Trump's Trade War

[Chooky 13340]

Step 1)  Shit on the coffee table.

Step 2)  Clean the shit off the coffee table

Step 3)  Insist that people acknowledge how you improved the coffee table.

[Lurch 5949]

4) Box shit as “Greatest Coffee Table Wax In The History of Ever” and sell it in the White House gift shop.

[Blotto 24013]

5 minutes ago, Lurch said:

4) Box shit as “Greatest Coffee Table Wax In The History of Ever” and sell it in the White House gift shop.***

*** obtain boxed shit from same 3rd world factory workers churning out his shitty ties and campaign flags. 

Edited July 29, 2018 by Blotto

[Hugo Stiglitz 23367]

A day after President Trump hailed “a breakthrough agreement” on trade with Europe, European officials said the president and his aides are exaggerating the scope of their new pact.

While Mr. Trump told an Iowa crowd Thursday that “we just opened up Europe for you farmers,” officials in Brussels later said he did no such thing. 

“On agriculture, I think we’ve been very clear on that—that agriculture is out of the scope of these discussions,” Mina Andreeva, the European Commission spokeswoman, told reporters in Brussels on Friday. “We are not negotiating about agricultural products,” added Ms. Andreeva, who was part of the European delegation visiting Washington earlier this week.

[zork 629]

1 hour ago, Hugo Stiglitz said:

A day after President Trump hailed “a breakthrough agreement” on trade with Europe, European officials said the president and his aides are exaggerating the scope of their new pact.

While Mr. Trump told an Iowa crowd Thursday that “we just opened up Europe for you farmers,” officials in Brussels later said he did no such thing. 

“On agriculture, I think we’ve been very clear on that—that agriculture is out of the scope of these discussions,” Mina Andreeva, the European Commission spokeswoman, told reporters in Brussels on Friday. “We are not negotiating about agricultural products,” added Ms. Andreeva, who was part of the European delegation visiting Washington earlier this week.

Wait, so EU isn't open to our farmers already?  Isn't that the point, on many other similar topics and levels, that Trump was making(before this meeting last week)?  We don't have free trade now and we should have fairer, freer trade.  It won't happen overnight.

[TwiceHorn 32076]

22 hours ago, FWD said:

The most detailed breakdown I've seen is from this FT article:

https://www.ft.com/content/efc1bb08-90f1-11e8-b639-7680cedcc421

Donald Trump’s Rose Garden truce with the EU  has, in the short term, avoided any escalation of a transatlantic trade war and been welcomed from Berlin to Washington by those fearing the economic consequences. But a long-term peace remains distant and vulnerable to the whims of the US president. 

 

The ceasefire announced by Mr Trump and the EU’s Jean-Claude Juncker at the White House on Wednesday calls for discussions over how to reduce tariffs and other trade barriers related to industrial goods other than cars, and to mount a joint push to reform the World Trade Organization.  

 

In a victory for Mr Juncker, it puts further tariffs — including Mr Trump’s threatened 20 per cent levy on auto imports— on hold while talks proceed. Yet it is unclear what the US president gets out of it other than a short-term political win at a time when he is under fire over his trade policies at home.

 

... read more at https://www.ft.com/content/efc1bb08-90f1-11e8-b639-7680cedcc421 

 

 

 

Slightly OT, but what's wrong with the WTO that requires reform?  The only thing that comes to me off the top of my head is ineffectiveness at making Chinese behave.  But I'm not sure that's their remit.

 

Answering my own question, alluded to above, it's China.  https://www.economist.com/leaders/2018/07/19/how-to-rescue-the-wto

Edited July 29, 2018 by TwiceHorn

[sheeeit 129]

On 7/26/2018 at 2:46 PM, DixonHur said:

 

 

Once again Swam shows his ass when trying to argue economics. 

His ignorance on the subject is astounding...and impressive. 

Your 3 posts are about 3 unrelated activities. 

1. Trade deficits don't mean what you seem to think they do and, in and of themselves, are not bad...but don't take my word for it, read what the libtards over at the CATO Institute wrote back in 1998
2. "Government-subsidized lending" encompasses things like FHA home loans, student loans, and SBA loans, not subsidies to major corporations; which are more often than not, grants and tax incentives, not loans...had you read the article you posted, you may have been able to figure that out.
3. We borrow money from other countries because we have a budget deficit, not because of the trade deficit.  The only relation is that a large part of our budget deficit is due to tax cuts, and protectionist tactics such as farm subsidies, etc.

Putting aside your fundamental misunderstanding of how it all works, please let us know which "heavily tariffed" goods the US government is buying from Europe?

