POITOU, FRANCE – President Trump escalated the trade war yesterday, making a kamikaze attack on a vast armada of Chinese imports – $200 billion in total – headed for California.
The Chinese say they will retaliate.
Last month, we opined that the trade war wouldn’t go any better than Vietnam… or Iraq… or any of the feds’ other phony wars – against drugs, poverty, or terrorists.
It will be expensive, futile… and perhaps disastrous.
But that doesn’t mean it won’t be popular. Wars give the spectators something to live for – us versus them… good guys against bad guys… winners versus losers.
Their hat size swells as their champion wallops the Chinese. Their girth shrinks as he challenges and taunts the Canadians. Their manhood grows when the enemy gives in and admits defeat.
But while this puerile entertainment is taking place in the arena, the real action is going on in the expensive skyboxes, where the elite collude against the fans.
Wars shift resources from the boring and productive win-win deals in the private sector to the magnificently absurd win-lose deals of the feds and their cronies. The only real winner is the Deep State.
We saw our colleague, former U.S. budget chief under President Reagan, David Stockman, on TV yesterday. The interview was painful to watch.
He was bravely trying to explain the trade deficit and why it was caused by monetary policy, not by trade ramparts that were too low.
But the young, know-it-all newscasters were such numbskulls – so lacking in any experience, theory, or historical perspective – he might as well have been instructing a walrus on how to chew gum. The lesson was in vain.
The three TV experts saw no problem with the trade deficit… and no danger approaching from Trump’s war on it.
If there were any clouds on the horizon, they didn’t see them; if there was any thunder, they didn’t hear it; whether lightning was striking the light posts near them or not, they had no idea. They wouldn’t even look out the window.
Instead, they seemed eager to get Weatherman David out of the studio so they could go back to their bubble chatter.
They were so confident… so vain… and so dismissive of all risk…
…we thought we heard a bell ringing.
The bell, of course, was the one they don’t ring just before the market collapses. They don’t ring it because they are all sure that nothing could go wrong. And there hasn’t been any real trouble for so long that they’ve forgotten where they put it.
Trade deficits have been growing ever since the U.S. went off the gold standard in 1971 (while tariffs have been going down!).
The stock market has been going up (with only three significant slips… in 1987, 2000, and 2008) since 1982.
The bond market, too, has been rising since 1980 (though it probably topped out two years ago).
The current GDP expansion has been going on since 2009 – and is now the second-longest expansion in history.
And the USA has been a going concern, growing in power and wealth since 1781, when the French beat the English at Yorktown, Virginia and thereby rescued the American Revolution.
All of these trends – except the current economic expansion – are older than any of the three bubbleheads David confronted on CNBC. David had to give them a “heads up” on trends: “They go on until they stop,” he warned.
We could practically hear the cackling of the market gods as the twits on TV assured David that nothing could go wrong:
Will the economy suddenly tip into recession? Will the stock market crash? Will the bond market sink?
Yes… most likely… all of those things will happen.
But what will set them off? What trick will the gods play? What trap will they set? What surprise have they got waiting for us?
We don’t know. But the trade war gives them more to work with.
Tariffs on lumber coming from the evil Canadians are adding about $9,000 to the cost of a new house, according to the National Association of Home Builders.
Washing machine prices have jumped some 15% this year, the fastest increase ever recorded by the Bureau of Labor Statistics.
As for auto prices, CBS News reports:
Consumers may see an average price increase of $5,800 if a 25 percent import tariff that Mr. Trump has threatened goes into effect, according to estimates cited by the Alliance of Automobile Manufacturers (AAM), a lobbying group for carmakers.
That’s a “$45 billion tax on consumers,” the group said, citing an analysis of Commerce Department data.
Automotive news website AutoWise says the top 10 best-selling automobiles will see price increases from $1,000 to $3,600.
Farmers are getting hit hard, too.
