Trade Confusion, Asia, And The Dollar. Wake Up For The Most Important Financial Moment Of Our Lives.

Asian gold demand goes exponential.

At the same time as US debt has also gone exponential.

Trump’s Disastrous Trade Policies Can only Accelerate The Trends

G20 Dumps Free Trade At Trump’s Insistence

US Investors Pile Into US Equities At The Fastest Rate And The Highest Valuations In History

US equity investors are cocooned by extreme financial engineering and generally blind to the underlying reality

 “It showed that total earnings on a 12-month trailing basis in Q4 2016 were stuck at 2011 levels, though the S&P 500 index had soared 87%.”

Long Term US Growth Is Now The Weakest In History, Going Back To 1850!

Wake Up. The Most Important Financial Moment Of Our Lives. 

Even as Dollar creditors Have Already Begun Selling Dollar Assets

What Could Go Wrong? How much will Asians support the dollar now?

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Asian gold demand goes exponential.
Over the last decade Asian accumulation of gold has gone exponential. It now absorbs most of the global production of gold each year.
At the same time as US debt has also gone exponential.

In the US there is also exponential growth occurring, but in government debt. Don’t worry the debt ceiling will soon be gone.

0217FederalDebt

 

 

 

 

 

 

 

 

 

 

 

 

 

Trump’s Disastrous Trade Policies Can only Accelerate The Trends

The Asian’s clearly have seen the necessity of hedging their massive trade and wealth generation engine with a back stop should the dollar debt and trade system hit the rocks. Now that Trump’s disastrous trade policies are being put in place the move by the Asian’s away from the dollar seems likely to accelerate further.

G20 Dumps Free Trade At Trump’s Insistence
“You cannot slip a thin sheet of paper between the fallacies behind modern protectionism and those of the disastrous Smoot-Hawley Tariff Act of 1930.”

“President Trump’s declared trade policies will be economically destructive, not just for America’s trade partners, but also for America. “

“We have moved from sound to unsound dollars as the currency of trade, and their value today is not ultimately decided by the government, but by the markets which will find its quantity too great for its purpose. It then becomes a certainty that a decline in the volume of cross-border trade will end up with the mass redundancy of the currency in which it is settled, undermining its value.”

“With the election of President Trump, the chess-board has changed. However, through forward planning, China’s focus has already moved elsewhere, and while American tariffs against her exports will hurt private sector businesses manufacturing in the region, at the state level China has plans in place that will absorb the resulting unemployment. Her trade with the rest of Asia, which is her new focus, is already overtaking her exports to America.”

“China’s overall concerns must now centre on the value of the dollar component of her reserves, and the knock-on effect on the other currencies she holds therein, particularly the euro. China’s leaders can surely see that there is a causal link between the level of global trade and the quantity of dollars possessed internationally. Reduce global trade through tariffs, the excess dollars will be sold and decline in value.”
“The monetary dynamics are building up to replicate the conditions that led to the abandonment of the $20.67 dollar peg to gold in 1934. At that time, the bulk of the world’s gold reserves were in the possession of the United States. This time, they are in the hands of China, in undeclared form. The transfer of wealth from America to China through the mechanism of the gold price will be accelerated by America’s mistaken attitudes to global trade, set to repeat the mistakes of Hebert Hoover and of the Smoot-Hawley Tariff Act which he signed into law.”

https://wealth.goldmoney.com/research/goldmoney-insights/why-free-trade-is-officially-dead
US Investors Pile Into US Equities At The Fastest Rate And The Highest Valuations In History

0317SPYinflowextremesUS equity investors are mostly cocooned by extreme financial engineering and generally blind to the underlying reality

“I previously dissected the lack of growth in total adjusted earnings – not earnings per share, but total earnings for the S&P 500 companies. Since this is not a per-share metric, it excludes the effects of financial engineering, such as share buybacks.

It showed that total earnings on a 12-month trailing basis in Q4 2016 were stuck at 2011 levels, though the S&P 500 index had soared 87%.

So financial engineering – share buybacks to reduce the number of shares outstanding – works, kind of: It made the results look less terrible. But even these expert financial engineering methods, at a cost of $1.7 trillion, couldn’t doll up results enough to show any kind of earnings growth over the past three years.”

http://wolfstreet.com/2017/03/ 20/sp500-eps-stagnate-despite- share-buybacks-non-gaap- reporting/

0317US-SP500-adjusted-EPS-2007-2017-03-16

 

 

 

 

 

 

 

 

 

 

 
Long Term US Growth Is Now The Weakest In History, Going Back To 1850!

The chart below shows the chronic weakness of the US economy. The weakest by far going back to 1850.

0317GDP-RealGrowth-backto1850

https://realinvestmentadvice. com/the-long-view-rates-gdp- challenges/

Wake Up. The Most Important Financial Moment Of Our Lives. 

So growth has never been weaker in US history. US Stocks have never been more expensive. Financial engineering has never distorted markets by this much before. Ho Hum … your financial advisor says ……

Has your financial advisor explained this predicament to you? Do you think he should? Do you think that someone should maybe ring the alarm bells to get you to pay attention? Do you think that it could be important to not only understand the situation, but create a strategy? What is it going to take? Are you going to wait until afterwards to see what happened? Do you really think this can continue for another 5 to 10 years? Are you clear why somehow you can ignore these unprecedented extremes?

Even as Dollar creditors Have Already Begun Selling Dollar Assets

0217uscreditorswalkaway

 

 

 

 

 

 

 

 

 

 

 

 

http://chrisbelchamber.com/ global-creditors-leave-the- dollar-central-banks-continue- buying-gold/

What Could Go Wrong? How much will Asians support the dollar now?

The history of money is dominated by empires finding an expedient economic solution through currency debasement. At some point, however, trading partners start rejecting the currency and make other plans. Demonizing them only makes matters worse.
http://austrianeconomics. wikia.com/wiki/Money_and_ banking_in_Ancient_Rome

In today’s world the Asians no longer have any illusions about the destiny and value of the US dollar. Their plans for economic self-preservation are well advanced. The latest G20 meeting and the constant rhetoric from the Trump administration can only confirm their long held concerns. Do you think that Asians are about to become more or less willing to own US dollars?

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