Economic Doom: China Says That There Will NEVER Be A Trade Deal Until The U.S. Agrees To Their Demands

Unless someone backs down in a major way, this trade war is going to last for a very long time, and the Chinese have made it exceedingly clear that they are never going to back down on the core issues.  So that means that the only way out is for President Trump to back down, and with an election looming in 2020, his advisers are telling him that now is the time to be very tough with China.  Bernie Sanders and other top Democrats have staked out positions that are just as tough on China as Trump is being, and so if Trump backs down now he will be absolutely hammered by the other side for being weak.  But if investors become fully convinced that a protracted trade war is in our future, that could be enough to set off a new financial crisis and throw the global economy into a tailspin.  It definitely looked like we were headed for a major economic downturn anyway, and so this trade crisis could certainly be more than enough to push us over the edge.

In a very rare move, the Chinese have publicly revealed what it is going to take for a trade deal to happen.

According to Vice Premier Liu He, China has three key demands that must be met

In a wide-ranging interview with Chinese media after talks in Washington ended Friday, Vice Premier Liu He said that in order to reach an agreement the U.S. must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand, and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.

Liu’s three conditions underscore the work still to be done if an accord is to be reached between the world’s two largest economies. President Donald Trump’s administration told China it has a month to seal a trade deal or face tariffs on all its exports to the U.S.

That first demand is definitely “a sticking point” for the Trump administration.

In fact, the Trump administration has been adamant that the removal of current tariffs will not happen until the Chinese show that they are following through on their commitments

By insisting that it wouldn’t remove any tariffs upon closing a deal, the U.S. gave Beijing little incentive to accept tough conditions. The U.S. position remained firm: no tariff removal until Beijing showed it would carry through on the commitments it made under the deal. On top of that, the U.S. wanted China to pledge not to retaliate if the U.S. were to reimpose tariffs if it found China in violation of some provisions.

In essence, the U.S. wants a trade agreement with very tough enforcement provisions, and the Chinese feel like such an agreement would be a slap in the face.

Responding to these developments, the main government-run newspaper in China struck a defiant tone

“At no time will China forfeit the country’s respect, and no one should expect China to swallow bitter fruit that harms its core interests,” the People’s Daily, a newspaper controlled by the Chinese ruling Communist Party, said in a commentary on Monday.

And an editorial in the Global Times made it quite clear that China will be willing to fight a trade war if that is what is necessary

China’s nationalist Global Times tabloid said in an editorial on Monday that the country had no reasons to fear a trade war.

“The perception that China cannot bear it is a fantasy and misjudgment,” the commentary said.

“If they weren’t being seriously provoked, the Chinese people would not favor any trade war. However, once the country is strategically coerced, nothing is unbearable for China in order to safeguard its sovereignty and dignity as well as the long-term development rights of the Chinese people.”

The Editor in Chief at the Global Times, Hu Xijin, insists that the position of the Chinese government will not change no matter how high Trump raises tariffs

China has made public 3 core concerns that must be addressed & it won’t make concessions on. From perspective of China’s politics, there is little room for compromises. They will insist. This political logic won’t be changed no matter how much additional tariffs the US will impose.

Of course Trump is not exactly being conciliatory either.  For example, check out what he just posted on his Twitter account

China is DREAMING that Sleepy Joe Biden, or any of the others, gets elected in 2020. They LOVE ripping off America!

It’s true, but that is not the sort of thing that you say if you hope to make a deal.

And earlier, Trump insisted that we “are right where we want to be with China”

We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries…

….We will then spend (match or better) the money that China may no longer be spending with our Great Patriot Farmers (Agriculture), which is a small percentage of total Tariffs received, and distribute the food to starving people in nations around the world! GREAT!

Without a doubt, previous administrations allowed the Chinese to walk all over us, and we must either stand up for ourselves or we are going to continue to get abused.

As one U.S. official put it, “sometimes you need to say ‘stop screwing me.’”

But now that a trade war has begun, the conflict could get quite dirty.

Most analysts seem to assume that tariffs will be the only weapon of choice, but what if China decides to cut off our access to rare earth elements?  The U.S. rare earth industry is greatly underdeveloped because we assumed that we could always get all that we wanted from China.

Well, if they cut us off we will be in a world of hurt.