The American Farm Bureau says it expects farm incomes to drop to a 12-year low this year, largely because of the trade war.
An agricultural economist at Purdue University, Christopher Hurt, added that 1,000 acres of corn and soybeans would have made a farmer a $42,000 profit on June 1. Now, it could net him a $126,000 loss.
Still, small potatoes? Maybe.
They don’t ring a bell when the end comes. But they do put bubble-brains in front of TV cameras.
By Jeff Brown, Editor, The Near Future Report
Whenever you connect to the internet on your computer, smartphone, or smart TV, a vast physical infrastructure makes that connection possible.
For instance, there’s a 500,000 mile-long network of fiber optic cables beneath the Atlantic and Pacific Oceans. It carries most of the world’s internet traffic. These transoceanic cables connect to vast land-based fiber optic networks, which in turn connect to consumers’ homes and businesses.
Over the years, this massive network has evolved. Companies and governments built new infrastructure to support the next generation of wireless connectivity.
We built out the 1G (first-generation) network in the 1980s. Compared to what’s possible today, it didn’t allow you to do much. You could only place voice calls – there was no layer for carrying other types of data. And you had to use one of those brick-sized cell phones Gordon Gekko yaps into in the movie Wall Street.
Then, in the 1990s, we got 2G. Now, you could send and receive emails and text messages.
And in the early 2000s, 3G brought faster connection speeds. The quality wasn’t always the best. But for the first time, you could stream video and audio.
Finally, we got the network we use today – 4G. It went live at the start of this decade.
But today’s 4G network faces a problem. It can be summed up in one word: data.
Both consumers and businesses have a seemingly endless thirst for consuming and sending more data over wireless networks. The chart below shows the amount of data and voice traffic over the world’s wireless networks since the third quarter of 2012.
In the third quarter of 2016, we sent roughly seven exabytes of data per month. An exabyte is equivalent to 100,000 times all the printed material in the Library of Congress. All the words ever spoken by human beings can be contained in five exabytes. It’s hard to get your head around.
But a year later, we sent nearly 12 exabytes of data – a month. That’s an annual growth rate of about 70%. And data traffic is expected to double in the next 18 months.
What does this look like for internet users?
Have you had a dropped call in the last 12 months? Or how about when you dial a number, and someone picks up, but you can’t hear them? Has the internet been slow to download a web page? Can’t seem to download or send your email?
These issues are almost always due to network congestion. Just like when there is a traffic jam on a highway and the cars aren’t moving… there can be too much data on a wireless network – and the digital packets of information just can’t get to where they are intended to go.
And it may surprise you to learn that this problem is rather unique to the U.S.
With an average download speed of 10 Mbps (megabits per second), the U.S. has some of the slowest internet speeds in the world. We’re in 50th place, behind Romania (at 27 Mbps) and Finland (at 17 Mbps). Even Dracula and the reindeers have internet speeds faster than most Americans.
Why is this such a big deal?
At an economic level, it is a significant competitive disadvantage. Work and digital services are mobile these days. Many companies have a “mobile first” strategy that prioritizes access to products or services via mobile devices like smartphones.
More and more business is conducted online, and productivity is dependent on having reliable internet access. America’s overloaded 4G networks could soon pose a serious threat to the economy’s ability to keep pace with the rest of the world.
– Jeff Brown
P.S. America’s 4G networks are in dire need of updating. But here’s the good news: Help may be on the way.
In January of this year, President Trump made a very unusual move. Much of the mainstream press called the president’s proposal “dead on arrival.” But I think there was an unseen reason why the White House did what it did. It will lead to a much-needed upgrade to our nation’s wireless networks. And it could secure America’s economic dominance for decades to come. I put together a brief video presentation with the details right here.
