This is supposedly make or break week—the inflection point when the Donald performs an ultimate art-of-the-deal stick save during his meeting with Xi Jinping at the G-20, and Wall Street gets back to its god-given right to prosper forever and ever by buying the dip.
Folks, it’s not going to happen because America’s egregious $800 billion merchandise trade deficit with the world generally and its truly hideous $375 billion bilateral imbalance with China in particular have nothing to do with trade deals—good, bad or indifferent.
To the contrary, the entire trade disaster—–the part that the Donald is absolutely correct about—is the by-product of a rotten monetary regime that has enveloped the world economy since Nixon shit-canned the Bretton Woods gold exchange standard in 1971, and thereafter Alan Greenspan launched the world into Keynesian monetary central planning after October 1987.
We have no idea, of course, as to whether the Trump/Xi encounter on Friday will end in a bang or a whimper.
That is, in a complete collapse of negotiations now and a 10-25% tariff on $567 billion of Chinese goods in January; or a kick-the-can arrangement that temporarily freezes the current 10% level of tariffs on $250 billion of Chinese goods and enables further desultory negotiations that eventually led to the same catastrophic end game—–a lapse into worldwide protectionism that shatters the great central banking bubble which at the end of the day put Donald J. Trump in the Oval Office.
Accordingly, we here begin a multi-part series aimed to demonstrate that there will be no MAGA for the Donald or America until today’s rotten regime of Keynesian monetary central planning is finally and fully extinguished.
In the interim, the global trading system will remain at the mercy of the one-man wrecking crew still domiciled in the Oval Office. In fact, the hand-writing has been on the wall at least since that weekend last spring when the Donald’s unvarnished delusions about global trade erupted in a tweet storm during the Oscars.