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“It's time for a Trade War” said President Dumb aka Cadet Bone Spurs


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Author Topic: “It's time for a Trade War” said President Dumb aka Cadet Bone Spurs  (Read 30 times)
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« on: January 23, 2018, 09:20:06 pm »


from the print edition of the Los Angeles Times....

China trade war fear grows

U.S. could see strong backlash from Beijing if Trump follows up on tough rhetoric.

By DON LEE | Tuesday, January 16, 2018

President Trump speaks to Chinese President Xi Jinping in front of First Lady Melania Trump and Xi's wife, Peng Liyuan, in the Great Hall of the People in Beijing in November. Trump has made oft-repeated promises to get tough with China on trade. — Photograph: Jim Watson/Agence France-Presse/Getty Images.
President Trump speaks to Chinese President Xi Jinping in front of First Lady Melania Trump and Xi's wife, Peng Liyuan, in the
Great Hall of the People in Beijing in November. Trump has made oft-repeated promises to get tough with China on trade.
 — Photograph: Jim Watson/Agence France-Presse/Getty Images.


WASHINGTON — For years, one bright spot in the United States' huge trade imbalance with China has been the Asian nation's soaring appetite for American agriculture.

But this month, China abruptly imposed stricter requirements on billions of dollars of American soybeans in a way that threatens to curb the exports and punish a wide swath of the U.S. heartland.

And that could be just the beginning, if President Trump follows through on his oft-repeated promise to get tough with Beijing on trade.

Although Chinese media attributed the new policy to quarantine officials who reported finding mildew contamination in some shipments, the tactic was all too familiar and the message unmistakably clear.

“It was kind of a warning shot that they're not going to take things lying down, and that there will be pain for U.S. exporters” should Trump levy trade sanctions on China, said David Loevinger, a former senior Treasury Department official for China affairs and now an analyst for TCW Emerging Markets Group in Los Angeles.

“Beans and Boeing,” quipped Derek Scissors, a China specialist at the American Enterprise Institute, listing the two most likely targets of Chinese retaliation. Soybeans and airplanes are America's top two exports to China, and farmers in particular have long held sway on Capitol Hill.

After a relatively quiet first year on China trade, the Trump administration is gearing up to announce several actions, including possible tariffs stemming from investigations into a range of Chinese behaviors that it views as distorting trade and hurting U.S. firms and workers.

Among these are allegations of intellectual property theft and forced technology transfer in which U.S. companies wanting to do business in China must turn over their tech and production secrets, which Chinese competitors then adopt. Trump officials launched the probe by dusting off an old provision of U.S. trade laws that gives the president broad powers to apply punitive measures.

Late on Thursday, the Commerce Department said it sent Trump the results of an investigation into whether steel imports threaten U.S. national security. The probe targets China, the biggest steel producer, and could lead to tariffs, import quotas or both. Trump has 90 days to decide.

Separately, the U.S. International Trade Commission decided on Friday that imports of Chinese aluminum were harming the U.S. industry, and will now proceed to determine what penalties would be appropriate. The Trump administration took the rare step of starting the aluminum case on its own, even though no U.S. firms had filed a complaint.

“Whatever you think the degree of trade friction was last year, it's going to be much more frictional and much more tit-for-tat in the coming year,” said David M. Lampton, director of China studies at the Johns Hopkins School of Advanced International Studies in Washington.

A decision to slap tariffs on Chinese aluminum, steel or solar panels, by itself, probably would not be enough to trigger a serious trade conflict.

Instead China probably would give a measured response, given their relatively small impact on the Chinese economy, said Andy Rothman, an investment strategist at Matthews Asia in San Francisco and former economic officer at the U.S. Embassy in Beijing.

Others say that if American jobs and wages keep growing as expected in the near term, Trump will have economic cover to put off action or continue to apply a light hand in his dealings with China, as he has so far.

The president last year declined to label China a currency manipulator despite his campaign promise to do so as soon as he took office. As a candidate, he had also threatened to impose tariffs of 45% on Chinese imports.

But last year, Trump courted a personal relationship with Chinese President Xi Jinping in hopes of using trade as leverage to win Beijing's help in reining in North Korea's nuclear ambitions. That strategy has had mixed results, at best.

And with his trade and economic team now largely in place, including top trade official Robert Lighthizer, Trump wants fundamental changes in China trade, not incremental improvements.