And that is just one example.  The Chinese can literally hurt us in hundreds of different ways, and they will not hesitate to exert pressure where needed.

A trade war is going to hurt the U.S., it is going to hurt China, and it is going to hurt everyone else too.  In fact, this could be what triggers the next great economic meltdown.

Doing nothing about China was not an option, because they have been robbing us blind.  But a cataclysmic trade war is not a good option either.

In the end, getting a trade agreement with China that addressed our core concerns without throwing the entire global economic system into chaos would have been preferable.

But that didn’t happen, and now everyone should be bracing for disaster as we enter a very uncertain future.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

How The Trade War Is Going To Affect You And Your Family

As expected, trade negotiations with China concluded on Friday with no trade deal in sight.  Treasury Secretary Steven Mnuchin called the negotiations “constructive”, and that helped calm the financial markets, but there really isn’t any reason to be optimistic at this point.  The negotiations that happened this week did not even come close to producing a deal, and neither side is attempting to claim that there will be an agreement in the near future.  Instead, it appears that moves are being made that could lead to a protracted trade war.  In fact, according to Bloomberg the Trump administration has just given the Chinese another ominous deadline…

The U.S. gave its bottom line during the talks in Washington, saying Beijing had three to four weeks more to reach an agreement before the Trump administration enacts additional tariffs on $325 billion of Chinese imports not currently covered by punitive duties, according to two people familiar with the talks.

These tariffs would be in addition to the ones that President Trump just hammered China with.  And Trump is not waiting to see how future talks with China turn out either.  According to a statement from U.S. Trade Representative Robert Lighthizer, Trump has already initiated the process for implementing these new tariffs

In an unexpected Friday development – President Trump began the process of raising tariffs on all remaining imports from China, valued at approximately $300 billion. The move follows a Friday tariff increase on Chinese imports from 10% to 25% effective just after midnight.

US Trade Representative Robert Lighthizer issued a Friday statement – after market hours of course – which reads:

“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports. The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.”

This is a very clear sign that negotiations with China did not go well.

If they had gone well, Trump would not be threatening China like this.

So it looks like we should all get prepared for an extended trade war, and this trade war is going to affect you and your family in a number of different ways.

First of all, we should all expect significantly higher prices at major retailers…

American retailers and manufacturers were largely able to absorb the 10% tariff — narrowing their profit margins — negotiate offsetting price cuts with Chinese suppliers, import a big stockpile of goods before the tariff took effect, and spread the added cost across many products. But a 25% duty is too much to camouflage with such tactics and a big chunk of it is expected to be passed to U.S. shoppers.

In particular, price increases will be felt most acutely at large retail chains such as Wal-Mart that purchase goods in massive quantities from China.  Needless to say, this will hurt those at the bottom of the economic food chain the most.

Secondly, this trade war will potentially result in a loss of jobs and income for many Americans.  In fact, the Trade Partnership estimates that 2.1 million U.S. jobs will be lost if Trump’s next round of tariffs is imposed

If Trump slapped a 25% tariff on the remaining $325 billion in goods the U.S. imports from China, it would cost the U.S. 2.1 million jobs and the average family of four more than $2,000 a year, according to the Trade Partnership analysis.

Thirdly, economic growth would definitely be impacted by an extended trade war.  The following bit of analysis comes from CNN

And then there’s the “extreme scenario” of full-blown, multilateral trade war. In this scenario, Oxford Economics modeled the impact of the U.S. putting 35% tariffs on all Chinese imports and 25% auto tariffs globally, plus 10% blanket tariffs on all other goods imported from the EU, Taiwan and Japan — with all countries retaliating in kind.

The firm calculated this would result in a 2.1% hit to U.S. GDP in 2020, pushing the economy into recession later this year. China’s economy would contract by 2.5%, while Europe and Japan would see average GDP losses of 1.5% and world GDP would be reduced by 1.7%.

Unfortunately, the truth is that the projections from Oxford Economics are way too optimistic.  As I detailed yesterday, our trade war in the 1930s was absolutely catastrophic for the U.S. economy

On June 17th, 1930 President Hoover signed the Smoot-Hawley Act which imposed tariffs on more than 20,000 imported goods.

