--European Central Bank sparks President Trumps anger as it cuts rates and restarts QE to stimulate w

European Central Bank sparks President Trump’s anger as it cuts rates and restarts QE to stimulate weak economy amid trade war jitters and Brexit fears

The European Central Bank (ECB) has launched a new round of monetary stimulus to give the economy a boost in the face of global uncertainties like the US-China trade conflict and Brexit.  The central bank, which acts for the 19 countries that use the euro, sparked the anger of US President Donald Trump when it revealed plans to cut the rate on deposits it takes from banks to minus 0.5 per cent from minus 0.4 per cent.  That is a penalty rate that pushes banks to lend excess cash, but was a smaller cut than the market was hoping for.  Trump took the move as a cue to lash out at the US Federal Reserve on Twitter.  ‘European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the Very strong Dollar, hurting U.S. exports…. And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!’ he said.  It marks the second time this year that the US president has accused the ECB of unfairly driving down the euro.  Trump has long been urging the Fed to slash rates, but the US organisation has for the most part resisted.  This article was posted: Monday, September 16, 2019 at 4:23 am


rawstory--2019-04-02--Trump willing to tank economy to get his wall built Security is more important than trade

Trump willing to tank economy to get his wall built: ‘Security is more important than trade’

President Donald Trump in a Tuesday conference made clear that he was completely willing to let the American economy tank on his watch by completely closing the U.S.-Mexico border, saying that security was more important than trade with our third largest trading partner and largest supplier of imported produce.  “Sure, it’s going to have a negative impact on the economy,” the president jovially admitted of his proposed shutdown. “It is one of the biggest trade deals in the world that we’ve just done with the USMCA. It is a very big trading partner.”  “Trading is very important, the borders are very important, but security is what most important. I have to have security,” said Trump. “And we’re going to have security in this country. That is more important than trade.”  “Let me just give you a little secret, security is more important to me than trade, so we’re going to have a strong border, or we’re going to have a closed border,” the president repeated for a third time. “I’m totally prepared to do it.”


sottnet--2019-03-17--Trumps trade war cost US economy 78B in 2018

Trump's trade war cost US economy $7.8B in 2018

'Republican counties bore the largest cost of the full war'  America's trade war resulted ineconomists at leading US universities found.Imports from targeted countries declined 31.5 percent, while targeted US exports fell by 11 percent, the evaluation of the short-term impact of trade conflicts with partners across the globe has shown.The findings were presented in a study titled 'The Return to Protectionism', written by researchers from Yale, Columbia, UCLA, and the University of California, Berkeley. The paper was published by the National Bureau of Economic Research earlier in March.While $7.8 billion is a relatively small figure for the country's whole economy, amounting to 0.04 percent of GDP, the authors note that American "consumers bear the incidence of the tariff." Annual consumer and producer losses from the higher costs of imports totaled $68.8 billion, or 0.37 percent of GDP.While "all but 30 counties experience a reduction in tradeable real income," Trump's actions surprisingly brought the largest losses to GOP counties, according to the research.The authors saidThe losses in those areas arethan in heavily Democratic counties."We find that tradeable-sector workers in heavily Republican counties were the most negatively affected by the trade war," the economists concluded.Last year, the Trump administration imposed unilateral tariff increases to combat what the US leader calls unfair trade practices by China, the European Union, and other trade partners. The move was met with tit-for-tat measures, including from Beijing, with which the US has been trying to ink a trade deal during lengthy talks. The standoff with China has already resulted in duties on $250 billion in Chinese imports, while China retaliated with levies on $110 billion in US goods.Washington also applied levies of 25 percent on imports of steel and 10 percent on aluminum from the EU, Canada, and Mexico. Brussels responded with duties of 25 percent, including on Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel, and aluminum.


sottnet--2019-12-27--The global economy is sick and it has nothing to do with the trade war