 

Quote

A trade deficit means we have a surplus of capital that is due to the inflow of foreign investment. This a good thing as it's a sign of a healthy economy. There is nothing wrong with a trade deficit. Trade deficits accompany economic expansions. Our domestic demand for goods and services is outpacing our domestic supply so we import, in turn we receive foreign investment from the money spent on imports. In other words, the money we spent on imports returns back to our economy plus our consumers benefit from the lower cost of out sourcing the production of goods and services. It's a win/win situation.

Quote

Once again Swam shows his ass when trying to argue economics. 

His ignorance on the subject is astounding...and impressive. 

Your 3 posts are about 3 unrelated activities. 

Trade deficits don't mean what you seem to think they do and, in and of themselves, are not bad...but don't take my word for it, read what the libtards over at the CATO Institute wrote back in 1998

"Government-subsidized lending" encompasses things like FHA home loans, student loans, and SBA loans, not subsidies to major corporations; which are more often than not, grants and tax incentives, not loans...had you read the article you posted, you may have been able to figure that out.

We borrow money from other countries because we have a budget deficit, not because of the trade deficit.  The only relation is that a large part of our budget deficit is due to tax cuts, and protectionist tactics such as farm subsidies, etc.

Putting aside your fundamental misunderstanding of how it all works, please let us know which "heavily tariffed" goods the US government is buying from Europe?

Quote

This is an elegant explanation for something I've tried to explain to Swam and others before, and so is @DixonHur's post above. Unfortunately, swam don't potato economics.

Swam may get an F for some of his economic posts but the rest of you barely get Ds.  You are basically just as guilty as swam for cherry picking data and then using the cherry picked data out of context.

Using the BOP as an example of our current economic health is very deceiving and I actually expected some of you to know better.

It is true that trade deficits are not always bad and not always a sign of economic sickness.  As the CATO article pointed out, when an economy is growing and expanding, it often gets into trade deficits so that it can get the goods/materials/resources it needs to keep pace with its expansion.  BUT, that is only good in the short term.  The win comes when an economy expands enough and grows enough to eventually switch the balance of trade with other economies.  Long term trade deficits are a death knell to any economy.

Think of it like a small company that takes on a bunch of debt in order to add new machinery or expand a new product line or similar.  In the short term, that company will be adding debt at a much higher rate than it is adding income.  It will have a "trade imbalance" as it buys new expensive machinery or takes on new people to a point where the new stuff is more expensive than what it is currently producing.  But that is ok as long as the company can then use the new machinery and new product line to eventually bring in more money than it cost to add the new stuff.  

Using the BOP graph is completely bogus.  It is certainly correct that a surplus balance of payments is a good thing as long as the foreign investment is actually an investment.  If the bulk of the balance was actually foreign govts and entities buying US real estate or US companies or US services then it would truly be a great thing.  But it is not that.  If we remove things like purchases of US treasuries from foreign govts from our BOP we would be way underwater.  We are currently selling treasuries NOT to stimulate growth or make investment in our country.  We are selling them to service our debt first and foremost and then to supplement our ability to make payroll.  We are not adding new machinery to position ourselves to be the big dog in the future.  We are simply taking on debt to stay alive.  

On tariffs, it is universally agreed that tariffs for the sake of tariffs is a bad idea and, ultimately counter productive.  This is especially true if the tariffs are long term in nature.  What trump is doing is using the threat of tariffs to get a more level playing field in our trade with other countries.  This may or may not be a good strategy, it is way too early to tell.  But it is not too early to tell that the course we have been on previously is not working at all.

There is certainly a chance that trump's strategy will work.  He may be able to leverage tariffs and access to the US markets to get fairer trade deals.  I do not believe any country would ever agree to straight up free trade with no tariffs or subsidies.  I think they know that the american machine and work ethic and ingenuity etc will win a fair fight more times than not.  So we will never get to that point but we might get a lot closer which will certainly help america.

 

 

 

[Message Board User 12405]

Another article that can explain trade deficits and surpluses to the masses...if they choose to read.

 

[kopp0e 1135]

 

[Post Oak 20560]

23 minutes ago, kopp0e said:

 

Good fuck em.  This shit strengthens me. I could watch these every day.  I wonder how that good american is feeling around the holidays.  Merry Christmas motherfucker

 

[Doc Sam Beckett 5905]

4 minutes ago, Post Oak said:

Good fuck em.  This shit strengthens me. I could watch these every day.  I wonder how that good american is feeling around the holidays.  Merry Christmas motherfucker

 

This is why I think Brisket might actually be on to something with his doomsday prophecies. It used to be if you touched their wallet, the voters would end you, but here these morons are just smiling while eating shit. 