To that end, Trump officials already have made clear the United States won't support China’s yearning to be recognized at the World Trade Organization as a market-based economy.

His administration has signaled that Chinese investments in the United States will have a harder time getting approved.

And in a sharp departure from recent administrations, Democratic and Republican, Trump's National Security Strategy issued last month referred to China, along with Russia, as a threat to the United States, noting that the two nations “challenge American power, influence and interests, attempting to erode American security and prosperity.”

Even with increased American exports of foods, planes and medical equipment, the overall U.S. trade deficit in goods with China has not only kept rising under Trump, but almost certainly reached a new record last year, exceeding the previous high of $367 billion in 2015. The full-year results will be released next month. (The Chinese government said on Friday its trade surplus with the United States last year was the largest ever.)

Trump has repeatedly denounced large deficits with trading partners, none of which is bigger than the one with China. The president is sure to come under increasing pressure from constituents in states where Trump's attacks on foreign trade found particular resonance and ultimately helped catapult him into the White House.

In the past, Beijing could count on American corporations to press the White House and Congress to soften their stance on China, but there's a lot more ambivalence today. U.S. businesses have grown increasingly frustrated at Chinese policies favoring domestic companies, and with the central government's broad retreat from its 2013 road map to step up economic reforms and let market forces drive growth in the country.

The political climate in the United States isn't likely to help, either. Even without Trump stirring the pot, China figures to be a popular target ahead of the mid-term elections, as in the past.

“We're in an election year that's not going to reward moderation, and we've got two nationalistic leaders who are pretty full of themselves,” said Lampton, referring to Trump and Xi. For his part, Xi has raised his political stature to something like the status of supreme leaders Mao Tse-tung and Deng Xiaoping by purging political opponents and tightening control of the internet and media.

“He is exuding a confidence that China has arrived on the international scene in a big way, and they're not going to be bullied and pushed around, and if you want to mess with China, then China will mess with you back,” David Bachman, a China scholar at the University of Washington in Seattle, said of Xi.

Nor does Trump's character suggest a White House that will turn the other cheek, even though both Gary Cohn, Trump's top economic advisor, and Treasury Secretary Steven T. Mnuchin are said to be urging their boss to refrain from drastic actions such as across-the-board tariffs on Chinese goods that could ignite a trade war. That in turn would damage the stock market and economic growth, not to mention upset Trump's base of blue-collar workers who depend on cheap goods from China and whose jobs could be hurt as well. China's economy would suffer as well.

“I don't see this as a kind of Armageddon type of confrontation because I think that after turmoil of some degree, there is enough pragmatism when it comes to the economy that there will be shifting ground on both sides,” said Claire Reade, a senior counsel at Arnold & Porter and former assistant U.S. trade representative for China affairs.

Even so, Reade and many others are worried that Trump and his trade team will misjudge the political and economic calculus in the relationship, believing the United States has the leverage to win fundamental changes in the way China operates its economy.

Many experts think the Trump administration would be more effective in opening Chinese markets by working with allies to put pressure on China, instead of imposing harsh measures unilaterally.

Though important, American products, know-how and investments represent a smaller part of the Chinese economy than in the past, and Beijing has increasingly sought to diversify and expand its reach in the global economy. China could buy its soybeans from Brazil, its airplanes from Europe and its beef from Australia.

“The U.S. isn't the driver in China as it once was,” said Russell Johnson, president of China Array Plastics.

American companies in China may be grumbling more today, he said, but ultimately they want to be there because of China's big market. After four decades of doing business in China, Johnson says things are about as good for manufacturers as ever, and he remains “guardedly optimistic” that a trade war won't erupt.

“The wild card in this whole thing is Trump. You just don't know what he's going to do on any particular front,” Johnson said.


__________________________________________________________________________

• Don Lee covers the U.S. and global economy out of Washington, D.C. Since joining the Los Angeles Times in 1992, he has served as the Shanghai bureau chief and in various editing and reporting roles in California. He is a native of Seoul, Korea, and graduated from the University of Chicago.

http://enewspaper.latimes.com/infinity/article_popover_share.aspx?guid=b6073d1e-27a9-440e-b1d6-0ffb6cad55e7
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Kiwithrottlejockey
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« Reply #1 on: January 23, 2018, 09:20:27 pm »


from the Los Angeles Times....