This coincided with the worst economic downturn of the 20th century. U.S. GDP declined 8.5 percent in 1930, 6.4 percent in 1931 and 12.9 percent in 1932.

Fourthly, an extended trade war would mean big trouble for global financial markets.  Over 2 trillion dollars of global stock market wealth has been wiped out so far, but that is nothing compared to what could be coming

The trade war between the United States and China is back on. So far, markets haven’t sustained huge losses. That will change if tensions continue to escalate.

With higher tariffs coming into effect, the next risk analysts see is a complete breakdown in negotiations between Washington and Beijing.

“If the deal totally falls apart, we think there’s a pretty big chance of a market correction,” said Ryan Detrick, senior market strategist at LPL Financial. US stocks could fall as much as 5% over the next month, he added.

But the Trump administration can’t back down now, or else it would lose all credibility.

According to the latest numbers, we bought 539.5 billion dollars worth of goods from China last year but they only purchased 120.3 billion dollars worth of goods from us.  For years they have been slapping enormous tariffs on us, stealing our intellectual property and making it exceedingly difficult for U.S. businesses to do business over there.

Meanwhile, they have been flooding our shores with cheap goods produced by government-subsidized businesses, and they have been getting exceedingly wealthy as a result.

So we can either allow them to keep taking advantage of us, or we can stand up for ourselves.

But let there be no doubt – standing up to China will be extremely painful economically.  And at this stage of our society, Americans are not even equipped to handle a low level of economic pain.

A perfect storm is brewing, and this trade war is just a small part of it.

Sometimes you can try to do the right thing, but it turns out badly anyway.  Standing up to China definitely needs to be done, but it is very difficult to see how this is going to end pleasantly.  In fact, many believe that our relations with China are about to take a major turn for the worse.

We shall see what happens.  As always, let us hope for the best, but let us also prepare for the worst.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Deadline Passes And Trump Brings Down The Tariff Hammer – China Immediately Promises To Retaliate

At 12:01 AM eastern time on Friday, President Trump followed through on his threats and hit China with a massive tariff increase.  As you will see below, China immediately pledged to retaliate.  U.S. and Chinese officials will continue to negotiate throughout the day on Friday, but if U.S. officials were optimistic that a deal was imminent the trigger never would have been pulled on these tariffs.  At this point the gap between the negotiating positions of the two sides is still enormous, and that does not seem likely to change.  The Chinese have been taking advantage of the United States for decades, and they wish to continue doing so.  Meanwhile, President Trump and his advisers are absolutely determined to level the playing field.  Unless one of the parties backs down in a major way, there is not going to be a trade agreement and this trade war is about to get very real, and that is extremely bad news for the global economy.

Just minutes ago, the deadline that the whole world was watching passed, and as expected Trump’s tariffs were imposed.  The following comes from Bloomberg

The U.S. hiked tariffs on more than $200 billion in goods from China on Friday in the most dramatic step yet of Donald Trump’s push to extract trade concessions, deepening a conflict that has roiled financial markets and cast a shadow over the global economy.

China immediately said in a statement it is forced to retaliate, but didn’t specify how.

On Thursday evening, global markets were tentatively hopeful as U.S. and Chinese officials met to negotiate.  According to White House Deputy Press Secretary Judd Deere, negotiations will continue in the morning

“This evening, (United States Trade Representative Robert Lighthizer) and (Treasury Secretary Steven Mnuchin) met with President Trump to discuss the ongoing trade negotiations with China. The Ambassador and Secretary then had a working dinner with Vice Premier Liu He, and agreed to continue discussions tomorrow morning at USTR,” Judd Deere, White House Deputy Press Secretary, said in a Thursday evening statement.

But the negotiations did not go well enough to even delay the implementation of the tariffs.

Trump followed through on what he promised he would do, and the Chinese say that they have “already prepared a response for all kinds of outcomes”

At the same time the Chinese side has already prepared a response for all kinds of outcomes, Gao Feng, commerce ministry spokesperson, said in Mandarin, according to a CNBC translation. He was speaking at Thursday’s weekly press conference.

It is likely that the Chinese did not immediately respond with new tariffs of their own because they would like to see how negotiations go on Friday.

In the end, the Chinese would love to get Trump to put a hold on tariffs yet again without giving him the trade agreement that he desperately wants.  Throughout this process, the Chinese tactic has been to delay, delay, delay and they will undoubtedly do their best to try to kick the can down the road once again.

