01.10.2022

“Seven” doesn’t want to be “six” trump

Tomorrow, the Federal reserve is widely expected to raise the rate on Federal funds, bringing it in close to neutral range of 1.75-2.0% per year: this event is considered now trades on the Chicago futures exchange CME with probability of 91.3%.

And the very next day, 14 June, the European Central Bank may bring final clarity in the timing of the completion of the “work” to the end of this year, “the printing press”, as many call lasting from 2015 the period of ultra-loose policy, including large-scale buying of bonds in the funds of the Central Bank.

“However, both of these events somehow pale in impact to the markets amid outstanding statements and speak for themselves the photos already took place at the weekend in Ottawa (Canada) important meeting of heads of the “Big seven” – says our expert, chief analyst GK TeleTrade Peter Pushkarev. – Just look at this photo, where the leaders of the 6 countries is literally, attacking, was surrounded by trump, clearly demanding that he make concessions and return to a more user friendly steps in the economy is all sorts of humiliations and trade barriers – have accumulated!

But, obviously, in vain: he only sits with with crossed arms – perhaps partly in a protective position and yet like the king or master of the situation before disturbed asylum. And all kind of trump says: “I know nothing, do what you want – promised its elites and its voters behave, and so do all of you saying that it will, and you are who? I’m doing you a favor, that I’m listening.”

But in General, of course, oil painting. The relative calm, thoughtful attention and a minimum of excitement shows is that accustomed to maintain equanimity in all circumstances, the Japanese delegation may still believe that even with such a trump is better to be friends and not go against him. In General, the “Big seven” is clearly not willing to be the “six” of the USA and personally trump. She may even be ready to again become “eight” to include the following mandatory politeness and pauses Russia, or stick solely to the meetings and the line of “twenty”. It’s better than to fulfill every whim and different persistent requests from overseas, which is more like the orders. While by and large orders and do not discuss with anyone in a respectful and serious tone, even at the stage of preparation of the orders and making the trade rules for unilateral decisions, at least apparently not favorable for most partners, and even friends of the United States

Trump, if released during the meeting of “seven” comments, the caustic – to the Prime Minister of Canada, the nearest neighboring country USA and the mistress of the G7 summit. Trump has accused the canadian Prime Minister, even in a lie or perhaps if you take a little softer, the distortion of facts, making it clear that that was wishful thinking, at least speaking about the formal consent of the trump expressed in several paragraphs of the opinion of the rest of the participants. Trump also said that any outcome document of the “seven” he does not agree, under any kind of paper on the principles of free trade, or something like it subscribe not going. And flew for a few hours before the end of the summit in General in Singapore to Kim Jong Ynu: you might think that to arrange to meet with him in advance for half a day later was unreal.

“Fun” fact started long before the G7 meeting. About the British Theresa may, the American President even for a couple of days said to meet her separately at the G7, he is not going because she “acts like a teacher”, supposedly no one has good relations, but relations with Washington uses only to his advantage. And on may 8, when Donald trump, in fact, a spat with a high bell tower on the opinions and objections of all European allies, and alone out of a deal with Iran. Thus, trump has left the whole of Europe at a loss to deal with a serious problem, which is better? The option to trade with Iran, as traded, profiting plus honestly obeying fixed document political commitments of their countries to Iran without any restart of Iran’s nuclear programs, but risk to run into billions of dollars in fines from the U.S. Treasury that have already taken place in the recent past. Or, “listen” trump and suffer losses from the collapse of transactions, and in the future may not only be with Iran, to substitute its business reputation, but to stay true to an unspoken Alliance obligations to the States that Europe is supposedly in the framework of NATO to protect from all troubles, but need for this protection more money.

In either case, European politicians and businessmen are, to put it mildly, in an awkward situation, and tried to convey to trump visits in the United States and Frau Merkel and Monsieur macron, but to no avail. And if Angela Merkel trump at least behaved correctly emphasized publicly, from the shoulder of Emmanuel Macron, the American President himself while reporters and television cameras to shake anyone except trump invisible piece of dandruff, showing how the proximity and friendliness, but still, I think, rather humiliating his French counterpart. By the end of may it became clear that neither Merkel nor the Makron no smiles and arguments and failed to convince trump to do for their native allies then at least the exception, freeing Europe from the duties on steel and aluminum. Losses and political, and quite tangible financial, came from 1 June, it turns out, this side.