[kopp0e 1135]

10 minutes ago, Post Oak said:

Good fuck em.  This shit strengthens me. I could watch these every day.  I wonder how that good american is feeling around the holidays.  Merry Christmas motherfucker

 

 

5 minutes ago, Doc Sam Beckett said:

This is why I think Brisket might actually be on to something with his doomsday prophecies. It used to be if you touched their wallet, the voters would end you, but here these morons are just smiling while eating shit. 

I just think some people want to see the "hope" that Trump brings. even at the detriment of their own income... #HappyInSlop

[Hugo Stiglitz 23367]

It’s just amazing watching these farmers buy into the most obvious con of all time.  It’s really hard to have any sympathy especially when their gullibility is responsible for this disaster.

[Mapache 1117]

Local farmer calls it like he sees it

"The world markets, which the president is now tearing down in the name of fairness, were built and paid for by farmers to ensure agriculture had outlets for our production so we didn’t have to come to the American taxpayer for support.

We keep hearing about the “Art of the Deal.” I’m waiting for the “Art” portion. Using a club to bludgeon our trading partners and allies is not negotiating. It’s nothing more than a playground bully stomping around to see who will flinch."

https://www.sidneydailynews.com/opinion/columns/112560/local-farmer-calls-it-like-he-sees-it

His buddies down at the local "feed and seed" aren't gonna take too kindly to that article....

 

Edited July 29, 2018 by Mapache

[LongestHorn 772]

The ironic hipster in me wants that new cap.

[Mojo Hand 4580]

51 minutes ago, LongestHorn said:

The ironic hipster in me wants that new cap.

Well, buy him one when he pulls out.

[F250 29199]

4 hours ago, kopp0e said:

 

Welp... agreeing to be cannon fodder is a hell of a choice.

[Fudge Nuggets 19453]

12 hours ago, sheeeit said:

 

Swam may get an F for some of his economic posts but the rest of you barely get Ds.  You are basically just as guilty as swam for cherry picking data and then using the cherry picked data out of context.

Using the BOP as an example of our current economic health is very deceiving and I actually expected some of you to know better.

It is true that trade deficits are not always bad and not always a sign of economic sickness.  As the CATO article pointed out, when an economy is growing and expanding, it often gets into trade deficits so that it can get the goods/materials/resources it needs to keep pace with its expansion.  BUT, that is only good in the short term.  The win comes when an economy expands enough and grows enough to eventually switch the balance of trade with other economies.  Long term trade deficits are a death knell to any economy.

Think of it like a small company that takes on a bunch of debt in order to add new machinery or expand a new product line or similar.  In the short term, that company will be adding debt at a much higher rate than it is adding income.  It will have a "trade imbalance" as it buys new expensive machinery or takes on new people to a point where the new stuff is more expensive than what it is currently producing.  But that is ok as long as the company can then use the new machinery and new product line to eventually bring in more money than it cost to add the new stuff.  

Using the BOP graph is completely bogus.  It is certainly correct that a surplus balance of payments is a good thing as long as the foreign investment is actually an investment.  If the bulk of the balance was actually foreign govts and entities buying US real estate or US companies or US services then it would truly be a great thing.  But it is not that.  If we remove things like purchases of US treasuries from foreign govts from our BOP we would be way underwater.  We are currently selling treasuries NOT to stimulate growth or make investment in our country.  We are selling them to service our debt first and foremost and then to supplement our ability to make payroll.  We are not adding new machinery to position ourselves to be the big dog in the future.  We are simply taking on debt to stay alive.  

On tariffs, it is universally agreed that tariffs for the sake of tariffs is a bad idea and, ultimately counter productive.  This is especially true if the tariffs are long term in nature.  What trump is doing is using the threat of tariffs to get a more level playing field in our trade with other countries.  This may or may not be a good strategy, it is way too early to tell.  But it is not too early to tell that the course we have been on previously is not working at all.

There is certainly a chance that trump's strategy will work.  He may be able to leverage tariffs and access to the US markets to get fairer trade deals.  I do not believe any country would ever agree to straight up free trade with no tariffs or subsidies.  I think they know that the american machine and work ethic and ingenuity etc will win a fair fight more times than not.  So we will never get to that point but we might get a lot closer which will certainly help america.

 

 

 

Are you really this stupid or is it an act?

I pay a million bucks for some gizmo from Hong Kong that makes rubber dogshit.  I manufacture and sell two million dollars worth of rubber dog shit here in America. My company is in the black by a million bucks but we have a million dollar trade deficit. The trade deficit means fuck all in this case. 

