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.

Trade talks with China collapse: “This has all the makings of a complete disaster that could lead the stock market to crater this week”

Chaos has returned to global financial markets, and it does not appear that there will be an easy fix this time.  For the first four months of 2019, the mainstream media told us over and over again that a great deal of progress was being made on a trade deal with China and that negotiations would soon reach a final conclusion, but now it has become clear that those news reports were fake news.  For a variety of reasons, the Chinese have been slow playing negotiations all along.  Once they got the Trump administration to suspend the implementation of any new tariffs while negotiations were ongoing, the Chinese no longer had any urgency to reach an agreement.  In fact, if the Chinese could have run out the clock all the way to the 2020 election, they surely would have done so.  They would very much prefer to negotiate with someone else, and I think that President Trump has finally figured out that he was being played.  On Sunday, in a very angry two part tweet Trump announced that he is going to slap China with huge new tariffs

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….

…of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!

In response to Trump’s angry tweets, the Chinese suggested that they may cancel this week’s negotiations

Chinese Vice Premier Liu He had planned to bring a large delegation to Washington on Wednesday to hash out a trade deal — and there’d been talk in recent days that something resembling a deal could result. Instead, two sources briefed on the talks said the Chinese side may back out of this week’s negotiations.

That was pegged to Trump’s new threats, they said, which abandon a six-month truce after Beijing waffled on some previously discussed commitments.

And according to reporter Edward Lawrence, the negotiations have now officially been canceled…

Chinese Vice Premier Liu He has cancelled his trip to Washington this week for trade talks following a tweet by President Donald Trump threatening more tariffs because the talks have moved too slowly.

Needless to say, global financial markets did not respond well to this news.  For most of the year, hope that a trade agreement was imminent had lifted stocks, but now that hope appears to be gone.

In Asia, the major Chinese markets were all down more than 5 percent overnight

Asia Pacific stocks tumbled in Monday morning trade following a re-escalation in U.S.-China trade tensions as President Donald Trump declared an impending increase in tariffs rates on $200 billion of Chinese goods.

The mainland Chinese markets plunged in morning trade. The Shanghai composite, Shenzhen composite and Shenzhen component all plunged more than 5% each.

And oil prices immediately began falling as well

Oil prices also saw sharp declines in the morning of Asian trading hours, with U.S. crude futures dropping 2.34% to $60.49 per barrel. For its part, international benchmark Brent crude futures also declined 2.09% to $69.37 per barrel.

Unfortunately, this is likely to be far more than just a temporary setback for the markets.  Unless a trade deal can be salvaged somehow, things are likely to get very “interesting” quite rapidly.

According to one top expert quoted by CNBC, this “has all the makings of a complete disaster that could lead the stock market to crater this week and send those external risks to the US economic outlook soaring”…

“Another turn of the screw tighter Sunday from the President’s hard-ball tactics with the China trade talks, and his pair of tweets look like they could unleash a sharp stock market correction,” said Chris Rupkey, chief financial economist at MUFG Union Bank, in a note. “For weeks now markets have been lulled to sleep on the US trade war with China thinking an agreement was imminent. No more.”

“This has all the makings of a complete disaster that could lead the stock market to crater this week and send those external risks to the US economic outlook soaring,” he added.

Could this be one of the triggers that pushes us over the edge and into the economic abyss?

Even without the collapse of trade talks with China, we were definitely heading toward a recession anyway.  I really like how economist John Williams made this point during a recent interview with Greg Hunter

“We have a recession in place. It’s just a matter of playing out in some of these other funny numbers. The reality is on the downside, where you have mixed pressures right now. People who are really concerned about the economy right now, and that includes President Trump looking at re-election, he’s been arguing that the Fed should lower rates, and I am with him. The Fed created this circumstance. They are pushing for the economy on the upside because they want to continue to keep raising rates. Banks make more money with higher rates, and they are still trying to liquidate the problems they created when they bailed out the banking system back in 2008.”

The first few months of 2019 have been surprisingly quiet, but now events appear to be accelerating in a major way.

So hold on tight, because it appears that a very bumpy ride is ahead.

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.