Clearly this position trump as the official leader representing the state, the elites and the people of the United States, only repels from the other countries of hope for the economically successful contact or at least build further hope for a politically convenient and strong Alliance with the United States. So, undermines the very foundations of the settlement system through the dollar and reserve accumulation maximum through U.S. treasuries. And thus creates a potential danger in the future and for the fate of the giant us debt.

Of course, acting on the principle of America First, trump is absolutely right from the point of view that he will be okay, hounding me all the cost on their trading partners, to reduce the US trade deficit. Because now, trading every month by gravity to this deficit is added an average of more than $50 billion, that is, in any case is more than $0.5 trillion per year. And if trump is President of national-oriented elite groups, he would have something to do, as he promised Americans during the election battles. And he is absolutely right in that the US is really fed and kept at his own expense halfway around the world – only here the problem is that the half of the world feel the situation is exactly the opposite, so half the world is fed and contain America past half century at least. And also fair.

Because there is, in fact, two Americas. One feeds all of America is a national economy and the citizens, the taxpayers of the United States. And she is now bad, so she chose trump. And the other half of the world America really contain and feed understand what and why. And international financial dollar system that support infinite, or so it would seem, the status of the dollar as the world reserve currency, which is virtually anyone still the currency, but that’s just not American. So there’s a version at least maybe two. Either trump is acting out and as a result, the second America (the world system), he unwittingly undermines and demolishes. Or he does it consciously and with the virtuoso artistry that is probably less, but I would not say too, that is completely impossible – and then he’s a genius, returning America to Americans, but familiar to all bleeding America to the rest of the world.

Anyway – the result is obvious. European leaders in public speeches increasingly began to remember the need to avoid, where possible, dollar settlements that do not fall under the “extraterritorial” sanctions imposed unilaterally the US, but in fact concerns all countries without exception – simply because of the status of the dollar and because of the scale of the trading partnership with the US and the US market for the same in Europe, and for many others who can not afford not to do business with America – it’s business. But even many of the businessmen start to think about very much. Yesterday was problem with the US new plants, as the new policy trump stimulates to produce and sell in the United States. The United States today it became unprofitable to trade metals, and that will be unprofitable tomorrow – maybe all of it? And isn’t it better to pay more attention to those Asian markets “led” with the Chinese, because they are already on the economic weight higher and do not create such extreme problems do not create such barriers. And no Chinese or other Asians, anyone in the American scale do not build under the line – they do not have any lines, in addition to purely economic benefits.

But if the restructuring of trade relations business and politics only begin to think seriously, here on the system based on the dollar calculations have, in principle, understood. And start to slowly leave her. Therefore, growing for the second year actively of U.S. “treasuries”: a smaller percentage of the Trump and the United States to give money already, the world is not ready. Therefore, the dollar wobbles and sways, and the money will increasingly go to Asia, to Europe, despite several rounds of raising US interest rates, especially long-announced and have been incorporated in prices. What’s the point to gain another 0.25-0.5% in rates if you can lose in the end and the dollar, which fell from January 2017 with more than 10% and will lose out in reliability and predictability. That’s not really the dollar rising in response to ostensibly good news from the US economic statistics including inflation, and not reacting particularly the growth of the dollar on domestic interest rates. As much as I could in April and may the dollar strengthened. However, most likely, and this spring the strengthening of the dollar, and some outflow of funds from emerging markets will be a temporary setback, lifetime which will be reduced even more than before will go to less soft policy Europe and other countries. Europe is ready to make your steps away from the “printing press” this summer – either June 14 or July 26, recall. These terms of expectations and in the coming days or weeks or to speed up the withdrawal of investors from the dollar, or at some time delay in the withdrawal from the dollar, but it is unlikely someone will be able to cancel the renewal of the anti-dollar trend this year at all.”

Leave a Reply

Your email address will not be published.