When the dollar goes up, trade first and then the whole global economy goes down. Including the US economy.  The World Trade Organization (WTO) reported that for the first time since 2009 global trade volumes have declined. During the third quarter of this year, the gross number of goods sent abroad from one country to another were fewer than the amount of those traded during the third quarter of last year. Though the negative was small, they always are to start with, it's never a good thing when fewer goods are moved around.Despite worldwide population expansion and the presumed gain of wealthier economies due to a boom everyone had been talking about, the WTO says that trade volumes peaked during that last third quarter. According to the same data, total trade values, that is, the monetary value of goods being traded factoring prices and currency translation, peaked the quarter before.You may remember the second quarter of 2018. Central bankers remained in their full glory talking about the resurrected global recovery which they would use to return their policies to or near normal. It was a good time to be one for the first time in a long time. They made full use of the trend - as a means to dismiss the more and more frequent warning signs.The dollar suddenly and sharply rose. Mere weeks later, May 29, a worldwide burst of what the FOMC would later downplay into some mysterious "strong worldwide demand for safe assets."Just a few weeks after that the eurodollar futures curve inverted and became what the WTO now shows isTrade wars, right?It was around the same time that US President Donald Trump began to seriously threaten to put right what he saw as a Chinese wrong. During the past few decades, China had used unfair practices, it is claimed, including its currency to strip the US economy of its manufacturing pre-eminence. Offshored production had to come home, therefore tariffs on goods made in China.The legitimacy of that argument aside, the dispute has happened and it did escalate into a real thing. The fears of a trade war and the trend toward protectionism eventually became actual tariffs and levies. But how does one connect them to the WTO's data?For one thing, as my colleague Joe Calhoun likes to (correctly and repeatedly) point out,. The US demands from world markets what the US demands.We would expect, as Joe says, a global redistribution of trade. For every good China doesn't produce because it has become relatively more costly for Americans to consumer it there is a good someone else will at the right price. If not the Chinese, then the Germans or maybe Indians. Trade wars produce winners as well as losers.Except, in this one we can't find any winners. None.Even Canada and Mexico, the latter perfectly positioned to take advantage of trade redistribution, instead downturn and now negatives specifically in recent months.As if to further confound the textbook analysis that passes in the mainstream,. So, in addition to President Trump making Chinese goods more expensive, China's competitor's goods have become that much cheaper for US businesses to import and consumers to buy - total demand which, we are told, has remained relatively steady with the unemployment rate as low as it is.The primary reason Mexico's exports are now contracting is that the US imports from Mexico were first.The domestic trade data does confirm the negative effects of the trade war on China, as anyone would expect. The total value of goods inbound from that one country has collapsed, down by more than 23% year-over-year in October 2019 (the latest data) following hefty double-digit declines since earlier in the year.A lot less lately. As the export decline picks up across the world in the Autumn of 2019,In other words, while trade wars are indeed reallocating global value chains, creating relative winners and losers, there still must be something else overriding this reorganization which leaves everyone depressed and worn.That can only be the work of the dollar.Time and again, we see this asGiven that, you would think there would be an extra-special initiative to figure out what exactly makes the dollar move as it does. Nope. Instead, it's the same story time and again: central bankers and Economists who say it either reflects the strength of the US economy versus overseas (decoupling that pretty quickly resynchronized on the downside), interest rate differentials in our favor (the dollar first started to rise while interest rates did, and then it rose some more while they fell), or, for the more adventurous if not quite fully open-minded official, some version of flight to safety (which would benefit the US and would've at the very least increased inflation and demand).The textbook explanation for the dollar's behavior consistently falls short from each and every angle.The key reason why is that there is no appreciation for how the world is short the dollar. I don't mean short as in financial firms all over the world betting against it, hoping to profit by its falling value in the same way they would shorting a stock.Hardly anyone takes them into account. A reserve currency isn't just the privilege of pricing primary commodities in your own denomination. It sure isn't the petrodollar.A reserve currency means that there has to be enough of it in all corners of the world such that vastly different systems can talk to each other, trade with each other, and connect with each other in vital ways (such as "capital flows"). They do so by virtue of the dollar being made available to everyone everywhere.You can easily, fluidly translate local currency, finance, and trade by first turning them into dollars. And then whomever is on the other