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Re trade war with China: regardless of whether Congress votes to enact the 28% tariff on PRC imports, the damage is done. IMO China is preparing for this eventuality behind-the-scenes by diversifying away from USD holdings (treasuries) into euros, gold, etc.

 

But beyond the saber-rattling symbolism, will the tariffs actually hurt China? One thing to keep in mind is that much of Chinese imports are sold as OEM products (not as their own brands) through major retailers like Walmart, Macy's, etc. using third-party distributors that are not necessarily Chinese. So it would seem that while distributor margins might be squeezed, the impact on local mfgrs is unclear.

 

Also, the real beneficiary of tariffs will NOT be US competitors (which outsource from China anyways, in many cases) but other low-cost centers like Vietnam, Malaysia, Thailand where production may shift. With regard to more strategic industries like hi-tech, the tariffs are likely to slow the pace of foreign direct investment, but not stop it altogether given the increasing focus on domestic (PRC) consumption for high-tech goods.

 

Which raises another important point: to the Chinese, FDI (foreign capex investment) is a much more significant long-term development tool as trade profits, esp. in expanding strategic manufacturing capabilities (through technology inducement) and creating employment. As long as FDI continues at its record-breaking pace, the tariffs will have little impact IMO. And there is NO politician in DC who has the political will to stand up to the Fortune 500 companies that are in a stampede to invest in China.

 

Certainly, Chinese mfgrs may see a slowdown in export demand, but keep in mind this is a country and people that sacrificed several hundred thousand soldiers in the Korean War (several X US' casualties) to defend their borders from US encroachment. Even an extreme (and self-defeating) protectionist move like tariffs is unlikely to halt their momentum.

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Mouse!!!

 

HRFF is glad ya weren't here, TOO! lolol

 

Just KIDDING, Mouse!

 

HONEST!!!

 

BTW: MOUSE is a Red Guard/Cultural Revolution behavioral rectification endeavor gone HORRIBLY WRONG. lolol

 

oh. on a more SERIOUS NOTE as in DIRE:

 

That ASStro guy is making ominous noises. At least nothing truly catASStrophic happened this weekend (so FUR) as he expected.

 

ASS HRFF hASS said beFUR: Keep your eye on the dollar...it may be the Achilles' heel FUR the bulls hopes. It WILL be, sooner or later. Maybe sooner than almost anyone thinx.

 

"Mo" indicators point down FUR weeks.

 

"Ain' no mo' "mo", no mo'."?

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OK guys--enlighten me! If the Fed could possibly drive interest rates down to near zero, a la the Japanese, given our ever expanding external and internal debts (something which the Japanese don't have to worry about), who the hell will buy our debt, given that the rate of return in both imagined and real terms will be negative. . .and made worse by a plunging dollar (you can debate whether dollar will rally anew from here at current rate levels, but please who among the foreign holders would want to hold all those excessive dollars for a lousy 1% or less return).

The Fed may have some elasticity tricks up its sleeve to once again levitate this market in subsequent months, but they can contain these growing global imbalances only so long. Business can only talk about the so called recovery only so long. And foreigners will hold our securities for only so long before one group of them gets the bright idea to get to the exit door before others do.

This story may shed some light on what happened to retirement plans in Japan when you have 0% interest rates. The story implies that even the saving public of Japan needs returns of at least 3.5% per year to meet retirement plan goals.

 

On His Shoulders, a Graying Japan

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Tell me BARE, (I ASS U ME you mean by that Asto guy, your DEER friend, Arch). I'm curious, how many times has he killed me and the other wacks in NYC off in the last year or so. I thought it was only cats who had nine lives?? :wink2:

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Trade war? I'm starving to death in a cardboard box...why? the Chinese... those cheaters, they never played on a level playing field...

 

What the average American will think after being shaken upsidedown over a wheelbarrel...

?

 

I'd be interested in hearing how the Chinese nation is responsible for your personal housing and dining situation.

It is the you are with us or with the Chinese tenant of pata economics

 

Don't watch US news? According to "them" the economic problems in the US are because the Chinese are cheaters who don't play on a level playing field...

 

I'm just repeating what we are all supposed to believe, because if you question it like everyone else here is... then you are either with us (The US administration) or an anti american terrorist...or a Red Chinese Commie sympathizer... an enemy combatant basically...

 

Don't you know it is impossible for the USA to ever have done anything wrong or do anything wrong? It is everyone in the rest of the world's fault by default...

 

Just like every cold front from the north is Canada's fault...

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Do you have anything beyond anecdotal evidence to support anything's ability to predict these patterns or market direction?

Do a search on Google for "behavioural finance" + "technical analysis".

 

Enjoy!!

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