But Trump has figured out that they have been trying to run out the clock on his administration, and this time he is putting his foot down.

And without a doubt, it is definitely good to see a presidential administration finally standing up to the Chinese.  They have been ruthlessly taking advantage of us and ripping us off blind for years, and that must stop.

Here is just one example of this that Trump often likes to share

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%,” Trump tweeted April 9. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE –  going on for years!”

Of course Trump is exactly correct.  It is not “free trade” and it is definitely not “fair trade”.  If they want to impose 25 percent tariffs on our auto industry, they should expect the same treatment for their key industries in return.

All along, Trump has insisted that if China wants to remove all their tariffs that we would be willing to do the same thing, but the Chinese would never agree to do that.

So Trump is standing up to China, and that is a good thing.

Unfortunately, upsetting the status quo will also be exceedingly painful.

A full-blown trade war with China will be really, really bad for the global economy.  If Trump understood how bad things could potentially get, he probably never would have gone down this road, because it is going to be exceedingly difficult to get re-elected if the economy tanks.

I think that a little review of what happened during our last trade war will help us get a little perspective on what could be ahead.

On June 17th, 1930 President Hoover signed the Smoot-Hawley Act which imposed tariffs on more than 20,000 imported goods.

This coincided with the worst economic downturn of the 20th century.  U.S. GDP declined 8.5 percent in 1930, 6.4 percent in 1931 and 12.9 percent in 1932.

On June 12th, 1934 President Roosevelt signed the Reciprocal Tariff Act which essentially ended the trade war.

So what happened?

The U.S. economy grew 10.8 percent in 1934, 8.9 percent in 1935 and 12.9 percent in 1936.

Today, the global economy is far more interconnected than it was in the 1930s, and so the impact of a global trade war could potentially be much greater.

We need trade with China to be fair and balanced, but are we willing to go through an extraordinary amount of economic pain to get to that end result?

And once relations with China break down, will they ever be able to be repaired?

We are at a critical turning point in U.S. history, and nobody is going to be able to turn back time once the dominoes begin to fall.

In the end, we are all going to have to live with the decisions that the Trump administration is making right now, and so let us hope that wisdom prevails.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Trump Spooks Global Markets: China “Broke The Deal. They Can’t Do That, So They’ll Be Paying.”

It sure looks like nothing can stop the trade war now, and that could potentially be absolutely disastrous for the global economy.  The last major trade war began in 1930, and it turned an economic downturn into the Great Depression of the 1930s.  But without a doubt something needed to be done about China.  They have been lying, cheating and stealing our technology for a very long time, and previous administrations simply allowed them to walk all over us.  President Trump had hoped that a new trade agreement would put trade between our two nations on a fair and equitable course from now on, but at this point it appears that isn’t going to happen.

On Wednesday evening, Trump commented on negotiations during a rally in northern Florida, and he greatly shook up global markets by stating that the Chinese “broke the deal” and that “they’ll be paying”

Speaking at a rally in Florida, the president attributed his recent threat of increased tariffs to Beijing’s negotiating position.

“By the way, you see the tariffs we’re doing? Because they broke the deal. They broke the deal,” Trump said. “So they’re flying in, the vice premier tomorrow is flying in — good man — but they broke the deal. They can’t do that, so they’ll be paying.”

In other words, Trump fully believes that the tariffs that he threatened China with on Sunday are going to go into effect on Friday.

All over the world stocks immediately began to fall following these comments, and one economist interviewed by CNBC said that Trump “is sure scaring the daylights out of the financial markets”…

Chris Rupkey, managing director and chief financial economist at global financial group MUFG, wrote in a note responding to Trump’s Wednesday evening speech that markets may continue to be roiled by that sort of rhetoric: “We are not sure who the president is addressing tonight in a campaign rally, but he is sure scaring the daylights out of the financial markets.”

For most of the year, global markets had been lifted by hopes of a trade deal, and now that it appears to be dead nobody is quite sure what is going to happen next.

Earlier on Wednesday, in a two part tweet Trump accused China of trying to drag out negotiations until after the 2020 election…

The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come….

….Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!

Trump definitely nailed this one.