end, they do the same thing. The dollar sits in the middle of everything because it is universal.This doesn't just happen, though, it requires enormous financial resources to make it happen. The reason is as simple as the methods complex:(which doesn't necessarily mean contraction or declines; this is an important if tangential point to the discussion here; rate of change is what matters, which means that if the world demands, hypothetically, 10% more "dollars" this year than last year and banks are only willing to supply 5% more, that's a big problem which still leads to all the negative results associated with textbook tight money conditions).If the world requires so many of these offshore intermediating "dollars" and then traders from all over it can no longer easily get their hands on them, it's really easy to work out what might happen to the price therefore exchange value of the dollar in that situation.From the perspective of a global reserve currency, since global trade is its first function and use you can then appreciate why global trade is just where "dollar" woes show up first in the economy.And it is only confirmed by all the price and market signals, as well as a large volume of data, that tell us about what those banks are doing as far as their intentions for the offshore dollar reserve.as coming from that very sector, those very banks we would hope would be supplying reserve currency rather than hoarding the safest, most liquid instruments instead.According to the Federal Reserve's Z1 data, the Financial Accounts of the United States, starting in that pivotal second quarter of 2018 (the one with May 29)And it is on top of $248 billion of safe, liquid agency debt that depositories have also piled into their holdings. There are. It is the most surefire way to turn globally synchronized growth into globally synchronized downturn exports first.The change in UST holdings is something that others have noticed, as well. The BIS, for example, in its last Quarterly Review published earlier this month spends a few determined pages on September's "shocking" repo disruption. The data they provide is quite similar to the Z1 figures, though shaped in its interpretation quite differently. This is what the BIS authors said about it:"As repo rates started to increase above the IOER from mid-2018 owing to the large issuance of Treasuries, a remarkable shift took place: the US banking system as a whole, hitherto a net provider of collateral, became a net provider of funds to repo markets."They then connect the big, unsubstantiated assumption in the first sentence to focus in on the implications of the last sentence's final clause - net provider of funds to the repo market - while completely glossing over the far more important, and corroborated, middle.What was that thing about US banks hitherto something?The BIS begins where everyone else had, under this suspicion that the federal budget was the reason for repo rates rising ("too many Treasuries" that have to be funded in repo). And it is looney, because even its data showsthe point they focus on.Several weeks ago I pointed that out in response:"The BIS has interpreted its data to mean the biggest US banks had become important sources of funds in repo. One can also interpret the same data to mean something else; a different take which is actually consistent with the facts. Market prices. Dollars and Treasuries (bunds, inflation expectations, interest rate swaps, eurodollar futures, etc.)than a dismissible non-factor that only showed up in September 2019 by technical accident."And my point is further aided by both the BIS data as well as the Z1 figures - and not just those taken from US Depositories.One other massive player in the domestic credit market system is ROW, or rest of world. This is foreign financial bank and non-bank agents which supply credit to the US, in dollars, as well as take in funding for that supply of credit as well as other supplies of credit in other places. Also in dollars.What the Z1 data for ROW tells us is not what the BIS interprets. Beginning in the third quarter of 2018, ROW's repo liabilities began to rise before exploding in Q2 and Q3 2019. The total increase is $359 billion, or 40%.It tells us that, year and a half or so. But why?Z1 also shows that- during Q4 2018's landmine, for example, total non-repo ROW US$ liabilities crashed by more than 9% year-over-year, a disappearance of about $1.2 trillion (with a "T") going back to Q4 2017. These are everything from deposit liabilities to foreign direct investment, along with a healthy dose of bonds and, as usual, a big chunk of "other."Those dollar routes started (Q1 2018) downhill at the same time the BIS repo data says US banks "hitherto a net provider of collateral" increasingly were not. What followed was: surprising global market liquidations in January 2018, the dollar rising by April, then that global collateral call on May 29, curve inversions over the next few weeks, and the ROW sector more and more depending upon repo as its funding of last resort.All before the end of 2018.And while all that was taking place, Jay Powell was smiling widely for the cameras about his US inflationary breakout even though global trade and the global economy had already begun their descent. The strong worldwide demand for safe assets directly tied to the increasingly "strong" dollar he couldn't and wouldn't explain.To clarify all the intricacies of all these various moving parts would require even more space than I've already consumed (and I've done so, in pieces, over the past few months and years). Suffice it to say,Shorts and shortages, still souring rather than soaring. Who can win at that?


