Two economies in one

Both from Drudge.

Whiff of Extinction Blows in Bull Market That Outlived Them All…
STOCKS HEAD FOR WORST DECEMBER EVER… 

AND

BOOM: Holiday Retail Sales Strongest in Years…
Low gas prices lead to record travel…

AND WHAT A DIFFERENCE A DAY MAKES:


STOCKS ROAR BACK
DOW +1,086
BIGGEST GAIN EVER

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45 Responses to Two economies in one

  1. John Constantine

    The headlines make sense, because the good news is based upon historic looking back conditions, but the stockmarket selldown is based upon the looking forward risk that the anti Trump resistance will crash the economy to win the civil war.

    They were going to crash it anyway, this is just sooner than they [ or I] hoped and planned for.

    In australia the inside economy is distributing all it can to outsiders, for cash. The shorten looting and vendetta cartel riding in on the eve of destruction is part of it, but the transnational left bringing down a popularly elected President of America shows us history is being rewritten, right now.

    Still, they might just get to murder him and his family and their media will program us to be happy about it.

    Comrades.

  2. John Constantine

    The question for australia is:

    How many millions of the worlds poorest people will we have to mass import as consumption and voting machines on visas to be able to afford to bail out all of australias important landsharks and windsharks and loansharks and politicals?.

    Or we just borrow it one road one belt one way.

    Comrade Maaaaates.

  3. Oh come on

    What are the bond markets doing? They tend to be a bit more sober than the excitable equity boys.

  4. Bruce of Newcastle

    Wall Street up over 600 points this morning – nearly 3%.
    Trump messes with their heads.
    Never fight Trump.

  5. stackja

    2GB financial reporter: people forget, crazy time, wait couple weeks, have holiday.

  6. mh

    Know your enemy. I hope Trump does.

    Federal Reserve System – Banking Fraud

    https://www.tysknews.com/Depts/Taxes/fed_banking_fraud.htm

  7. max

    “Holiday Sales Strongest In Years As Consumers Binge On Debt”

    “spending outpaced incomes once again in November, sending the savings rate lower, suggesting that this latest consumption binge was largely fueled by debt.”

    Time Will Reveal Truth.

  8. This is the effect of the shift from Wall Street focused economy (globalist) to a Main Street focused economy (Nationalist). (Sundance at the Conservative Treehouse dot com explains this well).
    Add to that the Feds raising interest rates, the shift from paper economy to real economy is inevitable.

    Those Main Street companies with strong operations will be priced well. Those Wall Street companies. such as tech companies that have never turned a profit in 10 years and are debt laden, will be smashed.

  9. Tel

    Those Wall Street companies. such as tech companies that have never turned a profit in 10 years and are debt laden, will be smashed.

    It’s tempting to buy put options on Amazon, but the options usually only last 6 month or maybe a bit longer so you not only need to know that the company is in danger, you need to get the timing spot on … which is much more difficult. Also, you need an American broker, pay heaps of fees on international transactions, and pages of tax paperwork. They don’t make it easy.

  10. EvilElvis

    How many millions of the worlds poorest people will we have to mass import as consumption and voting machines on visas to be able to afford to bail out all of australias important landsharks and windsharks and loansharks and politicals?.

    They’re only voting machines John. The only consumption by the imports is food or cash based purely in their own families or communities and a portion of which is sent home. There’s no money going around when they’re on welfare, working for food in their western air conditioned sweat shops and living 12 or 15 head to a unit. Luckily they’ll get the ‘dumb and diversity’ crowd in though, slowly squeezing out their white, award wage paying fellow businesses.

  11. max

    Tariffs, Autarky, and Empire: The Economics of National Socialism
    Gary North – June 24, 2015
    Printer-Friendly Format

    Adam Smith’s Wealth of Nations (1776) was written to refute mercantilism’s economics of regulated foreign trade. Still, we find conservatives who say they favor the free market, yet who adopt the arguments of mercantilism.

    These people cannot think straight. I mean this literally. They cannot follow economic logic. It befuddles them. They resent those who offer such arguments.
    https://www.garynorth.com/public/13955.cfm

  12. Bruce of Newcastle

    Still, we find conservatives who say they favor the free market, yet who adopt the arguments of mercantilism.

    Trump has pointed out that if you act like free trade exists, when everyone else practices mercantilism, then you are the patsy.

  13. mh

    Trump has pointed out that if you act like free trade exists, when everyone else practices mercantilism, then you are the patsy.