As I detailed on Monday and Tuesday, the Chinese had been hoping to run out the clock on the Trump administration and deal with whoever follows Trump in the White House.  The mainstream media was absolutely shocked that Trump would say such a thing, but it is the truth.

U.S. negotiators truly believed that they were getting close to a deal in recent weeks, but a diplomatic cable which arrived from China late last Friday changed all that.  The following comes from Reuters

The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

In essence, the Chinese had totally gutted the deal that the Trump administration had been working so hard on.

So now we know that Trump’s angry tweets on Sunday didn’t just come out of nowhere.  He was greatly upset because “China got greedy”

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy.”

“China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.

“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”

The only way that a trade deal will be possible now is if somebody backs way down, and that does not seem likely to happen.

In fact, the Chinese are already threatening to implement “necessary countermeasures” once Trump hits them with tariffs on Sunday…

China’s Commerce Ministry said Wednesday that Beijing will retaliate if U.S. tariffs on $200 billion of Chinese goods are hiked to 25% from 10% as threatened by President Donald Trump on Sunday.

“The escalation of trade friction is not in the interests of the people of the two countries and the people of the world,” the ministry said. “The Chinese side deeply regrets that if the US tariff measures are implemented, China will have to take necessary countermeasures.”

And even if by some miracle a trade agreement happens, the truth is that relations between the U.S. and China have already deteriorated so dramatically that there is no way we will be returning to “business as usual”.  The following comes from a Bloomberg opinion piece

U.S. Secretary of State Mike Pompeo has been traveling the world warning allies that getting too close to China will harm relations with Washington. Buying telecom equipment from Huawei Technologies Co. would compel the U.S. to curtail intelligence-sharing, Pompeo has said, while participating in Beijing’s Belt and Road infrastructure bonanza was sanctioning “debt traps” and predatory business practices.

Add in fresh curbs on U.S. visas for Chinese scholars and heightened rhetoric over Beijing’s disputed territorial claims in the South China Sea, and the points of conflict now run well beyond tariffs and soybeans.

No matter what happens over the next few days, relations with China are going to get worse.

A lot worse.

Even though most Americans don’t realize it, this is a major turning point.

Begun, the trade war has, and the pain will ultimately be felt by every man, woman and child on the entire planet.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

If The Stock Market Is Falling This Much Already, What Is Going To Happen If There Is No Trade Deal With China By Friday?

If negotiations between the Trump administration and the Chinese government do not produce a trade deal by Friday, it is going to be absolutely catastrophic for Wall Street.  On Tuesday, trade fears pushed the Dow Jones Industrial Average down 473 points.  It was the second-worst trading day of 2019 so far, and at one point during the trading session the Dow had fallen as much as 648 points.  But most of the experts are assuring investors that a trade deal with China will be finalized before Trump’s new tariffs go into effect on Friday.  We are being told that the Chinese will almost certainly cave in on some of their most important demands and that Trump will get the favorable trade deal with China that he has been seeking.

But what if it doesn’t happen after all?

If the Chinese give in now, they will look exceedingly weak, and any trade deal will be hailed as a great victory for the Trump administration.

To me, it seems exceedingly unlikely that the Chinese would want to make any sort of a deal under such circumstances.

The Trump administration has essentially pointed a loaded gun at their heads and has told them that they better agree to a trade deal by Friday or else.

There are some countries with which such an approach would work, but China is definitely not one of them.

And I may not have as much “foreign policy experience” as John Bolton, but even I know that if you want to make a deal with China it is probably not a good idea to antagonize them with warships in the South China Sea at the same time you are trying to negotiate with them.

Perhaps I will be proven wrong, but it seems to me that trying to bully China could backfire spectacularly.

And at this point, the Trump administration better deliver a trade deal with China by Friday, because if they don’t there are going to be very serious consequences.

First of all, once investors realize that a trade deal with China is dead we are going to see a violent downturn in the stock market.  According to one expert quoted by USA Today, “the market could go down another 10% plus”…

“The biggest threat to this market is the U.S.-China trade issues,” Ives said. “If China and the U.S. dig in on trade, it’s time to put on the hard hat because the market could go down another 10% plus.”