sputnik--2019-01-29--Less Appetite for No-Deal Brexit in EU With German Economy Weakening - Trade Sec

UK Trade Secretary Liam Fox has stated that there is much less appetite for a no-deal Brexit in the EU with the German economy weakening, the BBC reported.  "We've seen, for example, the German economy weakening, we've seen the French economy weakening, and I think this (EU)view that 'we can simply weather out any disturbance that would occur from a no deal', I think there's much less appetite for that", he stated.  There will be another opportunity for lawmakers to vote against the no-deal Brexit, Fox stated as quoted by the BBC.  The statements come after UK Prime Minister Theresa May reported on her government's plans for Brexit last week, following a defeat of the withdrawal bill in the House of Commons.  Lawmakers from different parties have submitted amendments that could be put to the vote on Tuesday and, if passed, would influence how the government proceeds with its Brexit plans.


sputnik--2019-09-05--Seoul Wants to Work With Moscow to Stabilise Economy Amid Trade Row With Japan Official

Seoul Wants to Work With Moscow to Stabilise Economy Amid Trade Row With Japan – Official

"There is great potential for cooperation between the two countries. First, Russia has hydrogen fluoride; therefore, to stabilize the supply of such resources to Korea, we can cooperate with Russia. Secondly, in order to develop the country‘s field of components, equipment and materials, we can also cooperate with Russia, which has first-class source technologies", Hong, who also serves as Minister of Economy and Finance and is leading his country's delegation at the Eastern Economic Forum in Vladivostok, said on the sidelines of the event.  The minister said that Japan’s current export restrictions were "trade revenge for a Korean court ruling on compensation for forced labour".  "These measures were carried out without justification, and these measures are unilateral and discriminatory and clearly violate the provisions of international trade, including the WTO treaty", Hong said.  He added that the South Korean government was in the process of developing multilateral plans to ensure the stabilisation of imports of certain affected industries, in particular materials, equipment and components.  On 1 July, Japan announced it would be imposing restrictions on exports of certain chemical materials to South Korea that are vital to manufacturers of semiconductors and displays. It also removed Seoul from its white list of preferred trading partners.  These decisions are widely seen as a tit-for-tat response to a 2018 decision of the Supreme Court of South Korea that ordered Japanese companies to pay reparations to former Korean workers who were forced into labour during World War II by Japan, a colonial power at the time.


sputnik--2019-11-21--India's Plan to Boost Economy via Stake Sale in Gov't Firms May Harm Jobs - Trade Union General Sec.

The Indian federal Cabinet has approved disinvestment of the government’s stake in public sector majors Bharat Petroleum Corporation Limited (BPCL), Shipping Corporation of India (SCI), and inland cargo mover Container Corporation of India (Concor), apart from two other public sector units, in order to boost revenue collections amid the slowing economy.  The Indian government’s mega plans on disinvestment of government stakes in public sector units is likely to fetch $11.2 billion for the government.  After Indian Prime Minister Narendra Modi led Cabinet met late Wednesday, Finance Minister Nirmala Sitharaman in a media briefing said, “The government will sell its 53.29% stake in Bharat Petroleum Corporation Ltd to a strategic buyer, ceding management control.”  General Secretary of the All India Trade Union Congress Amarjeet Kaur believes that this move is a "retrograde decision" that will cause job losses.  The three public sector firms put up on the selling block by the government are the top companies in their respective sectors. A Finance Ministry source said that at current valuations, the three companies themselves are likely to fetch around $11.2 billion for the government in the current financial year.  Supporting the Cabinet’s decision, Indian Oil Minister Dharmendra Pradhan said on Thursday that the “Government has no business to remain in business. Sectors, where businesses can sustain themselves, should be allowed to continue”.  The other two companies that are on sale are THDC India Ltd., in which government will sell a 74.23% stake and North Eastern Electric Power Corporation Ltd., from which the government plans to exit completely.


sputnik--2019-12-26--Rapid Stock Market Growth Reflects Risks to World Economy Amid US-China Trade War – Prof