Trump slaps big tariffs on imported solar panels
in major escalation of a trade fight with China


By EVAN HALPER and DON LEE | 5:20PM EST — Monday, January 22, 2018

The solar business in the U.S. has boomed in recent years, driven by falling prices for panels, thanks in part to cheap imports. — Photograph: Susan Montoya Bryan/Associated Press.
The solar business in the U.S. has boomed in recent years, driven by falling prices for panels, thanks in part to cheap imports.
 — Photograph: Susan Montoya Bryan/Associated Press.


THE TRUMP ADMINISTRATION Trump administration announced on Monday that it would impose hefty tariffs on the cheap, imported panels that have driven the rapid expansion of solar power in the United States, a move that industry groups warned would slow the spread of renewable energy and cost thousands of jobs.

The tariffs come as President Trump has vowed to take a tough line against cheap foreign imports that he blames for undercutting American manufacturing industries.

The administration also announced it would impose hefty tariffs on imported large residential washing machines. In both cases, inexpensive imports — mostly from China in the case of the solar panels — have undercut U.S. manufacturers, administration officials said.

Imports from China have been a particular target of Trump's rhetoric. The tariffs are the most concrete step that he has taken to put those words into action. They mark the start of what many analysts expect will be a series of tougher actions on trade by Trump in the coming months, especially against China, with whom the U.S. has a huge trade deficit.

The administration also has taken moves against imports of Chinese-made steel and aluminum and is considering sweeping sanctions against China for allegedly stealing U.S. intellectual property and forcing American companies to hand over technology secrets to do business in China.

Trump acted after the government's International Trade Commission “found that U.S. producers had been seriously injured by imports,” said U.S. Trade Representative Robert Lighthizer. “The president's action makes clear again that the Trump administration will always defend American workers, farmers, ranchers and businesses.”

But the move against imported solar panels also threatens some of the very types of jobs that Trump has vowed to protect. Companies that install solar panels will probably trim their workforces, industry analysts warned, as the tariff — which starts at 30% on the imported panels and gradually declines each year — threatens to substantially raise the price of solar power in the United States.

Imposition of the tariffs drew protests from environmentalists, who said the move would set back efforts to combat global warming, and from the solar power industry.

The levies, said Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, “will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”

California, where the renewables industry has taken off, will be among the states hardest hit by the new levies.

The industry trade group estimates the tariffs on solar panels will cost 23,000 jobs nationwide within the year, and that billions of dollars in potential investment in solar power will evaporate because of them.

The move also drew protest from some Republicans who said it violated the party's long-standing support for free trade.

"Here's something Republicans used to understand: Tariffs are taxes on families," said Senator Ben Sasse (Republican-Nebraska).

The case for tariffs was filed at the International Trade Commission by two American firms that say their businesses have been crushed by cheap imports from Asia and Europe, which by now account for more than 90% of the solar panels installed in the U.S.

The trade commission voted last month 4-0 in favor of imposing tariffs. It said the action was needed to confront the near-extinction of an American industry.

The commission found that the cheap imported panels had played a major role in a boom in solar power. The tripling of solar capacity in the U.S. was “spurred on by artificially low-priced solar cells and modules from China,” the commission said.

But the import boom also has contributed to more than two dozen U.S. solar manufacturers closing since 2012.

Government incentives in China have enabled its solar panel makers to produce 61% of the world's solar panels, the trade commission said. In 2005, China produced just 7%.

Few analysts, however, beyond those hired by the firms that filed the trade petition, project the tariffs will revive the panel-manufacturing industry.

The companies that filed the complaint had pushed for far steeper tariffs than Trump ultimately imposed, aiming for a remedy that would have lifted the cost of imported panels from 35 cents per watt to 78 cents, which is around the cost of the American product.

Under Trump's plan, the initial 30% tariff would decline by 5 percentage points each year. The tariff would last for four years. The first 2.5 gigawatts of imported solar panels would be exempted from the tariff each year.

The tariffs on washing machines are even steeper than those on solar panels: Trump approved tariffs of up to 50% on imports of finished washers as well as on major parts that go into them, such as plastic tubs and metal drums.

The tariffs, set for three years, were sought by the appliance maker Whirlpool Corporation, which operates washer plants in the United States and employs about 15,000 manufacturing workers.

The action targeted two Korean companies, Samsung and LG, which have made significant gains in U.S. market share for residential washers in recent years. Both companies recently have moved to open assembly plants in the U.S., but the new tariffs on imported washer parts means that the machines will be more expensive for them to produce even on American soil.

