Trump issues $200bn Australia dollar sell signal

And markets are listening. The AUD is copping it:

Bonds are bid:

XJO is down solidly:

CNY is getting smashed:

Shanghai is all red:

Copper is mashed:

Iron ore and coking coal too:

Big Iron is dumped:

And Big Gas:

Gold is mixed:

Big Mortgage down sharply:

Big Realty is a big yawn:

 

I am beginning to wonder if Trump really is in this for the Big Confrontation.

Comments

  1. I am beginning to wonder if Trump really is in this for the Big Confrontation.

    He seems to delight in conflict; especially when he comes from a position of strength. More importantly, there is no glory in the status quo. This is the type of bloke who always built the biggest and gaudiest of buildings, emblazoned with his name for good measure. I feel he’ll take this to the extreme and only a full capitulation from the Chinese (Made America Great Again) will sate him.

    • Well then we will have some big fireworks as they slug it out. Tariffs are not going to bring the US economy back.

    • We won’t know until after their mid-term elections……..that is why the Iran oil sanctions are put back to November. Could be all kabuki theatre for the voters and maybe not. A 30% drop in the S&P 500 will concentrate minds wonderfully

      • You can see it in his administration; who survives, who replaces the casualties. There is a bent toward China hawkishness, not just within the Great Cheetoh himself, but within those who have his ear. You’re right, it could all be fireworks to impress his base for the mid-terms, but I think not.

    • Yes, and look what happened to the Trump Taj Mahal, or the 8th wonder of the world as descibed by Trump. LOL

  2. This is long overdue. As much as I dislike Trumps populism, racism, and anti-democratic tendencies, he is the first politician to take on China head on and I respect him for it. The big question is whether a trade war and increased tensions in South China Sea and around Taiwan leads to a real war. If China implodes, it will be hard to know what to expect…

    The USA is one of the few countries in the world that can stand on its own. And the more manufacturing that comes back the better, no matter how many jobs are produced. China will be crippled by loss of export trade, and Australia will be right behind. The USA not so much.

    and…Welcome to the next phase of the global economy. While globalisation is dependent on cheap labour, it has met the point of diminishing returns. As robotics and other technologies reduce need for international trade as everything can be cost effectively manufactured in the home country. Why would you outsource manufacturing to a country that is a military dictatorship, a military threat, doesn’t allow fair competition, and steals your technology?

    • Correct
      this country has had the best part of 60 years to stand on its own feet, but the early impetus was sacrificed in order for the offer of easy money and a shiny lifestyle for no effort
      in the trading game they say up by the stairs down by the lift
      this elevator down will wipe out the gains of the last at least 30 years, in the next 3.
      Banana Republic.

      BTW, I buy a $3000, 3d printer this week, to make from plastic parts i needed machined from aluminium.
      it will pay for itself in 2 weeks.
      All previously outsourced work for those fittings will now be carried out in house, after hours.
      So every morning I can look at em, instead of for em

    • Yes but I wonder if all the inflation that has effectively been created, but offset by deflationary goods production in China will come roaring back?
      Seems like Triffins dilemma is going to require a reset of the international monetary order.

  3. But isn’t this the opposite of what the US wants?
    A stronger USD actually increases the incentive to import Chinese goods and vice versa.

    What am I missing?

    • DominicMEMBER

      While tariffs do lead to a stronger $ (in most cases) a stronger $ is definitely not what Trump wants. A strong $ makes US exports more expensive and is deflationary. Standing against a strong $, though, is a large and growing budget deficit — perhaps he understands this? Hard to say, but tariffs are going to cause all manner of pain for the US consumer and is likely to decimate jobs not bring them back.

  4. “I am beginning to wonder if Trump really is in this for the Big Confrontation.” may need to build that bomb shelter …