North Korea’s the keystone to China trade success

As I wrote recently, the Trump administration is making great strides in dealing with China and that a deal will happen.

So news broke Sunday that the US has suspended implementing the new tariffs scheduled for March 1 while continuing talks.

The ongoing North Korean talks figure prominently into this equation.

The loop-sided trade deals we have with China are so bad that the US could get many concessions and China will still have the upper hand on trade imbalances.

The Chinese have agreed to buy additional agricultural products including soy beans, not as a concession, but because they cannot source enough crops elsewhere to feed their people.

Global stock markets — with its typical knee-jerk reactions — jumped on the news of Trump delaying the tariff tiff. Just as the markets fell numerous times on bogus news that the draconian tariffs would kick in.

Now how the Trump administration is using North Korea as the keystone in its China trade talks are taking two tracts.

One the US trade representatives are telling China officials that Trump will open up North Korea to be a far cheaper manufacturer of American products, if we do not get fairer trade movement. However as a result it will put an end to North Korea hostilities on the Chinese border as the North Korean economy improves.

Secondly, the Trump team is pointing out to North Korean leader Kim Jong Un that his country will be able to thrive as the new American factory country just like his neighbors to the south.

These maneuvers come from someone with a business background, which is why the president snidely tweeted (below), “But thanks anyway!” to those who could not get this done over the last twenty years.

 

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Following the money from the Fed to Middle East and back again

Tuesday we were reminded about the huge cache of cash that was funneled from the US to Iraq and later Iran after US forces secured the areas earlier this century.

How the New York Federal Reserve bank — the first among equals of the 12 regional banks —¬† shipped billions of dollars in physical cash shrink-wrapped on pallets to Baghdad to pay allegedly for the reopening of the government and restoration of basic services.

The Bush II White House sent cash weighed 363 tons reportedly loaded onto military aircraft in the largest money shipments ever made by the Federal Reserve, said Rep. Henry Waxman, chairman of the House of Representatives Committee on Oversight and Government Reform in 2007.

Similar shipments were sent to Iran. This time the payments were categorized by the Obama administration as interest to resolve a decades-old dispute over an undelivered military sale. A $1.3 billion payment was sent to Iran two days after the Obama White House allowed $400 million in cash to fly to Tehran from the Federal Reserve in early 2016.

In order to perhaps cover their tracks better with Iran, the Fed Reserve made the disbursements in 13 separate payments of $99,999,999.99 and final payment of about $10 million to avoid further detection by keeping the individual transactions under $100 million.

With little accountability, where does this cash wind up? The post suggests that some may be brought back to differing political campaigns and “charitable” foundations to further agendas. It’s not one party doing this, it’s all parties exploiting the citizens.

So the drop begins by asking what happens when an outsider becomes president and asks for information on this theft of taxpayer money and wants to change how we go about funding our country?

The two most recent presidents to question the true purpose of the central bank — John F Kennedy (assassinated) and Ronald Reagan (assassination attempt) — tells you exactly what happens.

While reports on attempts to take the life of President Trump may be highly classified at this time, some have come out. A presidential motorcade driver in Florida with a hidden handgun arrested by Secret Service, A man arrested last month trying to secure an anti-tank missile to fire at the White House and a rogue missile being fired and intercepted while Air Force One is flying to Asia for meeting with North Korean leader Kim.

The President has made no bones about his dislike of the Federal Reserve system and how it operates for private owners under the guise of being part of the government. While the central bank may return some annual profits to the Treasury Department, that comes only after stakeholders receive their healthy dividend.

It’s insiders vs an outsider. It’s about retaining control vs. losing it, the drop says.

Is Wall St. behind the border wall stonewalling?

Let’s look at an alternative view of why the Democrats are fighting so hard to not fund the Mexican border wall.

As I have written before $5-$6 billion in funding is equivalent to running an aircraft carrier¬† group for a week, so it’s not about the money.

Let’s look at the principals behind this stonewalling (pun intended). Sen. Chuck Schumer is the voice of Wall Street banking in the Senate. Rep. Nancy Pelosi has Silicon Valley just to her south. In this matter it’s the newer financial products, which allow digital transfers, that have a vested interest in cross-border payments.

What would a wall do to the money flows over the border? How would the wall change cash inflows to the US banking system?

President Trump in his Oval Office address last week said: “The border wall would very quickly pay for itself. The cost of illegal drugs exceeds $500 billion a year. Vastly more than the $5.7 billion we have requested from Congress.”

Well all that cash winds up in the US banking system eventually.

So between legal and illegal trading profits moving over the border and US banking firms counting on that additional liquidity to fund other revenue streams, you could make a case that larger forces are at play over the funding of the wall to keep the status quo.

This explanation makes more sense from the point of view of the protracted stalemate going on right now.

What’s that old expression? Follow the money.

Chinese Apple news is hard to digest

So as I wrote yesterday about the Trump Administration’s hard-line on tariffs with China and its muted effect on US firms.

Well Apple CEO Tim Cook gave the company’s first earnings warnings for the this quarter. Cook cited the slowing Chinese economy, the strong dollar and other economic headwinds. Cook neglected to mention directly that the company is having big troubles trying to sell iPhone models retailing for more than $1,400.

Apple makes good products, but the product line is limited. If you keep bolting new gear onto an older product and jacking up the price, then you will see consumers uninterested in these upgrades.

As my son — soon to be a finance graduate — cited Wednesday night when we were discussing this said: “Apple walks the fine line between utility and luxury,

Well clearly the luxury aspect is suffering since the high-end models are not selling and consumers are keeping their older phones much longer — cracked screens or not.

As the Chinese economy repositions itself an equal trading partner without all the beneficial pricing power it enjoyed from lopsided trade agreements over the last 30 years there will be some pain. But that certainly is better — in the long run — than continuing the status quo.

Maybe the Chinese economy has taken a step back in its progress and many can’t afford $1,400 iPhones or even a $1,000 model. That’s on Apple to come up with a different plan or product for the market.

While I see this as an Apple problem, the stock market will sell off roughly 300 Dow points again on the open Thursday morning on the earnings warning.

I recall something about a butterfly flapping its wings over the Yangtze River and Wall Street feels the storm. It should be short-lived however.

US market’s Chinese take out fueled by globalists

US stock futures are suffering a continuing hangover after Monday’s 265 Dow point rise. Dow futures are looking at a 300-point decline at the open.

Pundits cite China’s slowing economy. How can these analysts not understand that China’s economy is slowing because of the Trump’s Administration’s tough stance on trade.

The Chinese have for decades relied on such favorable pricing on goods sold in the US there was never a reason to employ proper business processes. Merely loading a ship with iPhones or steel guaranteed big profits. This is the new normal when it comes to Chinese economic growth.

So the tariff crackdown to level the trade playing field will have to run through a few quarters to get year-over-year numbers showing slowing growth to get Wall Street’s attention. The Street is not looking at US firms, which are benefiting from the more balanced trade situation.

The globalists are also playing up a slowing China as being catastrophic for the US economy to get Trump to back off from punishing their investments in Chinese firms.

Playing hardball with China on trade, on stealing technology, on Taiwan are all good tactics to benefit US firms and Americans in general. Don’t tell me China’s economy is more important than the US for world economic growth.

The US drives the world economy and the sooner Wall Street eschews the globalist’s sky is falling narrative, the better for all Americans and US stocks.