    Over to you, max.

  14. max

    “if you act like free trade exists, when everyone else practices mercantilism, then you are the patsy.”

    Petition for tariff against sun

Frédéric Bastiat’s famous Candlestick makers’ Petition

    We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion.

    Donald Trump is an Economic Ignoramus on Trade

    https://acting-man.com/?p=49544

  15. Bruce of Newcastle

    On the plus side, this:

    China cuts tariffs on 700 more items (25 Dec)

    China announced another round of tariff cuts, lowering import taxes on more than 700 goods from Jan. 1 as part of its efforts to open up the economy and lower costs for domestic consumers.

    Merry Christmas Mr Trump.

  16. egg_

    This rival, which is none other than the sun…

    Fuelled by Western energy.

  17. mh

    Tariffs will only hurt the economy which imposes them. Which is why China has struggled economically for so long. Hoho

    And how is Belt and Road coming along in the province of Victoria? 🇨🇳

  18. Bruce of Newcastle

    And how is Belt and Road coming along in the province of Victoria?

    This.

    China To Take Over Kenya’s Largest Port Over Unpaid Chinese Loan (26 Dec)

    No more Mr. Nice Chinese Guy.

    After years of “benevolent” handouts to various African countries by Beijing, all of which however came in the form of loans, of which few have led to viable, long-term projects and cash-flow generating assets, and led to accusations that China is pursuing a “new colonialism” of the African continent (and more recently, nations along the One Belt, One Road corridor), China is demonstrating to the world what happens when its debtors refuse to pay up.

    Will Dan the Man become belted roadkill? All hail our new colonial masters!

  19. max

    Unilateral Free Trade
    Although the idea of unilateral free trade has not yet passed into popular culture, it has been generally accepted by economists since the time of Adam Smith (1723-1790), John Stuart Mill (1806-1873), and the Physiocrats in 17th- and 18th-century France. The desirability and feasibility of unilateral free trade can be demonstrated in three steps.
    First, it must be realized that advantages from international trade stem more from imports than from exports.
    Individuals, not countries, are the real trading partners and the ones who benefit from trade. Now, the advantages from trade come more from what one buys than from what one sells. Advantages from trade with your butcher lie more in the meat you buy from him than from the work you do to earn the money to pay him. We trade because we think that what we get is worth more than what we give up. Similarly, we work and produce in order to consume.
    This applies also to international trade, which is only inter-individual trade over a political border, As individuals produce in order to consume, and sell in order to buy, so they export in order to import. From the point of view of individual traders, importation is the goal; exports are just a way to finance their consumption. Advantages of international trade come more from the freedom to import than from the capacity to export.
    Would not freedom to import lead to chronic balance of payment problems? No, for the simple reason that in order to import, residents of a country must export an equivalent value. Exports necessarily equal imports. This is the second step in demonstrating the advantages of unilateral free trade.
    The basic reasoning is quite straightforward. As John Stuart Mill showed 200 years ago, “an imported commodity is always paid for directly or indirectly with the produce of our own industry.”
    https://fee.org/articles/gatt-and-the-alternative-of-unilateral-free-trade/

  20. max

    Chinese people are selling us nice goodies for much cheaper than we can produce, 95% of us are beneficiaries, this is market democracy which 5% of losers do not like.

  21. Bruce of Newcastle

    Max – One of the interesting aspects of unfree trade as practiced by China is that their enormous BoP surplus causes them big currency issues.

    They’ve been practicing strategic mercantilism for several decades to gain a politicoeconomic advantage – which has worked in certain areas like metals refining. Also partly in chip manufacturing, as the recent Hulawei scandals show. Western countries have recently started to wake up to the risk of Chinese domination of markets like refined rare earths, since war hasn’t been abolished as far as we know. (We are in dire danger in our strategic fuel equation since one torpedoed tanker ex-Singapore and we’ll all be walking a lot.)

    Anyway back to China’s balance of trade surplus. Overwhelmingly this is in US dollars. It means they either have to convert the USD to yuan or they have to buy USD assets to soak up all that cash, which otherwise would inflate away.

    China though has resisted the yuan-USD conversion option because that would massively increase the yuan – thereby removing the Chinese competitive edge. It would also enrich the Chinese peasantry, which isn’t something Beijing would like. Kulaks are class-enemies.

    So instead Chinese state owned and controlled companies have been on a buying frenzy. They are spending all the sloshing USD on assets.

