Thursday, August 9, 2018

When dogs misbehave, they need to have their nose rubbed in something they don't like. The running dogs of tyranny are having a bad day, and I like it.

Over the weekend, Trump claimed on Twitter that the US is winning the trade war with China for one simple reason: whereas US stocks are back to all time highs, the Chinese market has tumbled and remains mired in a bear market. Now, another - less naive - indication has emerged suggesting that the US is indeed getting the upper hand in the ongoing trade feud: according to Reutersthe trade war with the United States is "causing rifts" within China’s Communist Party, with some critics saying that China's overly nationalistic stance "may have hardened the U.S. position."
While China's President Xi still retains his undisputed grip on power, some have noted an unusual surge of criticism about economic policy and how the government has handled the trade war, revealing "rare cracks in the ruling Communist Party." Specifically, Reuters notes that the backlash is being felt at the highest levels of the government, hitting a close aide to Xi, his ideology chief and strategist Wang Huning.

China is presented in the media as a colossus, and they do have a large economy, but they in truth are a brittle society with an illegitimate government.  Remember how President Reagan suddenly brought down the Soviet Union, another very brittle society, with similar pressure, to the shock and astonishment of all the elites?

Emerging Market currencies are down broadly but the biggest losers (for now) are the Turkish Lira (record lows) and Russian Ruble (20-mo lows) as both suffer from US government actions.
The grip of bears on Turkish assets tightened as the nation’s souring relationship with the U.S. added to investor concern over authorities’ inability to put a lid on inflation, sending its currency to a fresh record low and driving up bond yields.
The development “raises the odds that the U.S. will double down on their sanctions” and adds to the “domestic challenges that plague lira-denominated assets,” analysts including Michael Every at Rabobank in London wrote in note to clients.
At least for now, the message is "don't mess with Trump/America," which is the polar opposite of the message sent by the previous administration.   The tyrants around the world are learning not to toy with the dominant world power when it is led by an alpha male silverback.

4 comments:

  1. You can see how the Deep State would hate President Trump. The Deep State, as it's called these days, has a vested interest in a weak and essentially helpless America. President Trump has upset the apple cart by MAGA and all of the filthy deals that treacherous Americans cut with foreign potentates to loot the USA three ways from Sunday are being flushed.

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    Replies
    1. The faster we flush them, the better.

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    2. flush twice, to be doubly sure..

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  2. Speaking as a dog trainer, rubbing their nose in it is no way to train a dog... it's good for liberals, though.

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