China May Be Running Out of Options
As Bill reported, President Trump threatened to impose a new round of tariffs on $200 billion worth of Chinese imports. The Chinese vowed to retaliate. But this time, it may not be with tariffs…
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A recent article from The Wall Street Journal claims that bitcoin’s meteoric rise in 2017 was partly due to financial manipulation. But renowned cryptocurrency expert Teeka Tiwari shows what the papers failed to report…
SEC Slashes Its Whistleblower Programs
As part of the Dodd-Frank reforms following the financial crisis, Congress imposed a series of whistleblower programs on the Securities and Exchange Commission (SEC) to prevent future catastrophes. But now, there’s evidence that the SEC may be quietly dismantling these programs…
Thanks for another succinct summation of the dire straits in which America finds itself, Bill. Not only is Trump aiding and abetting the destruction of the American economy and the U.S. Constitution, his propaganda machine – consisting of Fox News and Sinclair Broadcast Group – vomits forth the “fake news” pabulum upon which his rabid red-caps feed. Perish forbid they should crave the truth!
For them, the only truth comes from the Donald. And all intelligent and reasoning persons know that he spews only lies. Say… am I the only one who has made the connection between Trump’s incessant lying and the fact that one of Satan’s monikers according to the Catholic rite of exorcism is the “Prince of Lies”? Just saying…
– Dale A.
Are you calling Rudolph Giuliani a clown? If so, then, like a lot of millionaires before you, you consider your success in finance to give you wisdom in politics. You call the people what you will, but I like our president and all his staff. I think he could improve it, but it is several light-years ahead of what occurred under the last bird to occupy that office.
– Mitch H.
What is this economy based on? All one has to do is look at what’s being advertised on television: insurance, insurance, insurance. They call this a “service-based economy.” And what is the service? Protection money (and interest on rag money).
No products are produced. The customer pays for the “service” because he has to have it, but he generally gets nothing in return. At the end of the year, the money he has paid for the service is gone – and he has nothing to show for it.
– Don P.
Your observations about Deep State control are so true – and so scary. It used to be that we elected politicians to help us live our lives to the best advantage. Now, we elect politicians to tell us how to live our lives. We, the people, have given up control of our lives, in many aspects at least, to those who “know better.” Or we hope they do, anyway.
Modern technology has “improved” our lives to the point that we sort of don’t know what to do with ourselves anymore; so we want someone else to “parent” us – someone who “really understands.” But those we elect are actually in the same place as the rest of us. Since the only thing they have some understanding of is parenting, that is what they do – and we respond by re-electing them.
Many people are content to have someone else tell them what to do most of the time. If they bother to vote at all, they vote for the one who seems most attractive and promises the most – even if the pretty promises are empty ones. The original meaning of the word pretty, after all, is tricky or deceitful.
– Chuck B.
Meanwhile, Bill’s rules for weddings draw praise…
Wouldn’t it be wonderful if all people planning to get married would sit down and read what you have written? Weddings are getting so out of control and held in weird places. I certainly emphasize the tone of the music that is played at some of these weddings – very inappropriate. Thank you for reducing these suggestions to writing. I hope many people take them to heart.
– Antoinette B.
Your wedding instructions/thoughts are excellent. As a young minister in a large church, one summer, after the senior pastor resigned, the Christian education minister and I, the campus minister (youth guy), divided up the pastoral duties – he took the funerals and I took the weddings.
Of course, anyone in the church could request whomever they wanted to perform whatever service they desired. But for those folks who just wanted to have the church perform something, that’s how we divided the responsibilities. We both did the appropriate counseling with each service. So often, the young couple getting married wanted to do something “new” and not traditional.
My wedding service came from an old service book and I did not change what I did; sorry, newness. I considered the wedding to be a very important event, and the words said were, therefore, also important. So the old and good words rang true for me, and provided the basis of some of my pre-marriage counseling for the couple – what they were signing up for.
So thank you for speaking clearly and lovingly about what a wedding is, and for giving good instructions that I wish I had those many years ago. Well said and well meant.
– Richard S.
Why is Wall Street now investing billions of dollars in cryptocurrencies?
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