[Aqua Buddha 14806]

I don't feel sorry for these farmers.  Trump has been talking about tariffs for literally 20 years dating back to when he was somewhat coherent.  It's the one true belief that he has.  (Probably anti immigration at this point, but that's a different story.)  Trump carried farm country bigly to the point I'd be surprised if any farmers actually voted for Hillary at all.

Elections have consequences.

That CBS News story brought the lulz, though.  They just couldn't bring themselves to not support Trump even after admitting they were teetering on the edge of bankruptcy.  They talk a good game but what until the first bank payment is due.

Edited July 30, 2018 by Aqua Buddha

[Js1 87178]

3 hours ago, Fudge Nuggets said:

Are you really this stupid or is it an act?

I pay a million bucks for some gizmo from Hong Kong that makes rubber dogshit.  I manufacture and sell two million dollars worth of rubber dog shit here in America. My company is in the black by a million bucks but we have a million dollar trade deficit. The trade deficit means fuck all in this case. 

I used to think sheeeeit was an act.

I think he is just truly stupid. But he's just asking questions.

[Nice Guy Eddie 13729]

29 minutes ago, Aqua Buddha said:

I don't feel sorry for these farmers.  Trump has been talking about tariffs for literally 20 years dating back to when he was somewhat coherent.  It's the one true belief that he has.  (Probably anti immigration at this point, but that's a different story.)  Trump carried farm country bigly to the point I'd be surprised if any farmers actually voted for Hillary at all.

Elections have consequences.

That CBS News story brought the lulz, though.  They just couldn't bring themselves to not support Trump even after admitting they were teetering on the edge of bankruptcy.  They talk a good game but what until the first bank payment is due.

They haven't been hurt enough yet to admit they were wrong.   Corporate farms are waiting in the wings to buy out these smaller farmers.  The large farming corps will face a couple of bad quarters, perhaps some layoffs but this will be good for them in the long run as they can grab more market share.  The tariffs won't last forever.   Side question:  Any thoughts on what ag stocks will benefit from the tariff?   might be a good time to buy.

What boggles my mind is that Trump could have some strong arguments on many Chinese existing policies, where are hurting American businesses.   Instead he vaguely mentions them, and then criticizes China for their retaliatory tariffs, which he started in the first place.    

but then again Trump doesn't apply to minds but emotions.  Time to show them Chinese that they can't retaliate against Americans and not pay a further price.  More tariffs!

[27-25 2085]

6 hours ago, Fudge Nuggets said:

I manufacture and sell two million dollars worth of rubber dog shit here in America.

User name checks out.

[atomheartbevo 90641]

2 hours ago, Nice Guy Eddie said:

They haven't been hurt enough yet to admit they were wrong.   Corporate farms are waiting in the wings to buy out these smaller farmers.  The large farming corps will face a couple of bad quarters, perhaps some layoffs but this will be good for them in the long run as they can grab more market share.  The tariffs won't last forever.   Side question:  Any thoughts on what ag stocks will benefit from the tariff?   might be a good time to buy.

Not to mention that the larger corporations have multinational interests, and so a downturn in Murica can be offset elsewhere.

But yeah, it's going to be a shame to see more family farms going under.

[Royalfan5 2384]

So as someone who actually works with Family Farmers(along with backgrounding cattle myself) here and talks about grain and livestock marketing in the national media from time to time, I think a lot of the dire predictions are pretty heavily overstated. We had prices at levels that worked for most guys through June. Coming forward the world feed grain stocks are significantly tighter, and we've seen a pretty strong rally the last couple of weeks, as we build that in, along with the potential for a poor finish to the crop year, all which could pretty easily put Ag commodity values back to new highs for the year into fall. 

Are the tariffs great, No, but demand is still pretty strong, and if money is there to get made it will get made. We will likely see soybeans run through Vietnam or some other Asian county to dodge tariffs. (We've seen that with distillers grains in the past), along with logistics reshuffling. The biggest threat is that a prolonged trade war collapses demand, which can't be worked around. 

 

[Orca of Peace 109]

16 hours ago, LongestHorn said:

The ironic hipster in me wants that new cap.

ebay has it https://www.ebay.com/itm/Make-Our-Farmers-Great-Again-Hat-Donald-Trump-America-Snapback-Baseball-Cap-USA/263833355283?hash=item3d6db18413%3Ag%3ASQoAAOSwfztbVjmc%3Asc%3AUSPSFirstClass!75013!US!-1&_sacat=0&_nkw=make+farmers+great+again&_from=R40&rt=nc&_trksid=m570.l1313

Edited July 30, 2018 by Orca of Peace

[Grandioso 2592]

 

[sheeeit 129]

6 hours ago, Fudge Nuggets said:

Are you really this stupid or is it an act?