Whirlpool argued that Samsung and LG were exporting washers at unfair prices and that they had repeatedly avoided previous country-specific tariffs by shifting production from Korea and Mexico to China and most recently to Thailand and Vietnam.

The unfair competition, Whirlpool said, had hurt its sales and curbed its employment, despite large investments at plants like the one in Clyde, Ohio, where some 3,000 people work.

“This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee,” Whirlpool Chairman Jeff M. Fettig said in a statement on Monday.

But officials in South Carolina and Tennessee, where the two Korean companies have factories, had warned that a tariff could cost jobs in their states.

“Today's announcement is a great loss for American consumers and workers,” Samsung said in a statement. “This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices.”

The two firms that brought the solar case — Georgia-based Suniva, which is in bankruptcy, and Oregon-based Solar World Americas, a struggling subsidiary of the bankrupt German firm SolarWorld AG — sought relief through the filing of what is known as a “section 201” case.

That provision of the nation's trade law allows the president to broadly impose tariffs if the trade commission finds the move is needed to protect an American industry from economic peril.

The provision had not been exercised since 2001, when President George W. Bush invoked it to protect U.S. steelmakers from imports. Other nations retaliated, and the World Trade Organization ultimately voided the levies.

The solar tariffs could ultimately meet the same fate. The World Trade Organization applies a high standard for proving injury. But even if it ultimately rejects the administration's tariffs, the levies will remain in place until it does.

The firms applauded Trump's move. “The president is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight,” said a statement from Suniva.

On the other side, the Natural Resources Defense Council, a leading environmental group, said the decision would reverse the progress toward greater use of solar energy.

“Higher-priced panels will dramatically reduce the pace of new solar energy installations, increase climate-changing emissions, and lead to significant job losses nationwide,” the group said.


__________________________________________________________________________

• Evan Halper writes about a broad range of policy issues out of Washington D.C., with particular emphasis on how Washington regulates, agitates and very often miscalculates in its dealings with California. Before heading east, he was the Los Angeles Times bureau chief in Sacramento, where he spent a decade untangling California's epic budget mess and political dysfunction.

• Don Lee covers the U.S. and global economy out of Washington, D.C. Since joining the Los Angeles Times in 1992, he has served as the Shanghai bureau chief and in various editing and reporting roles in California. He is a native of Seoul, Korea, and graduated from the University of Chicago.

http://www.latimes.com/nation/la-na-pol-solar-tariffs-20180122-story.html
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« Reply #2 on: January 23, 2018, 09:22:27 pm »


Chuckle....I guess it's going to become harder for American exporters to get their soya beans into China without all sorts of hassles, eh?

And I guess Chinese airlines are going to be spending up big on Airbus airliners instead of spending their money at Boeing, eh?

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« Reply #3 on: January 24, 2018, 11:04:38 pm »

trump is better than that commie pussy stooge obama who let china walk all over the us  Wink

hey what did you do to reality cant see him anymore?
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« Reply #4 on: January 25, 2018, 11:29:17 am »


Airbus are going to be laughing all the way to the bank as they make multiple billions of dollars in sales of jetliners to China while Boeing dips out.

Big job losses coming at Boeing. Haw haw haw.
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« Reply #5 on: January 25, 2018, 06:29:32 pm »

the stock market has broken every record america is booming jobs are at an all time high
he's not doing too bad while he's constantly being attacked by the left and the media

yes trump and america are winning
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« Reply #6 on: January 25, 2018, 07:38:08 pm »


The stockmarket is over-hyped and is going to crash soon, big-time.

I betcha Trump (who is falsely claiming credit for the current sharemarket boom) will suddenly disassociate himself from it when that occurs.

That's because Donald J. Trump is a total fraud who as a businessman has had his company go bankrupt seven times.

Not a very successful businessman, eh? More like a rip-off artist who rips-off everybody around him to save his own neck whenever he has mismanaged his company to the extent that it has gone bankrupt. A ponzy scheme operator. A criminal.


And about that rosy economic outlook.....



from The Telegraph....

World finance now more dangerous than in 2008,
warns central bank guru


By AMBROSE EVANS-PRITCHARD | 12:53PM — Monday, 22 January 2018



THE world financial system is as dangerously stretched today as it was at the peak of the last bubble but this time the authorities are caught in a ‘policy trap’ with few defences left, a veteran central banker has warned.

