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Economic Outlook

Trump Plays with Fire on Trade

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Posted by Peter Schiff - Euro Pacific Capitalapital

on Wednesday, 07 March 2018 06:45

Peter Schiff makes the case that probably inspired White House chief economic advisor, former Goldman Sachs president and free trade advocate Gary Cohn to resign from President Donald Trump's administration. Michael Campbell also disagrees with Trump in his passioned comment HERE - Robert Zurrer for Money Talks

Trump Plays with Fire on Trade

tariffs-steel-aluminum-860x450 cWith his announcement last week of broad tariffs on imported steel and aluminum, President Trump launched what could be the first salvo of an all-out global trade war. Seemingly itching for a fight, he gleefully tweeted that "Trade wars are good, and easy to win." It seems like Trump thinks the conflict will play out much like Ronald Reagan's 1983 week-long invasion of Grenada rather than the more telling quagmires that unfolded in Vietnam, Afghanistan and Iraq. He's wrong.

Apart from overestimating America's bargaining position, Trump and his supporters grossly misunderstand the nature of international trade and how Americans have benefited from a system that has allowed us to continually consume foreign goods on credit. While this "benefit" has also placed a cost on domestic industries, I don't believe that Trump has any idea how a trade war can reduce current American living standards.

As justification for his surprise offensive, Trump likes to highlight how America's gargantuan annual trade deficit (which has



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Economic Outlook

Foreign Investment into Canada Has Collapsed by 26% in 2017

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 06 March 2018 06:56

Martin Armstrong takes apart the steel tarrif's and their substantial impact on Canada, the largest exporter of steel to the United States. This all on top of the decline in investment in Canada's Oil industry. Martin also disentangles the market action around the world yesterday March 5th - Robert Zurrer for Money Tallks
canadian-dollar-C

Foreign direct investment into Canada has absolutely plunged during 2017 to the lowest since 2010. There has been an effort to stop the sale of any property to foreign investors mainly from China. On top of that, there has been also a collapse in capital investment into the oil industry. There are fears also rising about an exodus of capital from the nation’s oil patch and worries about the fate of the North American Free Trade Agreement (NAFTA).


Direct investment into Canada declined by a stunning 26% dropping to merely $33.8 billion during 2017, according to Statistics Canada. Capital inflows have declined for the second year with the major high in 2015 in accordance with our Economic Confidence Model. The investment that did take place was from reinvested earnings of existing operations. Net foreign purchases of Canadian businesses turned negative for the first time in a decade. This means that foreign companies sold more Canadian businesses than they bought. The political shift in Canada to the left is also being seen as a political risk for the years ahead. A monthly closing BELOW 7305 on the futures will signal the collapse of the C$ is underway once again.

....also from Martin: 

Canada Will be the Most Impact by a Steel Tariff



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Economic Outlook

Martin Armstrong: You May Soon Be Able to Regrow an Arm or Leg

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 01 February 2018 06:35

axolotl-baby-Salamander-1024x532The Mexican axolotl salamander can regrow lost limbs in a matter of weeks which includes the bones, muscles, nerves and the whole enchilada. When scientists sought to map its DNA to figure out how it does it, to their shock, it turned out to be more than 10 times bigger than that of human DNA. Indeed, it had 32 billion base pairs of DNA making it the largest genome ever sequenced, according to Nature.

The project has taught us a few new lessons. A gene called PAX3, was previously considered to be essential to the development of an organism. This gene was completely missing from the genome. Instead, the related gene PAX7 appears to have taken over those critical functions. What they discovered was several genes unique to axolotls and other amphibians that are linked to regeneration.

Well, they may be still decades away from regrowing limbs, but sequencing the axolotl genome was a giant step forward for mankind in decoding how this ability to regrow limbs can evolve and function. It may also lead to the development of new methods to heal wounds faster.

....also from Martin"

The Revenge of Martin Armstrong



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Economic Outlook

Productivity: A Question of Focus, Health, Politics & Money

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Posted by Axel Merk

on Thursday, 11 January 2018 06:53

Screen Shot 2018-01-11 at 6.58.36 AMLast week, I asked, “What would make 2018 more productive for you? Please email me the first thing that comes to your mind.” Before I summarize the responses, a big thank you to the 800+ people who sent me personalized responses. Someone pointed out that asking the question itself already helped because it motivated her to review her plans and targets. 