And in a CNBC article entitled “WORST CASE SCENARIO: Here’s what it looks like if Trump starts a trade war with China”, a figure of “10%” was also thrown around…

The worst-case outcome there, say experts, is a fight that sends the S&P 500 into a correction — which would be 10% off that key indicator. The companies likely to be hardest hit, say the experts, are likely Boeing, Apple and Caterpillar. They are all down about 5% this week already.

Then the pain ripples into the metals, mining and automobiles sectors.

Unfortunately, a decline of 10 percent is definitely not the “worst case scenario” that we could be facing.

As I have explained repeatedly, stock prices would need to decline by 40 or 50 percent just to get key valuation ratios back to their long-term averages.

And valuation ratios always return to their long-term averages eventually.

At this moment, we are still in the greatest stock market bubble of all time.  Companies that have been losing mountains of money for years are supposedly worth billions of dollars, and it is just a matter of time before this giant charade ends.

Just consider the case of a company called Beyond Meat.  The following comes from Wolf Richter

Just how silly this market has gotten is exemplified by Beyond Meat, a 10-year old company whose fake burgers – combining the worst of terrible burgers and unrecognizable industrially processed plant substances – have been sold for years, and whose shares following the IPO have skyrocketed to give the company a market capitalization of $4.6 billion though it has persistently lost money on its fake burgers and had sales in 2018 of only $56 million.

It’s apparently easier to sell stocks in this environment than it is to sell fake burgers. So the company is now valued at 83 times revenues. This is nuts.

We are so ripe for a major stock market crash, and a full-blown trade war with China could potentially be the trigger.

In addition, a full-blown trade war with China would be absolutely crippling for companies all across America.  Here is just one example

Phil Page, the CEO of Missouri-based Cap America, estimates that his company has more than $1 million worth of baseball hats already ordered that will now be hit with the higher tariff.

“It’s very difficult to understand what the President is going to do by a business perspective. To spring it on us all at once like this is a very poor judgment on his part,” Page said.

“I thought this thing was going to be worked out this week,” he added.

Overall, one survey found that approximately 75 percent of all good-producing companies in the entire country would be negatively impacted by tariffs

About 75% of good-producing firms recently surveyed by the National Association for Business Economics said the tariffs have had a negative impact on their business.

Yes, China has been taking unfair advantage of us for a very long time, and this is something that I have written about extensively.

But these things must be handled with great diplomacy.

If there is no trade deal, this could be the moment when our relations with the Chinese enter a tailspin from which they never recover.  A trade war would be extremely destructive for the U.S. economy, and history has shown us that trade wars have a tendency to eventually turn into shooting wars.

We will see what happens the rest of the week.

This is a critical turning point, and the Trump administration cannot afford to fail.

In closing, let me share with you this quote which I found earlier today in a CNBC article

“To paraphrase Lenin: there are decades where nothing happens and there are weeks when decades happen…and then there is a single week in the Trump Presidency. What a time to be alive.”

This is a make or break moment for the Trump administration, and it is a make or break moment for the entire U.S. economy.

By Friday, we shall know the outcome.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Dow Made A Miraculous 400 Point Recovery, But Now Renewed Trade Fears Are Sending Markets Plunging Once Again

If your head is spinning from the wild fluctuations that have shaken global financial markets, you are definitely not alone.  On Sunday, President Trump angrily threatened to hit China with enormous new tariffs, and it looked like hopes for a trade deal between the United States and China had collapsed.  Overnight, Chinese stocks had their worst session in three years, and many expected U.S. stocks to experience a similar plunge.  But then on Monday we learned that the Chinese had decided to move forward with trade talks this week anyway, and global financial markets started rebounding in a major way.  In fact, the Dow Jones Industrial Average rebounded more than 400 points

The Dow closed just 66 points lower on Monday, recovering from a plunge of as much as 471 points. The S&P 500 and Nasdaq also erased their sharp losses, ending just 0.5% lower.

The comeback signals investors don’t believe President Donald Trump’s surprise threat to impose higher tariffs on China will spark a painful deepening of the trade war. Optimists are even hoping an historic trade deal will still be reached.

Crisis averted, right?