I pay a million bucks for some gizmo from Hong Kong that makes rubber dogshit.  I manufacture and sell two million dollars worth of rubber dog shit here in America. My company is in the black by a million bucks but we have a million dollar trade deficit. The trade deficit means fuck all in this case. 

Calling out someone for being stupid and not understanding the issue is a bold strategy.  You clearly have exactly no idea what we are discussing.

In your scenario above, why in the hell would you say that your company has a "million dollar trade deficit" after being in the black?  You do understand that when you manufacture and sell your rubber dogshit that you are entering into a trade surplus right?  That is the whole point you dumbass.  It is ok to have trade deficits when you are growing or are positioning yourself for future growth.  Your company has a trade deficit in year 1 when you buy the million dollar gizmo.  You spent more money bringing in goods than you made selling them.  But when you start selling the dog shit in years 2 and 3 and making a profit your company now has a trade surplus.  You are selling more items than you are buying and making a profit.  

 

 

[Royalfan5 2384]

8 minutes ago, Grandioso said:

 

It’s not that hard for a journalist to find people to say what they want them to say. 

[sheeeit 129]

3 minutes ago, Royalfan5 said:

It’s not that hard for a journalist to find people to say what they want them to say. 

Pos rep.  This point is so badly understood by the masses that it is comical.  

[Dahobbs 18316]

9 minutes ago, sheeeit said:

Calling out someone for being stupid and not understanding the issue is a bold strategy.  You clearly have exactly no idea what we are discussing.

In your scenario above, why in the hell would you say that your company has a "million dollar trade deficit" after being in the black?  You do understand that when you manufacture and sell your rubber dogshit that you are entering into a trade surplus right?  That is the whole point you dumbass.  It is ok to have trade deficits when you are growing or are positioning yourself for future growth.  Your company has a trade deficit in year 1 when you buy the million dollar gizmo.  You spent more money bringing in goods than you made selling them.  But when you start selling the dog shit in years 2 and 3 and making a profit your company now has a trade surplus.  You are selling more items than you are buying and making a profit.  

 

 

What? The company is not selling them in Hong Kong. There is nothing cancelling out the trade deficit with Hong Kong.

[TornACL 7792]

10 minutes ago, Royalfan5 said:

It’s not that hard for a journalist to find people to say what they want them to say. 

Agreed. These articles are so lazy, and always have been.

[sheeeit 129]

4 minutes ago, Dahobbs said:

What? The company is not selling them in Hong Kong. There is nothing cancelling out the trade deficit with Hong Kong.

No shit.  You are selling them to someone else.  You will have a NET surplus trade position.  It is entirely normal and customary to have different trade positions with different people.

If the US has a $100B trade deficit with China but a $200B trade surplus with everyone else then we do not have a problem.  But we do not.  We have a massive NET trade deficit that is unsustainable.

In the example above the company will have a trade deficit with Hong Kong.  In this example we are using, virtually every business will have a trade deficit with their suppliers, (unless there is some weird contract where suppliers buy back finished goods) they have to.  But they then sell the manufactured goods to other people and they will have trade surpluses with those people and the net position will be a surplus.

[Grandioso 2592]

Not just an article. Refer to the trumpian automaton farmers in the above video.

 

They want to fall on the sword for their leader, just like they would have if Obama started the trade war.

 

They are so sincere.

 

Sent from my iPhone using Tapatalk

 

[Royalfan5 2384]

6 minutes ago, Grandioso said:

Not just an article. Refer to the trumpian automaton farmers in the above video.

 

They want to fall on the sword for their leader, just like they would have if Obama started the trade war.

 

They are so sincere.

 

Sent from my iPhone using Tapatalk

 

And you could find a group of farmers to do a fuck Trump video. It wouldn't be hard at all. 

[Orca of Peace 109]

7 minutes ago, Grandioso said:

Not just an article. Refer to the trumpian automaton farmers in the above video.

 

They want to fall on the sword for their leader, just like they would have if Obama started the trade war.

 

They are so sincere.

 

Sent from my iPhone using Tapatalk

 

lol good one there... it truly is partisanship 100%. had Obama done something to damage farmers, we'd have a farmer rebellion in the heartland. 

[FondrenRoad 4378]

11 minutes ago, sheeeit said:

No shit.  You are selling them to someone else.  You will have a NET surplus trade position.  It is entirely normal and customary to have different trade positions with different people.

If the US has a $100B trade deficit with China but a $200B trade surplus with everyone else then we do not have a problem.  But we do not.  We have a massive NET trade deficit that is unsustainable.