My question had been intentionally open, and as such, I received feedback on productivity ideas pertaining to both personal and professional life. In some ways, answers were all over the place, including numerous answers that I had no idea were somehow related to productivity. That said, as themes emerged, at times, I could sense some respondents have their productivity initiatives under control with others struggling. I’ll touch on the main themes below.



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Economic Outlook

Saxo Bank's Outrageous 2018 Predictions

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Posted by Saxo Bank

on Monday, 11 December 2017 06:18

Screen Shot 2017-12-11 at 6.27.01 AMWe’ve delved deep again this year in penning our annual list of 10 Outrageous Predictions. As usual, we roam the world and ride roughshod over consensus in sni ng out these supposedly highly unlikely events with underappreciated potential – events that could have tremendous implications if they come to pass. Enjoy! 

For 2018

- Fed loses independence as US Treasury takes charge

- Treasury enacts 2.5% yield cap after massive spike

- Bank of Japan loses control of its monetary policy

- USDJPY rises to 150 and then collapses to 100

- China issues CNY-denominated oil futures contract

- Petro-renminbi surges, USDCNY below 6.0

- Volatility spikes on sudden S&P 500 ‘ ash crash’

- S&P 500 drops 25% in spectacular plunge

- US voters push left in 2018 mid-terms, bonds spike

- US 30-year Treasury yields rip beyond 5%

- ‘Austro-Hungarians’ launch hostile EU takeover

- EURUSD to 1.00 after hitting new highs

- Investors ee Bitcoin as governments strike back

- Bitcoin @ $1,000

- South Africa resurgent after ‘African Spring’

- ZAR gains 30% versus EM currencies

- Tencent topples Apple as market cap king

- Tencent shares gain 100%

- Women take the reins of corporate power

- Female CEOs at more than 60 Fortune 500 companies 

....continue reading HERE



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Economic Outlook

Fake Tax Reform

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Posted by Peter Schiff - Euro Pacific Capital

on Friday, 08 December 2017 06:44

psAfter supposedly chomping on the bit for years to pass meaningful tax reform, Republicans are now set to blow an historic opportunity. Whatever version of the Bill that emerges from the House and Senate Conference Committee (which will be signed by President Trump faster than he can down a Filet o'Fish), will be far less than the Republicans envisioned when they finally captured the White House and both Congressional Chambers in 2016. But from what I have seen of the particulars, the revisions to the tax code will offer a marginal, although temporary, win for low income individuals, a major slap for moderately successful wage earners and home owners, (especially in the high tax Blue States) and a huge victory for the extremely wealthy and certain categories of business owners. While it is certain that the plan will add to the growing deficit, its immediate economic and political impact is hard to predict.

For generations, taxpayers and politicians alike lambasted our overly complex tax code for its myriad of economic distorting loopholes that seemed to produce nothing except employment for legions of accountants and tax lawyers adept at gaming the system. As a result, talk about tax reform has always included proposals to make the system simpler, fairer, and more transparent. But on that front, the Republican proposals fail miserably. Trump and Congress will hail this achievement as being a major victory for the American people. But the true winner will be the swamp that Trump promised to drain.



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Economic Outlook

8 Charts That Show How Insane the Economy Is Today

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Posted by John Mauldin - Mauldin Economics

on Wednesday, 29 November 2017 06:36

Since the 2008 financial crisis, there’s been a growing number of ridiculous, inane, and otherwise nonsensical economic interventions from our central bankers that fill the daily economic headlines.

I have gone from the occasional smile to scratching my head now and then to "WTF" moments.

All that said, the economists who designed these interventions had their reasons. They thought lower interest rates and liquidity injections would create jobs, spur investment, and eventually produce inflation.

Then the idea was to reduce the stimulus before inflation got out of control. The problem is that none of these wishes came true.

The Philips Curve That Doesn’t Work Anymore

The key gauge of central bankers for assessing this tricky process is the unemployment rate.

An economy at “full employment” is one in which inflation is right around the corner. The theoretical relationship looks something like this – chart from Gary Shilling.

Image 1 20171120 ME OP JM8

In fact, we now have very low unemployment, accompanied by stubbornly low inflation.

Why is that? No one really knows.

All sorts of theories are floating around, but none have yet proven helpful in restoring the Phillips Curve.

Here’s reality, via Gary Shilling:



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