Nine years of emergency money has had a string of perverse effects and lured emerging markets into debt dependency, without addressing the structural causes of the global disorder.

“All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” said William White, the Swiss-based head of the OECD's review board and ex-chief economist for the Bank for International Settlements.

Professor White said disturbing evidence of credit degradation is emerging almost daily. The latest horror is the revelation that distressed UK construction group Carilion quietly raised £112m through German Schuldschein bonds. South African retailer Steinhoff also tapped this obscure market, borrowing €730m.

Schuldschein loans were once a feature of rock-solid lending to family Mittelstand companies in Germany. The transformation of this corner of the market into a form of high-risk shadow banking, apparently to evade scrutiny, shows how badly the lending system has been distorted by quantitative easing (QE) and negative interest rates.

Professor White said there is an intoxicating optimism at the top of every unstable boom when people latch on to good news and convince themselves that risk is fading, but that is precisely when the worst mistakes are made. Stress indicators were equally depressed in 2007 just before the storm broke.

This time central banks are holding a particularly ferocious tiger by the tail. Global debt ratios have surged by a further 51 percentage points of GDP since the Lehman crisis, reaching a record 327 percent (IIF data). Every part of the world economy is exhibiting some deformed pathology.


Professor William White is the ex-chief economist for the Bank for International Settlements. — Photograph: Real Vision.
Professor William White is the ex-chief economist for the Bank for International Settlements. — Photograph: Real Vision.

This is a new phenomenon in economic history and can be tracked to QE liquidity leakage from the West, which flooded East Asia, Latin America, and other emerging markets, with a huge extra push from China pursuing its own torrid venture. “Central banks have been pouring more fuel on the fire,” he told the Daily Telegraph, speaking before the World Economic Forum in Davos. 

“Should regulators really be congratulating themselves that the system is now safer? Nobody knows what is going to happen when they unwind QE. The markets had better be very careful because there are a lot of fracture points out there,” he said.

“Pharmaceutical companies are subject to laws forcing them to test for unintended consequences before they launch a drug, but central banks launched the huge social experiment of QE with carelessly little thought about the side-effects,” he said.

The US Federal Reserve is already reversing bond purchases — ignoring warnings by former Fed chair Ben Bernanke — and will ratchet up the pace to $50bn a month this year. It will lead to a surge in supply of US Treasury bonds just as the Trump Administration's tax and spending blitz pushes the US budget deficit toward $1 trillion, and just as China and Japan trim Treasury holdings.

It has the makings of a perfect storm. At best, the implication is that yields on 10-year US Treasuries — the world's benchmark price of money — will  spike enough to send tremors through credit markets. We are not close to the danger point but the yield crept up to a three-year high of 2.66 percent last week. It has broken out of its 36-year downtrend, prompting loud warnings of a secular bond rout.

The edifice of inflated equity and asset markets is built on the premise that interest rates will remain pinned to the floor. The latest stability report by the US Treasury's Office of Financial Research (OFR) warned that  a 100 basis point rate rise would slash $1.2 trillion of value from the Barclays US Aggregate Bond Index, with further losses once junk bonds, fixed-rate mortgages, and derivatives are included. It said losses could dwarf the “bond massacre” that bankrupted Orange County California in 1994 — and detonated Mexico's Tequila Crisis.

The global fall-out from such a shock could be violent. Credit in dollars beyond US jurisdiction has risen fivefold in 15 years to over $10 trillion. “This is a very big number. As soon as the world gets into trouble, a lot of people are going to have trouble servicing that dollar debt,” said Professor White. The offshore dollar funding markets would dry up, triggering a liquidity squeeze. Borrowers would suffer the double shock of a rising dollar, and rising rates.


The world financial system is dangerously stretched, a former BIS chief economist has warned.
The world financial system is dangerously stretched, a former BIS chief economist has warned.

The OFR report makes unsettling reading. “The cyclically adjusted price-to-earnings ratio of the S&P 500 is at its 97th percentile relative to the last 130 years,” it said. Margin debt on Wall Street has risen to an all-time high, as has the share of risky bonds with minimal protection. So-called ‘covenant-lite’ contracts are now running at 51 percent of all issuance. The top decile of macro hedge funds has raised leverage to 15 times, accounting for $800bn in gross assets.

While banks now have high capital buffers, the risk has migrated elsewhere: to investment funds concentrated in crowded trades. The share of equities traded in “dark pools” outside the exchanges has mushroomed to 33 percent. “A lack of market liquidity may lead to fire-sale risk, a downward price spiral,” it said.