In the example above the company will have a trade deficit with Hong Kong.  In this example we are using, virtually every business will have a trade deficit with their suppliers, (unless there is some weird contract where suppliers buy back finished goods) they have to.  But they then sell the manufactured goods to other people and they will have trade surpluses with those people and the net position will be a surplus.

You're confused because they both have the word balance, but a national trade balance shares nothing in common with a corporate balance sheet. 

You also underestimate, or simply dont know, the value of a trade deficit when it comes to maintaining the dollar as the primary global reserve currency. We arent buying Chinese goods with yuan.

[Aqua Buddha 14806]

Listening to those Truman farmers reminds me of the Okie teachers.  Some of them had voted exclusively Republican for the last 15 years and found themselves working 3 jobs while cleaning the bathrooms at their schools yet still could not, for any reason at all, imagine voting for anyone but a Republican in the next election.

Myself and others are assuming the Trumpkin farmers will flip when the bills come due or harvest revenue comes in 20% light but Battered Spouse Syndrome is strong with some people and we might be underestimating that.

[Bozo_Casanova 26846]

19 hours ago, sheeeit said:

 

Swam may get an F for some of his economic posts but the rest of you barely get Ds.  You are basically just as guilty as swam for cherry picking data and then using the cherry picked data out of context.

Using the BOP as an example of our current economic health is very deceiving and I actually expected some of you to know better.

It is true that trade deficits are not always bad and not always a sign of economic sickness.  As the CATO article pointed out, when an economy is growing and expanding, it often gets into trade deficits so that it can get the goods/materials/resources it needs to keep pace with its expansion.  BUT, that is only good in the short term.  The win comes when an economy expands enough and grows enough to eventually switch the balance of trade with other economies.  Long term trade deficits are a death knell to any economy.

Think of it like a small company that takes on a bunch of debt in order to add new machinery or expand a new product line or similar.  In the short term, that company will be adding debt at a much higher rate than it is adding income.  It will have a "trade imbalance" as it buys new expensive machinery or takes on new people to a point where the new stuff is more expensive than what it is currently producing.  But that is ok as long as the company can then use the new machinery and new product line to eventually bring in more money than it cost to add the new stuff.  

Using the BOP graph is completely bogus.  It is certainly correct that a surplus balance of payments is a good thing as long as the foreign investment is actually an investment.  If the bulk of the balance was actually foreign govts and entities buying US real estate or US companies or US services then it would truly be a great thing.  But it is not that.  If we remove things like purchases of US treasuries from foreign govts from our BOP we would be way underwater.  We are currently selling treasuries NOT to stimulate growth or make investment in our country.  We are selling them to service our debt first and foremost and then to supplement our ability to make payroll.  We are not adding new machinery to position ourselves to be the big dog in the future.  We are simply taking on debt to stay alive.  

On tariffs, it is universally agreed that tariffs for the sake of tariffs is a bad idea and, ultimately counter productive.  This is especially true if the tariffs are long term in nature.  What trump is doing is using the threat of tariffs to get a more level playing field in our trade with other countries.  This may or may not be a good strategy, it is way too early to tell.  But it is not too early to tell that the course we have been on previously is not working at all.

There is certainly a chance that trump's strategy will work.  He may be able to leverage tariffs and access to the US markets to get fairer trade deals.  I do not believe any country would ever agree to straight up free trade with no tariffs or subsidies.  I think they know that the american machine and work ethic and ingenuity etc will win a fair fight more times than not.  So we will never get to that point but we might get a lot closer which will certainly help america.

OFFS.

Stop conflating trade and budget deficits. 

I have a trade deficit with HEB all the time. 

If I spend more than I make and use a credit card at the grocery store that's a budget deficit.  It's the result of an imbalance of income and spending irrespective of trade.

Long term budget deficits can be unsustainable. Trade deficits are only unsustainable under a set of conditions that you aren't in a position to discuss until you understand the basic distinction above and where they touch each other.

And for the record, in this hemisphere we capitalize "America".

[WhatTheBuck 28928]

1 hour ago, Royalfan5 said:

So as someone who actually works with Family Farmers(along with backgrounding cattle myself) here and talks about grain and livestock marketing in the national media from time to time, I think a lot of the dire predictions are pretty heavily overstated. We had prices at levels that worked for most guys through June. Coming forward the world feed grain stocks are significantly tighter, and we've seen a pretty strong rally the last couple of weeks, as we build that in, along with the potential for a poor finish to the crop year, all which could pretty easily put Ag commodity values back to new highs for the year into fall. 