    But those assets are in other countries. They have to be in order to spend the USD (which includes AUD, since the USD-AUD crossrate isn’t important to the Chinese BoP issue).

    But by buying stuff in Australia, US, Canada, EU and wherever they put those assets at risk. If the worst happens those assets will be confiscated immediately by the local national government. Even if China has an army fifty times the size of ours there’s still no way they could take over Australia in such a way as to preserve the value of the assets they have purchased.

    So China’s mercantilism has actually been working against their strategic aim of dominance. It works in places like Kenya, but is much less potent in Oz or the US. And now they are scared that if they push too hard they will lose their investments – which yield a very nice amount of dosh thank you.

    Hence China’s quiet backflip on tariffs when Trump took them on. They haven’t relented on things like soybean tariffs yet because of the heightened political sensitivity, but that will eventually happen.

    Trump has been getting government weenies to do what he wants for fifty years, and China’s government weenies are like any other.

  22. JohnA

    Bruce of Newcastle #2892820, posted on December 27, 2018, at 1:07 pm

    And how is Belt and Road coming along in the province of Victoria?

    This.

    China To Take Over Kenya’s Largest Port Over Unpaid Chinese Loan (26 Dec)

    No more Mr. Nice Chinese Guy.

    Will Dan the Man become belted roadkill? All hail our new colonial masters!

    And we may yet see the return of John So as Lord Mayor of Melbourne in place of the dimwit Robert Doyle…

    (and all the others who followed him).

  23. P

    US consumers are ‘very happy’ right now: Former Walmart CEO

  24. struth

    Chinese people are selling us nice goodies for much cheaper than we can produce, 95% of us are beneficiaries, this is market democracy which 5% of losers do not like.

    To not ask why this is the case, and then consider the ramifications, shows a level of ignorance we have come to expect from Max.
    It’s such theory driven libertarian nonsense he’s espousing I thought for a minute he must be dot.

    The real world is a little more complicated Max.

  25. Bruce of Newcastle

    Struth – Max makes excellent points. What I’m saying that Trump is actually a free trader…once he gets the free trade door open.

    Obama wasn’t a free trader. He called his deals ‘free trade’ so he could use them to force trading partners to worship Gaia.

  26. JC

    Struth

    If the quality of the product is good, why do you give a shit why the product is cheaper. I don’t.

  27. Buccaneer

    “Chinese people are selling us nice goodies for much cheaper than we can produce, 95% of us are beneficiaries, this is market democracy which 5% of losers do not like.”

    What’s happening with China is anything but market democracy, it’s probably the greatest market distortion of all time. The longer it goes on the worse it will be for everyone when it eventually falls over.

  28. max
    #2892821, posted on December 27, 2018 at 1:08 pm

    Would not freedom to import lead to chronic balance of payment problems? No, for the simple reason that in order to import, residents of a country must export an equivalent value. Exports necessarily equal imports

    As correct as Smith, Mill et al were IN THEIR DAY, the above statement is demonstrably not true for nations whose currencies are used as reserve currencies.
    This is why the US has such a large trade imbalance with China. China doesn’t have to spend those US dollars with the US. They can spend them with any other country because they ALL hold US dollars in reserve and trade with it.

    Now, you might say those other countries will eventually spend those US dollars with the US and the trade imbalance will even out across the cycle and you’d be technically correct. However, considering the growth in global trade over the past 20-30 years, unprecedented amounts of US dollars are circulating around the globe, generating income, jobs and taxes all over the world, but those dollars are not circulating in the local US economy. Less jobs, incomes and taxes generated there. About $700b PER YEAR. That’s 3% of GDP EVERY YEAR.

    By the time those dollars start coming back, millions of people lose their jobs, whole towns and sections of cities turn into weed strewn rust belts and generations are lost. This is exactly….EXACTLY what’s happened to the US since the WTO but most especially since China entered the WTO thanks to the push by rapist Clinton who probably made millions from it.

    Nixon also has a lot to answer for because he took the US off the gold standard and he wanted the US dollar to become a reserve currency. (and the bastard also established the EPA. Thanks arsehole)

    IMHO

  29. oops, I must have typed a naughty word, my comment is in moderation. Here it is without naughties.

    max
    #2892821, posted on December 27, 2018 at 1:08 pm

    Would not freedom to import lead to chronic balance of payment problems? No, for the simple reason that in order to import, residents of a country must export an equivalent value. Exports necessarily equal imports

    As correct as Smith, Mill et al were IN THEIR DAY, the above statement is demonstrably not true for nations whose currencies are used as reserve currencies.
    This is why the US has such a large trade imbalance with China. China doesn’t have to spend those US dollars with the US. They can spend them with any other country because they ALL hold US dollars in reserve and trade with it.