US stock futures continued to rise on 26 December amid post-Christmas trading. Citing Bespoke Investment Group, CNBC admitted Thursday that the S&P 500, that measures the stock performance of America's 500 large-cap companies, has returned over 50 percent since Donald Trump was elected.  According to the media outlet, the bellwether index – a leading indicator of the direction of the economy – has secured over 28 percent in 2019 this year, "well above the average 12.8% return of year three for past US presidents".  Other indices have also grown considerably: "Nasdaq up 72.2 percent since our great 2016 election victory! Dow up 55.8 percent. The best is yet to come!" the US president tweeted on 24 December.  Trump does not deserve all the credit for the rise, according to Nicola Borri, an economics and finance professor at Rome's LUISS Guido Carli University: in fact, the US stock market has been growing at an unprecedented pace since the end of the global financial crisis of 2007-2008.  At the same time, "most economists are worried about the policies put forward by the Trump administration, especially those related to trade policies", Borri points out, in an apparent reference to the US-China trade war that has repeatedly cast a chill over global markets.  The Sino-American trade war has been raging on since spring 2018, accompanied by temporary truces and tough negotiations. In mid-December, Washington and Beijing reached a consensus on the terms of a "phase one" trade deal. The agreement envisages the cancellation of some new tariffs and reduction of some old ones on Chinese imports in return for increased purchases of American farm, energy, and manufactured goods by China, as well as settling some intellectual property problems.  Although stocks are continuing to go higher, Borri does not rule out a possible collapse of trade talks, which could have serious negative effects on the world economy.  As he explains, "whenever news arrives that these risks do not materialise, like when Trump finds an agreement with China, then investors reap the fruits of their bets".  "These are all sources of major risk for the world economy and they are likely to be with us for the next years, and possibly more", he emphasises.  Meanwhile, some economic observers predict a further rise despite the aforementioned risks: as Market Watch suggested on Monday, emerging markets are likely to get more attractive, US stocks to go higher, and President Donald Trump to be re-elected, while the US economy is catching the wind in its sails.


tass--2019-08-26--Global trade wars key risk for Russian economy in 2020-2022 says minister

Global trade wars key risk for Russian economy in 2020-2022, says minister

MOSCOW, August 26. /TASS/. Economic Development Minister Maksim Oreshkin considers further deterioration of the global economic environment amid trade conflicts to be the key risk factor for the Russian economic development.  "(Russia’s) Economic Development Ministry projects that global economic growth will decline below the 3% mark in 2019 for the first time since 2009. Considering the ongoing trade wars that are an additional brake on global economic growth, the outlook has been revised downwards. Global GDP growth is expected to slow down to 2.5% in 2024," Oreshkin told a briefing on Monday.  He added that "the global economy will not contribute to a faster growth of Russia’s economy."  The minister said earlier that the possible global crisis due to the US-China trade conflict would negatively influence Russia, though the country is better-prepared for that crisis than for those in 2008 and 2014 thanks to the fiscal rule and the inflation targeting policy.


tass--2019-10-08--Global economy will lose $700 bln by 2020 due to trade conflicts, says IMF head

WASHINGTON, October 8. /TASS/. The global economy will lose about $700 bln or about 0.8% of world GDP by 2020 due to global trade conflicts, while the growth of world trade has almost stopped, IMF Managing Director Kristalina Georgieva said on Tuesday.  In late September, the Executive Board of the International Monetary Fund (IMF) selected Kristalina Georgieva to serve as IMF Managing Director and Chair of the Executive Board for a five-year term starting on October 1, 2019.  "For the global economy, the cumulative effect of trade conflicts could mean a loss of around $700 billion by 2020, or about 0.8% of GDP," she said adding that the "global trade growth has come to a near standstill," Georgieva said.  "We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll," the head of the IMF added.  Georgieva called on the global community to "work together, now, and find a lasting solution on trade."  "Countries need to address legitimate concerns related to their trade practices. That means dealing with subsidies, as well as intellectual property rights and technology transfers," she said.  "We also need a more modern global trading system, particularly to unlock the full potential of services and e-commerce," she stated added that "the key is to improve the system, not abandon it."  Currently, the most acute trade conflict is the dispute between the United States and China. Over the past year, they have repeatedly imposed customs duties against each other.  US President Donald Trump is trying to reduce the trade deficit, while China disagrees with Washington’s policies and responds with similar measures.  In 2018, the United States introduced customs duties on imports of steel and aluminum, which caused sharp criticism, in particular from Washington’s allies in Europe.