Are the tariffs great, No, but demand is still pretty strong, and if money is there to get made it will get made. We will likely see soybeans run through Vietnam or some other Asian county to dodge tariffs. (We've seen that with distillers grains in the past), along with logistics reshuffling. The biggest threat is that a prolonged trade war collapses demand, which can't be worked around. 

 

So what you're saying is that we shouldn't be giving $12 Billion in welfare to the farmers? I'm down with that. 

[Bozo_Casanova 26846]

39 minutes ago, sheeeit said:

No shit.  You are selling them to someone else.  You will have a NET surplus trade position.  It is entirely normal and customary to have different trade positions with different people.

If the US has a $100B trade deficit with China but a $200B trade surplus with everyone else then we do not have a problem.  But we do not.  We have a massive NET trade deficit that is unsustainable.

In the example above the company will have a trade deficit with Hong Kong.  In this example we are using, virtually every business will have a trade deficit with their suppliers, (unless there is some weird contract where suppliers buy back finished goods) they have to.  But they then sell the manufactured goods to other people and they will have trade surpluses with those people and the net position will be a surplus.

[sheeeit 129]

10 minutes ago, FondrenRoad said:

You're confused because they both have the word balance, but a national trade balance shares nothing in common with a corporate balance sheet. 

LOL.  Thanks for the tip Einstein.  I am not confused about anything.  We are using an overly simplified example to make a point.

 

21 minutes ago, FondrenRoad said:

You also underestimate, or simply dont know, the value of a trade deficit when it comes to maintaining the dollar as the primary global reserve currency. We arent buying Chinese goods with yuan.

This is getting way in the financial weeds and I have zero interest in debating it with you.  There are a myriad of things that maintain the dollar as the reserve currency.  

[Bozo_Casanova 26846]

34 minutes ago, FondrenRoad said:

 

You also underestimate, or simply dont know, the value of a trade deficit when it comes to maintaining the dollar as the primary global reserve currency. We arent buying Chinese goods with yuan.

The importance of this cannot be overstated. What makes our both our debt and various balances of payments different from PIGS and everyone else is that it's denominated in our own currency. It means that the more US debt a creditor holds the more important it is for them to help us avoid a hyper inflationary devaluation. 

[Bozo_Casanova 26846]

8 minutes ago, sheeeit said:

This is getting way in the financial weeds 

no, this is just super basic stuff. Like this is the kind of thing I talk with my daughter the 9th grader about.  

[Royalfan5 2384]

11 minutes ago, WhatTheBuck said:

So what you're saying is that we shouldn't be giving $12 Billion in welfare to the farmers? I'm down with that. 

Yes. By the time, they get around to doing anything on it, the market will probably be close to fully recovered anyway. 

[GRHorn 105]

Interesting commentary here from WSJ  

https://www.wsj.com/articles/china-is-losing-the-trade-war-with-trump-1532729725

One thing came through loud and clear in President Trump’s press conference Wednesday with European Commission President Jean-Claude Juncker. When they announced an alliance against third parties’ “unfair trading practices,” they didn’t even have to mention China by name for listeners to know who their target was. Cooperation between the U.S. and EU will squeeze China’s protectionist model, and even before this agreement, there’s been evidence that China is already running up the white flag. 

Yes, China is acting tough in one sense, quickly imposing tariffs in retaliation for those enacted by the Trump administration. But while U.S. stocks approach all-time highs and the dollar grows stronger, Chinese stocks are in a bear market, down 25% since January. The yuan had its worst single month ever in June, and is well on its way to a repeat this month. Chinese corporate bonds have defaulted at a record rate in the past six months, yet this week China unveiled a new stimulus program designed to encourage even more corporate borrowing.

That’s probably why Yi Gang, a governor of the People’s Bank of China, took the extraordinary step of channeling Herbert Hoover, saying in a statement this month that “the fundamentals of China’s economy are sound.” And it’s why Sun Guofeng, head of the PBOC’s financial research institute, said, China “will not make the yuan’s exchange rate a tool to cope with trade conflicts.”

Weakening one’s currency is a standard weapon in trade wars, and one that China has often been accused of using—including in a tweet by Mr. Trump last week. Devaluation would be even more dangerous in this case because of China’s power to dump the $1.4 trillion in U.S. Treasury securities it holds. But by denying its intention to plunge the yuan, China has disarmed itself voluntarily. This was no act of noble pacifism; it had to be done. Devaluing the currency would risk scaring investors away, an existential threat to an emerging economy. For China, whose state-capitalism model has so far never produced a recession, such capital flight might expose previously hidden economic weaknesses.

