Its Over

Originally posted by 1ronnie: ↑

Chinese insurance companies could end up buying 8-10% of global supply of gold per year. Just them alone. This 300 tonnes estimated boost would have China purchasing more than half the world’s gold per year.

The USA can tariff the Chinese is all they want. It won’t ever make the Chinese population buy goods or services from the USA that are labour intensive. People need to give their heads a shake! The relative labour costs in China are 86% lower. So when it comes to labour, it’s 7x more expensive for Chinese people to pay USA citizens to make stuff for them then make it themselves.

What will happen when the USA tries to force the nation to balance trade? Well, you can bet that they will buy energy intensive products. Goods that consume huge amounts of energy relative to over all cost. This folks is why they will be buying up commodities of all sorts from the USA and it will drive inflation higher. Balance trade will only come if they buy LNG, oil, coal, fertilizer, petrochemicals, and metals of all sorts. This will drive up the cost of everything in the USA.

The talk of ‘subsidizing’ other nations by sending money via a trade deficit is a comical take on what’s actually been occurring in reality. The world has been subsidizing the USA consumer by accepting fiat currency that flows overseas. The USA sends them dollars created out of thin air and everyone else sends manufactured goods. Boat loads of electronics, manufactured goods and textiles of all sorts. Where does the money go? Well it’s been piled up in USA treasury bonds giving the USA an artificially low interest rate to borrow and fund businesses and the consumer. Housing prices and home equity loans. Imagine that tap getting turned off. What higher interest rates would do to the economy?

It also gets invested in the stock market. Well let’s imagine that trend reversing and a negative wealth effect.

Combine that with inflation and you got nasty stagflation.

So, it will be a desperate return to economic stimulus, forcing rates lower so that the USA gov interest rate expense is lowered.

Money printing… the only answer. Well more inflation.

1970’s all over again… Flight to safety and inflation protection will be to gold and silver.

https://x.com/BambroughKevin/status/1892570027058196873

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I don't think Chinese buying US goods is where Trump is putting his emphasis, rather encouraging buying by US citizens.
However, we know that Chinese are prepared to pay more for foreign products seen as better quality. Our wines for instance.
Anecdotally, Chinese people I've met often have low regard for things like Chinese electronics brands. "I don't want that crap!"

China is not the supercheap manufacturer it once was, as their standard of living has risen.
Their hourly labour costs are now nearly half that of USA, and similar to some Euro countries.
From a US perspective, once you consider all the associated factors of production, sales, and logistics, including QUALITY... manufacturing in the US becomes VERY do-able, competitive even.

Anecdotally again... I have a US made vehicle; I'll go out of my way & pay more to get parts which are both branded AND made in the US.
Because when I fix it, I want it to STAY fixed!

This would be more like Trump's vision.