Well, it certainly looked like smooth sailing was ahead until U.S. Trade Representative Robert Lighthizer told the press that new tariffs will still be imposed on Chinese goods on Friday.  The following comes from Zero Hedge

While a Chinese delegation is still scheduled to visit Washington as planned this week, with talks to take place Thursday and Friday, U.S. Trade Representative Robert Lighthizer told reporters Monday that the Trump administration plans to increase duties on Chinese imports at 12:01 a.m. on Friday, accusing Beijing of backpedaling on commitments it made during negotiations.

U.S. and China had been making substantial progress on a trade deal, but in the past week China has reneged on some of its promises:

“We felt we were on track to get somewhere. Over the course of last week we have seen an erosion of commitments by China,” Lighthizer said, adding that significant issues remain unresolved, including whether tariffs will remain in place.

The result, more than half of the intraday gains have been erased already…

This is a huge gamble by the Trump administration.

As I explained yesterday, the Chinese have been dragging their feet because they really don’t want a trade deal with Trump unless somehow they were able to miraculously get everything that they wanted.  They would very much prefer to negotiate with whoever follows Trump in the White House, and they have been using trade negotiations as a delaying tactic to keep Trump from imposing more tariffs on them.

Of course eventually Trump was going to figure out that he was being played, and so now Trump is going to impose new tariffs anyway, and he is hoping that this will be enough leverage to force the Chinese into an agreement.

But there is also the possibility that the entire process could blow up and the Chinese could walk away from negotiations permanently.

And if the Chinese do walk away, it is going to be a disaster for global financial markets.

To me, it seems quite foolish to try to push China around.  The Chinese are very, very proud people, and they don’t take threats very well at all.  If they feel like they have been disrespected, it is something that they will remember for a very, very long time.

But many in Congress seem to approve of Trump’s approach.  In fact, Democrat Chuck Schumer is encouraging Trump to “hang tough on China”

Hang tough on China, President . Don’t back down. Strength is the only way to win with China.

Schumer absolutely hates Trump and would love to see him removed from office, so why the encouraging words?

To me, this smells like a trap.  Schumer understands that if negotiations fail it will be a huge blow to the U.S. economy, and if the economy tanks that will be a huge plus for Democrats in 2020.

Over in China, they are officially freaking out over the Trump administration’s latest moves.  In fact, an article in the South China Morning Post just compared Trump to Thanos…

The tweets roiled markets in China and Hong Kong, leading one analyst to compare Trump to Thanos – the character from the box office smash Avengers who wiped out half of all life in the universe with a snap of his fingers.

“He snapped his fingers and rattled the market,” said Sheng Liugang, director of the trade and development research programme at the Chinese University of Hong Kong, adding that the move would add to pressure on the Chinese economy, which outperformed expectations in the first quarter of the year, largely due to stimulus measures from Beijing.

We’ll see what happens when U.S. and Chinese officials meet this week.

If the Trump administration is able to strong-arm the Chinese into a deal, Trump will be hailed as a master negotiator and global financial markets will rejoice.

But if a deal is not reached and the Chinese walk away, global financial markets will tank and it could push us into the next economic crisis.  According to Warren Buffett, a full-fledged trade war between the United States and China “would be bad for the whole world”…

If we actually have a trade war, it would be bad for the whole world. It could be very bad depending on the extent of it,” Buffett told CNBC.

He added that China and the United States are playing a “dangerous game.”

The stakes are exceedingly high, and the outcome of these negotiations could go either way.

By the end of the week things should be much clearer, and if a deal is not reached we could see events start to spiral out of control pretty rapidly.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Investors Brace For Impact As The Cancer That Is Ravaging “The Real Economy” Starts To Spread

2019 sure has been a weird year so far.  On Wall Street, everything has been coming up roses for investors up to this point.  Stock prices have risen more than 10 percent year-to-date, and the horrible crashes of late last year are quickly fading from memory.  Meanwhile, the real economy is literally falling to pieces right in front of our eyes.  Debt delinquencies are at unprecedented levels, bankruptcies are soaring, retail stores are closing at a record pace, this is the worst economy for farmers since the early 1980s, exports are plummeting and a brand new real estate crisis has now begun.  Economic cancer is rapidly spreading throughout our country, and the U.S. economy is deteriorating at the fastest pace that we have seen since the last recession.  So how long will it be before Wall Street catches up with economic reality?