One worry is what will happen to ‘risk parity’ funds when the inflation cycle turns. RBI Capital warned in its investor letter that these funds could lead to a “liquidity crash”. Deutsche Bank has advised clients to take out June 2018 ‘put’ options on the S&P 500 — a hedge against a market slide — arguing that the rally looks stretched and that risk parity funds will amplify any correction.

These funds manage risk by matching bonds and equities through dynamic weighting. The strategy worked marvelously during the ‘Goldilocks’ phase of low inflation and rising stock markets. Both wings of the trade did well. The danger is that both could go wrong at the same, setting off a vicious cycle in the opposite direction.

Funds have doubled-down on the trade with leveraged bets on Treasuries to boost returns. “A breakdown of this strategy poses the greatest threat to the overall market,” says Peter Tchir from Brean Capital. In a sense, risk parity funds may be today's equivalent of the ‘portfolio insurance’ that accelerated the crash in October 1987.

Whether the inflation cycle is really turning, and how fast, is the elemental question of this bull market. What is clear is that the US has closed the output gap and is hitting capacity constraints. The New York Fed's underlying inflation gauge rose to a 12-year high near 3 percent in December.

The great disinflation of the last three decades was essentially a global ‘supply shock’. The opening-up of China and the fall of the Berlin Wall added 800 million workers to the traded economy and labour pool, depressing wages and unleashing a tsunami of cheap goods. The ‘Amazon effect’ of digital technology capped price rises. The demographics of the baby boom era played its part by boosting the global savings glut.


The US Federal Reserve is reversing bond purchases.
The US Federal Reserve is reversing bond purchases.

But there was another feature that is often neglected. Central banks intervened “asymmetrically” with each cycle, letting booms run but stepping in with stimulus to cushion busts. The BIS says one result was to keep insolvent ‘zombie’ companies alive and block the Schumpeterian process of creative destruction that leads to rising productivity. This artificially stopped supply returning to balance. It has been a cause of the deflationary malaise.     

“Everything could now go into reverse: the baby boomers are gone; China's working age population is falling; and zombie companies are going to be forced out of business at last as borrowing costs rise,” White said.

While higher inflation is needed in one sense to right the global ship — since it lifts nominal GDP faster, and whittles down the debt stock — the obvious danger is that the shock of higher rates will hit first. Debt dynamics could spin out of control. Japan and Italy are in the firing line. The US has more margin but is being cavalier with fiscal expansion a l'outrance and no reform of its entitlement programmes.

“This raises the danger of ‘fiscal dominance’. The moment that markets start to fear this happening, it becomes totally self-fulfilling. They won't lend to governments and the whole thing basically implodes,” he said.

Central banks are now caught in a ‘debt trap’. They cannot keep holding rates near zero as global inflation pressures build because that will lead to an even more perilous financial bubble, but they cannot easily raise rates either because it risks blowing up the system. “It is franky scary,” he said.

The BIS critique is that ever-lower rates and more radical stimulus at the bottom of each successive cycle has itself had the complex effect of lowering the ‘Wicksellian’ natural rate of interest. Prosperity has been drawn from the future and led to a corrosive ‘intertemporal’ imbalance. In the end this catches up with you.

The authorities may not yet have reached the end of the road but this strategy is clearly pregnant with danger. Global finance has become so sensitive to monetary policy that central banks risk triggering a downturn long before they have built up the safety buffer of 400 to 500 basis points in interest rate cuts needed to fight recessions. Fiscal buffers are not exhausted but they are ever thinner.

“We are running out of ammunition. I am afraid that at some point this is going to be resolved with a lot of debt defaults. And what did we do with the demographic dividend? We wasted it,” he said.


__________________________________________________________________________

Ambrose Evans-Pritchard reported from Davos, Switzerland.

• Ambrose Evans-Pritchard is International Business Editor of The Daily Telegraph. He has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels.

__________________________________________________________________________

Related to this topic:

 • China promises bank rescue in next crisis as market prophets warn on rising US rates


http://www.telegraph.co.uk/business/2018/01/22/world-finance-now-dangerous-2008-warns-central-bank-guru
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« Reply #7 on: January 26, 2018, 07:44:38 am »

The banks have ripped off all of us for years i trust them about as much as i trust the people who said hillary would win the elections

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