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10/09/19

14:48

Post #: 40368424
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Originally posted by Eratosthenes: ↑

Okay, hypotheticals aside.

I will first state that I don't agree with tariffs either, in fact the vast majority of academic economists and mainstream banking economists don't agree with them. We all know that tariffs will ultimately hurt consumer spending. I found it interesting that Trump and his administration have essentially blinked first with the recent announcement to delay and/or suspend indefinitely, some of the proposed tariffs until December 15. Trump and his administration are clearly in the weaker negotiating position now that we all know that Trump and his administration are willing to bluff. If the Chinese see this as a sign of weakness, then the US-China trade war has a long way to run in my opinion.

Now to halt your deviation from the main point made: that currency fluctuations, not necessarily interest rate fluctuations, can be more hurtful to consumer spending. Countries with the highest weighted mean applied tariff wouldn't be more than say ~20%, where as the countries with the lowest weighted mean applied tariff, being 0%, are just a handful of countries like Singapore and Switzerland. I dare say that currency fluctuations, in percentage terms, between the major trading pairs will be greater, over lengthy durations, than the country with the highest weighted mean applied tariff.

Generally speaking any tariffs in place between modern advanced economies pre-Trump, were just a few percent; insignificant to currency volatility.

I am well aware that the world economy is in essence a complex adaptive system (CAS).

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I worked for Australia's biggest Importer at the time MYER. Back in late 70's There were tariffs galore around in those days. It was the pre free trade era. Did not really impact retail spending. Spending is a function of price and available $$. I agree currency levels impact spending and here is an example. Not so long ago the A$ was above 1 against the USD. I am a fly Fisherman. Probably the best gear available comes from the USA. All of a sudden the price of the gear looked very cheap. Bought plenty of good stuff Price was right. Now with an A$ at .68 I do not buy anything from the USA..zip nada..too bloody expensive. However I have a source in China that makes Rods Reels etc at incredibly low prices..good gear also. The currency is almost not a concern. I buy from China. Now say our Govt slapped a tariff on this gear of 100%. Guess what I would still buy from China.
Me thinks you over analyse...Paralysis by analysis. It's pretty simple arithmetic really.

EVN Price at posting: $4.69 Sentiment: Hold Disclosure: Held
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0 Great analysis

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