The retail industry is being hit particularly hard.  At the end of last week, major retailers announced 465 store closings in a single 48 hour period…

The ‘retail apocalypse’ is alive and well this week with major chains such as Gap, JCPenney, Victoria’s Secret and Foot Locker all announcing massive closures, totalling the death of more than 465 stores over the last 48 hours.

And those closings already bring the grand total for 2019 to “a whopping 4,309 store closures”

That builds on recent store closure announcements by Gymboree, Payless ShoeSource, Charlotte Russe and Ann Taylor parent company Ascena Retail, to name a few. A whopping 4,309 store closures were announced by retailers just in the first two months of this year, Coresight Research said in a research note on Friday. That’s well ahead of the number of announcements the market research firm was tracking this same time a year ago, it said.

The term “retail apocalypse” is being thrown around so frequently these days that it has almost lost its meaning, but the worst is yet to come.

Meanwhile, layoffs are starting to come fast and furious now.  For example, I was recently made aware of major job cuts that just happened in North Carolina

Duke Energy Corp. eliminated 1,900 positions in its latest round of job reductions, largely through voluntary buyouts but with some involuntary layoffs included.

For the first time since the last recession, I think that it is time to start visiting sites like Daily Job Cuts on a regular basis once again.  Millions of Americans lost their jobs in 2008 and 2009, and a lot of you can still remember how painful that was.

In the middle of the country, the big news is “the farm apocalypse”.  Last week, we learned that farm debt has now jumped 30 percent since 2013…

“Farm debt has been rising more rapidly over the last five years, increasing by 30% since 2013 – up from $315 billion to $409 billion, according to USDA data, and up from $385 billion in just the last year – to levels seen in the 1980s,” Perdue said in his testimony to the House Agriculture Committee.

As a result of this giant mountain of debt, a ton of small and mid-size farms are going under.  As I noted the other day, farm debt delinquencies have now reached the highest level that we have witnessed in 9 years.

I really, really don’t understand the people that are telling us that everything is going to be okay.

Everything is not okay, and things are getting worse with each passing day.  ISM’s manufacturing survey just hit the lowest level in 26 months, and for a whole bunch more extremely ominous economic numbers please see my previous article entitled “18 Really Big Numbers That Show That The U.S. Economy Is Starting To Fall Apart Very Rapidly”.

Of course it isn’t just the U.S. that is hurting.  Up north, Canada is literally teetering on the brink of recession

The Canadian government shocked the professional financial and economic media with their latest fourth quarter GDP release showing the economy has essentially come to a grinding halt at 0.1% growth.

And over in Europe, things are arguably even worse.  Germany is supposed to have the strongest economy in the entire region, but they are also right on the brink of recession

The country’s economy just escaped entering recession territory last month, with GDP growing at just zero percent following a 0.4 percent contraction in the previous three-month period. But Germany could be just weeks away from a recession-threatening double whammy as a potential no-deal Brexit and Donald Trump’s warning to hike car tariffs by up to 25 percent could send the economy tumbling. Chancellor Angela Merkel’s ministers have entered into a frantic plan to avert an economic catastrophe which could end Europe’s biggest economy’s golden growth for a decade.

This is a global economic slowdown, and many believe that it will be even worse than what we experienced in 2008.

But as I have previously warned, we aren’t just heading toward an economic storm.  Everything that can be shaken will be shaken, and that includes our governmental institutions.

On Sunday, we learned that the House Judiciary Committee is opening an investigation into obstruction of justice by President Trump.  The following comes from Reuters

The House Judiciary Committee will seek documents from more than 60 people and organizations as it begins investigations into possible obstruction of justice and abuse of power by President Donald Trump, the panel’s chairman said on Sunday.

Committee Chairman Jerrold Nadler told ABC’s “This Week” the panel wanted documents from the Department of Justice, the president’s son Donald Trump Jr. and Trump Organization chief financial officer Allen Weisselberg, among others.

This is going to be a year of great governmental shaking.  And no matter which side emerges victorious from the legal struggles and from the election of 2020, the truth is that our governmental institutions will never be the same again.

From 2016 through 2018, America experienced a time of relative peace and prosperity, and a lot of people out there were convinced that this bubble of unsustainable false prosperity could continue indefinitely.

Now it is becoming very clear what is ahead of us, and a lot of people are starting to freak out.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

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