Hello traders
The allegory of our current global economy and Moby Dick, the rare white whale, hunted by the obsessed Captain Ahab, is not one I am writing about in a light hearted manner.
A refresher: Moby Dick(China) bites off Captain Ahab's(USA) leg and is subsequently relentlessly hunted by the obsessed captain who wants revenge. At the conclusion of the novel, Captain Ahab is oh, so close to killing the elusive whale but gets entangled in the rope of the harpoon and is dragged down to his own watery death by the wounded whale.
Moral of the story? Moby Dick is a classic American novel and China has not eaten the USA's lunch. I do not see any winners in this tariff war but rather the distinct possibility of a global recession and potential melt down like 2008/2009.
At the heart of this conundrum is DJT's obsession with trade balance going back to his first term. The irony being, the 2018 trade imbalance was the biggest ever under his watch.
I love these magnificent United States more than anything but let's get real. DJT won his second term on the persistent high inflation after COVID-19 and immigration not because we, as privileged Americans are suffering as the richest country on the planet(except for Swiss citizens). While I also support regulated immigration, we as Americans, do not want to perform the "menial" jobs that migrants are willing to do. My ancestors survived WW1, WW2, the dust bowl, the Great Depression and every subsequent calamity but never lost track of the integrity in ANY job that feeds a family.
There is a lot of whining about losing manufacturing jobs to China but I dare anyone who feels that they have missed out on a job opportunity to go and pick oranges in the blazing Florida sun with a 50 pound bag on the back or work a low paid job in a sneaker manufacturing facility.
Let's not forget what drives the USA economy: the consumer. We have benefitted from cheap/inexpensive Chinese labor and goods for a long time and will feel the pain if this tariff war is not resolved in a realistic manner. China's currency manipulation has always been geared towards boosting their exports and I do not foresee that policy changing anytime soon.
China is denying that any trade talks are happening and there is increasing day light visible between DJT and his Cabinet members. Bessant won't confirms trade negotiations and Rubio claims not to know what DJT's stance is towards Russia/Ukraine.
It all comes down to DJT's obsession with the white whale, China. Who will blink first? I do not know but this zero sum game is dangerous and could potentially plunge the entire global order into a crisis the likes of which will dwarf WW2 and 2008/2009.
I have initiated a short EUR/USD position at 1.1420 with an eye toward 1.0958 or lower. I am not claiming that the divestment in USA assets has run its course but at this point, I am inclined to reaffirm my belief in American exceptionalism but not in leadership. At this point, the Euro Zone still stands to lose more than the USA, especially in the light of tepid German economic performance and the unresolved Ukraine/Russia war.
There has been a lot of smoke and mirrors during the first 100 days with a flurry of executive orders to fight the woke culture, annex sovereign territories etc. but as human beings, we all have a need and right to shelter, food, clean water and air and the ultimate, the pursuit of happiness. And happiness goes right out the window when the aforementioned rights are not met or satisfied.
So, here lies the Moby Dick moment. Will DJT's obsession with tariffs and power drag us all down? Distinct possibility...
Thank you for listening to my two cents and best of luck with your trades. How you draw the distinction between noise and trading signals, is up to your own analysis. I can only speak for my own bank account and capital but tread lightly through this minefield that should never have happened in the first place.
The allegory of our current global economy and Moby Dick, the rare white whale, hunted by the obsessed Captain Ahab, is not one I am writing about in a light hearted manner.
A refresher: Moby Dick(China) bites off Captain Ahab's(USA) leg and is subsequently relentlessly hunted by the obsessed captain who wants revenge. At the conclusion of the novel, Captain Ahab is oh, so close to killing the elusive whale but gets entangled in the rope of the harpoon and is dragged down to his own watery death by the wounded whale.
Moral of the story? Moby Dick is a classic American novel and China has not eaten the USA's lunch. I do not see any winners in this tariff war but rather the distinct possibility of a global recession and potential melt down like 2008/2009.
At the heart of this conundrum is DJT's obsession with trade balance going back to his first term. The irony being, the 2018 trade imbalance was the biggest ever under his watch.
I love these magnificent United States more than anything but let's get real. DJT won his second term on the persistent high inflation after COVID-19 and immigration not because we, as privileged Americans are suffering as the richest country on the planet(except for Swiss citizens). While I also support regulated immigration, we as Americans, do not want to perform the "menial" jobs that migrants are willing to do. My ancestors survived WW1, WW2, the dust bowl, the Great Depression and every subsequent calamity but never lost track of the integrity in ANY job that feeds a family.
There is a lot of whining about losing manufacturing jobs to China but I dare anyone who feels that they have missed out on a job opportunity to go and pick oranges in the blazing Florida sun with a 50 pound bag on the back or work a low paid job in a sneaker manufacturing facility.
Let's not forget what drives the USA economy: the consumer. We have benefitted from cheap/inexpensive Chinese labor and goods for a long time and will feel the pain if this tariff war is not resolved in a realistic manner. China's currency manipulation has always been geared towards boosting their exports and I do not foresee that policy changing anytime soon.
China is denying that any trade talks are happening and there is increasing day light visible between DJT and his Cabinet members. Bessant won't confirms trade negotiations and Rubio claims not to know what DJT's stance is towards Russia/Ukraine.
It all comes down to DJT's obsession with the white whale, China. Who will blink first? I do not know but this zero sum game is dangerous and could potentially plunge the entire global order into a crisis the likes of which will dwarf WW2 and 2008/2009.
I have initiated a short EUR/USD position at 1.1420 with an eye toward 1.0958 or lower. I am not claiming that the divestment in USA assets has run its course but at this point, I am inclined to reaffirm my belief in American exceptionalism but not in leadership. At this point, the Euro Zone still stands to lose more than the USA, especially in the light of tepid German economic performance and the unresolved Ukraine/Russia war.
There has been a lot of smoke and mirrors during the first 100 days with a flurry of executive orders to fight the woke culture, annex sovereign territories etc. but as human beings, we all have a need and right to shelter, food, clean water and air and the ultimate, the pursuit of happiness. And happiness goes right out the window when the aforementioned rights are not met or satisfied.
So, here lies the Moby Dick moment. Will DJT's obsession with tariffs and power drag us all down? Distinct possibility...
Thank you for listening to my two cents and best of luck with your trades. How you draw the distinction between noise and trading signals, is up to your own analysis. I can only speak for my own bank account and capital but tread lightly through this minefield that should never have happened in the first place.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.