    Now, you might say those other countries will eventually spend those US dollars with the US and the trade imbalance will even out across the cycle and you’d be technically correct. However, considering the growth in global trade over the past 20-30 years, unprecedented amounts of US dollars are circulating around the globe, generating income, jobs and taxes all over the world, but those dollars are not circulating in the local US economy. Less jobs, incomes and taxes generated there. About $700b PER YEAR. That’s 3% of GDP EVERY YEAR.

    By the time those dollars start coming back, millions of people lose their jobs, whole towns and sections of cities turn into weed strewn rust belts and generations are lost. This is exactly….EXACTLY what’s happened to the US since the WTO but most especially since China entered the WTO thanks to the push by rapist Clinton who probably made millions from it.

    Nixon also has a lot to answer for because he took the US off the gold standard and he wanted the US dollar to become a reserve currency. (and the b#$%tard also established the EPA. Thanks a-hole)

    IMHO

  30. oh bother. Take 3

    max
    #2892821, posted on December 27, 2018 at 1:08 pm

    Would not freedom to import lead to chronic balance of payment problems? No, for the simple reason that in order to import, residents of a country must export an equivalent value. Exports necessarily equal imports

    As correct as Smith, Mill et al were IN THEIR DAY, the above statement is demonstrably not true for nations whose currencies are used as reserve currencies.
    This is why the US has such a large trade imbalance with China. China doesn’t have to spend those US dollars with the US. They can spend them with any other country because they ALL hold US dollars in reserve and trade with it.

    Now, you might say those other countries will eventually spend those US dollars with the US and the trade imbalance will even out across the cycle and you’d be technically correct. However, considering the growth in global trade over the past 20-30 years, unprecedented amounts of US dollars are circulating around the globe, generating income, jobs and taxes all over the world, but those dollars are not circulating in the local US economy. Less jobs, incomes and taxes generated there. About $700b PER YEAR. That’s 3% of GDP EVERY YEAR.

    By the time those dollars start coming back, millions of people lose their jobs, whole towns and sections of cities turn into weed strewn rust belts and generations are lost. This is exactly….EXACTLY what’s happened to the US since the WTO but most especially since China entered the WTO thanks to the push by Bill Clinton who probably made millions from it.

    Nixon also has a lot to answer for because he took the US off the gold standard and he wanted the US dollar to become a reserve currency. (and the b**tard also established the EPA. Thanks a**hole)

    IMHO

  31. Oh bother because my comment went into moderation twice. Naughty words I guess.

  32. struth

    Struth – Max makes excellent points. What I’m saying that Trump is actually a free trader…once he gets the free trade door open.

    Max makes theory over real world points and states that we fall back on the mercantile position which is harmful in all cases.
    That’s complete bullshit, especially if you are dealing with Mercantilists.

    Dot could never get that one side practicing free trade while the others aren’t, and even worse through the corruption are destroying the free traders ability to compete (via things like Environmental restrictions only placed on the west, is insane.
    Because his theories told him it wasn’t.
    We now see the proof.
    My point is look at a situation and ask why.
    Always ask why.
    Why is China able to produce cheaper than us, and we may just find , unshackled from the corruption that advantages China, and the very unlevel playing field, we may have been able to produce cheaper still.

    You don’t accept a corrupt price as the cheapest .
    This is what we do with China.
    It’s a classic case.
    Once through corruption, they have destroyed the competition, where do you think the price will go then?

    Trump is doing exactly the right thing and winning because he believes in competition and understands how wealth is actually created.
    By making stuff.
    One sided free trade is not free trade, and Trump knows it, and he knows the ramifications of dot style theory without looking at the bigger picture, the real world conditions.
    Not population Ponzis or anything else.
    It may be cheaper with real competition.

  33. struth

    I think I just answered your question JC, above.

  34. mh

    Obama wasn’t a free trader. He called his deals ‘free trade’ so he could use them to force trading partners to worship Gaia.

    Obama was only a front for the serious global players.

  35. PB

    Mnuchin did soothe the concerned Traders and the lower-on-the-Scale Bankers that he was getting the plunge protection band back together. Maybe they are just mopping up the final dollars before letting the last lot of air out?