$220,000 For Every Man, Woman And Child – America Is Now 72 Trillion Dollars In Debt

Are you ready to cough up $220,000 to pay your share?  One of the reasons why a day of reckoning for the U.S. economy is inevitable is because we are in way too much debt.  The 22 trillion dollar debt that the federal government has accumulated gets most of the attention, but the truth is that we would still be 50 trillion dollars in debt even if the national debt was eliminated somehow.  Today, debt levels are exploding on every level of society.  Corporate debt has more than doubled since the last financial crisis, U.S. consumers are more than 13 trillion dollars in debt, and state and local governments are piling up debt as if tomorrow will never come.  According to a Federal Reserve chart that you can find right here, the total amount of debt in the U.S. financial system has now reached an astounding 72 trillion dollars.

My father was a math teacher for many years, and so I like numbers.

I divided $72,000,000,000,000 by the current population of the United States (Google says it is 327.2 million), and I discovered that it breaks down to more than $220,000 for every man, woman and child in the entire country.

So if you have a family of four, your share of all this debt is $880,000.

This debt bubble has been growing much, much faster than the overall economy for a very long time.  When Ronald Reagan took office the total amount of debt in our system was less than 5 trillion dollars, and when George W. Bush took office the total amount of debt in our system was just over 29 trillion dollars.

Just prior to the last financial crisis we surpassed the 54 trillion dollar mark, and so since that time we have added nearly 18 trillion dollars to our total.

Of course all of this debt will never actually be paid off.  The only thing left to do is to keep this debt bubble going for as long as possible, and the only way to do that is to keep it growing at a faster pace than the overall economy is growing.

And our financial engineers have definitely been successful in extending this Ponzi scheme for a lot longer than many of us had anticipated, but they can’t keep doing this indefinitely.

Every financial bubble in history has eventually ended, and this one will too.  I really like what Charles Hugh Smith had to say to Greg Hunter just the other day

Journalist and book author Charles Hugh Smith says the next market crash and recession will unfold like the bursting of the 2000 Dotcom bubble. Smith explains, “The bubble popped or deflated not for any crisis, but simply because there was too much debt, too much leverage, too much euphoria and unrealistic valuations. I think we are seeing that now in stocks, housing and a lot of other assets around the world. The valuations just exceed what makes financial sense. . . . And remember, we are at the longest expansion in history. It’s over 10 years, and the average expansion lasts 5, 6 or 7 years. So, this expansion is pretty long in tooth. . . . You will get a slowdown, and that is a self-reinforcing feedback loop. Once people stop buying houses and once people stop buying cars . . . then you are going to get people being laid off, less people being able to afford to eat out, and then you get a self-reinforcing recession. It’s not a crisis, but like an erosion because everybody is kind of tapped out.”

In the end, nobody can “fix” our system, because our debt-based financial system was fundamentally flawed when it was designed.  This is something that I have repeatedly pointed out, but unfortunately most Americans still don’t seem to understand this very basic concept.

If you have a financial system that is literally designed to endlessly create more debt, more money and more inflation, then you are living in a “bubble economy”.

And a “bubble economy” can seem fine as long as the bubble is inflating and economic activity seems to be humming along, but when things start to go bad they can go really, really bad very rapidly.

Individually, there is very little that we can do about our national debt, state and local government debt or corporate debt.  We can try to vote people into office that want to do the right thing, but unfortunately fiscal responsibility and financial reform are not hot button political issues right now.

But what we can do is get our own financial houses in order.  Now is not the time to take on more debt, and paying off any debt that you have already accumulated would be a very good thing.  This is something that Mac Slavo commented on in one of his recent articles

The real truth that no one seems to want to hear, is that those who took out these loans signed on the line and voluntarily entered into a contract.  If they didn’t understand the contract, it’s their responsibility (a big scary word) to ask or seek clarity before the agreement is made and signed. That’s called personal responsibility for your actions.  However, it’s lacking all over the globe, but particularly in the United States where people are always looking to blame others for their poor decisions that they themselves have made. “Blame the rich for my decision to go into debt and agree to bad terms!”

The debt crisis the U.S. has found itself in could very well cause another recession such as the one that started in 2008. This is exactly why personal wealth gurus such as Dave Ramsey and Future Money Trends‘ James Davis tell people to avoid debt if at all possible. Doing so will protect you when others start to default on their loans.  You can’t default if you haven’t borrowed money. It also won’t matter what type of predatory loans exist if people aren’t borrowing that money. Personal responsibility could help lead to more freedom. If people are not free to make bad decisions as well as good decisions, people are not free.

As for the nation as a whole, we can only hope that there is as much time as possible before the inevitable implosion comes.

For decades we have been making exceedingly foolish decisions, and the consequences of those decisions are going to be exceedingly painful indeed.

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.

Do NOT follow this link or you will be banned from the site!