PHOTO: ISTOCK/GETTY IMAGES

These weaknesses accumulate without the market discipline that occasional recessions impose. The fragility of China’s economy can be seen in its growth rate, which is slowing despite rising financial leverage, and in its overinvestment in commodities and real estate. The escalating trade war with the U.S. could tip China into the unknown territory of recession—and then capital flight could push it into a financial crash and depression. That would create mass joblessness in an economy that has never recorded unemployment higher than 4.3%. With that scenario in mind, the Chinese government must be wondering whether it has enough riot police. 

The risk of capital flight is real. The last time China let the yuan weaken—a slide that began in early 2014 and was punctuated in mid-2015 by the abandonment of the dollar peg in favor of a basket of currencies—the Chinese ended up losing almost $1 trillion in foreign reserves, which they have yet to recover. Now the sharp weakening of the yuan shows some degree of capital flight again is under way. 

 

No wonder that, despite tough talk from some quarters, the PBOC disarmed itself voluntarily to avoid further capital flight. The bank also is already offering to reimburse local firms for tariffs on imported U.S. goods. What’s more, China has put out a yard sign for international investors by announcing unilateral easing of foreign-ownership restrictions in some industries.

China is beginning to realize that trade war isn’t really war. It’s more like a drinking contest at a fraternity: the game is less inflicting harm on your opponent than inflicting it on yourself, turn by turn. In trade wars, nations impose burdensome import tariffs on themselves in the hope that they’ll be able to stomach the pain longer than their competitor. 

Why play such a game? Because a carefully chosen act of self-harm can be an investment toward a worthy goal. For example, President Reagan’s arms race against the Soviet Union in the 1980s was in some sense a costly self-imposed tax. But it turned out the U.S. could bear the burden better than the Soviets could—Uncle Sam eventually out-drank the Russian bear and won the Cold War.

The U.S. will win the trade war with China in the same way. The PBOC’s statements show that the Chinese understand they are too vulnerable to take very many more drinks. The only question is what they will be willing to offer Mr. Trump to get him to take yes for an answer. No wonder Beijing has ordered its state-influenced media to stop demonizing Mr. Trump—officials are desperate to minimize the pain when President Xi Jinping has to cut the inevitable deal. 

The drinking-contest metaphor takes us only so far. The wonderful thing about reciprocal trade is that it is a positive-sum game in which all contestants are made better off. If the conflict forces China to accept more foreign investors and goods, comply with World Trade Organization rules, and respect foreign intellectual property, it may feel it has lost but will in fact be better off. With this openness, both economic and political, China could spur a decadeslong second wave of growth that would bring hundreds of millions still living in rural poverty into glittering new cities.

It took Nixon to go to China and show it the way to the 20th century. Now, through the unlikely method of trade war, Donald Trump is ushering China into the 21st century.

[F250 29199]

 

 

[F250 29199]

1 hour ago, Bozo_Casanova said:

OFFS.

Stop conflating trade and budget deficits. 

I have a trade deficit with HEB all the time. 

If I spend more than I make and use a credit card at the grocery store that's a budget deficit.  It's the result of an imbalance of income and spending irrespective of trade.

Long term budget deficits can be unsustainable. Trade deficits are only unsustainable under a set of conditions that you aren't in a position to discuss until you understand the basic distinction above and where they touch each other.

And for the record, in this hemisphere we capitalize "America".

Solid post. Sheeeit has been showing his ass in here without even realizing it.

 

[Brisketexan 106886]

6 minutes ago, F250 said:

Solid post. Sheeeit has been showing his ass in here without even realizing it.

 

Which is why nobody has been stopping him.  Just reading his posts, shaking our heads, and moving on.

[Nice Guy Eddie 13729]

1 hour ago, Aqua Buddha said:

Listening to those Truman farmers reminds me of the Okie teachers.  Some of them had voted exclusively Republican for the last 15 years and found themselves working 3 jobs while cleaning the bathrooms at their schools yet still could not, for any reason at all, imagine voting for anyone but a Republican in the next election.

Myself and others are assuming the Trumpkin farmers will flip when the bills come due or harvest revenue comes in 20% light but Battered Spouse Syndrome is strong with some people and we might be underestimating that.

In fairness, this occurs on the other side as well.  Plenty of Dem policies do little to raise many out of poverty but some of the poor cling to the Dems because they see Dems as their only lifeline.  

[Lagunamadre 1975]

1 hour ago, Royalfan5 said:

Yes. By the time, they get around to doing anything on it, the market will probably be close to fully recovered anyway. 

Since this is your space, what are you thoughts on non-Chinese ag markets. Not only soy beans but any other products that are farmers are losing Chinese demand. Will there be enough demand from the rest of the world to replace the Chinese? If so, how long do you think that will take to normalize?