  36. mh

    ABC radio covering the Chinese concentration camps right now.

    A claim of up to 5 million in camps, mostly Uyghurs.

  37. sdfc

    struth

    Why is China able to produce cheaper than us, …

    Chiefly because of lower wages.

    You want to make service workers poorer for the sake of a few extra manufacturing jobs.

  38. struth

    struth

    Why is China able to produce cheaper than us, …

    Chiefly because of lower wages.

    You want to make service workers poorer for the sake of a few extra manufacturing jobs.

    Not at all.
    In only a few manufacturing areas your theory would hold.
    We have the resources and the technology.
    We have Cane Harvesters while they swing the machete.
    We cannot compete because our hands are tied by the Socialist UN through traitorous pollies.

    This is my point.
    When the USA was the manufacturing power house of the world, their workers were well paid and had the highest standard of living in the world.
    And the billion Chinese were starving and riding pushbikes.
    The USA had a population of under 300 million in the fifties.

    Cheap wages is a very small part of it, and I believe people use it as an excuse to give up.

    Small government (less corruption, regulation and taxation) PLUS our extensive natural resources, technology and land ……………………….we would be a super power.
    Slave Labour in a corrupt communist shithole would not stand a chance competing against us, and the only reason they are winning is we are letting them and purposefully cutting our own throats.

  39. sdfc

    Not at all.

    In only a few manufacturing areas your theory would hold.

    Tariffs transfer wealth from consumers to protected industries, raise prices and reduce economic activity.

  40. John Constantine

    All of the just in time cropping inputs sourced into australia are cheaper now than when they were australian made, and they work.

    Only at any time the Tyrant of all the chicoms can snap his fingers and slow the just in time supply chain by a few weeks, and australias cropping season crashes.

    So sorry, unexpected fire in vital factory.

    Comrades.

  41. struth

    Tariffs transfer wealth from consumers to protected industries, raise prices and reduce economic activity.

    Read my above point about one sided free trade and considering other corruption issues.

    I’m all for free trade.
    There’s just no such thing.
    There’s a lot more to free trade than just ditching Tariffs.

    For example.
    The Chinese can use our coal, yet we can’t.
    That is a very big impact on our ability to compete.
    YUGE.
    Regurgitating a theory I actually agree with is all good and fine, but moronic if it is seen as the thing to do in all situations when dealing with all different types of corruption.
    Again, the main point I am trying to make is that China Might be cheapest in a corrupt world, (where international Socialist UN is trying to create one world governance by destroying the west) but allowing true corruption free competition, and you don’t know how cheep the product could actually become.
    I guarantee you this will end in tears, higher prices once they have the market, and definitely cost more when we are a poverty stricken Veneztralia.

    The Chinese are a fucking totalitarian Communist Regime.
    This seems to be of no consideration to people who can’t see above the theory book.
    Economists invent theories for a theoretical situation.
    The real world needs many other considerations factored in.

  42. max

    STATE WORSHIP
    The defenders of mercantilism have a religion: the religion of state worship.

    They believe that bureaucrats are trustworthy, that politicians act in the interest of the people. They believe that the state is a reliable source of economic wisdom, correct understanding of the future, correct understanding of the present, and is therefore the proper agency to equate supply with demand.

    Mercantilism is always a philosophy of state power. Mercantilism says that the state has a superior interest to the individuals who live under its jurisdiction.

    Mercantilists in the 17th century said that they believed in markets, but only regulated markets. They believed in monopolies granted by the state. They believed in exchange, but only when regulated by the state. What they really believed in was the expansion of the power of the state. They believed that the wisdom given to state bureaucrats is greater than the wisdom given to society as a whole by means of knowledge possessed by individuals. They believed that centralized knowledge, based on coercive statistics, is better than, meaning superior to, meaning more productive, than information possessed by all of the members of society. The information that all the members of society bring to bear on individual cases is considered inferior knowledge.

    Mercantilism is the belief that individuals who, as individuals, have no particular advantage in knowledge, when given a badge and a gun, become wiser than individuals who pursue their own self-interest. These people are wiser, and they are also completely selfless, sacrificing their interests for the sake of the broad masses of society.

    The mercantilists are statists, and so is every conservative who believes that a tariff can benefit American consumers and workers. Every philosophy of mercantilism is a philosophy of a gun stuck in the belly of another American. Every mercantilist idea is a defense of gun-in-the-belly economics.

    https://www.garynorth.com/public/9621.cfm

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