Deflation and Recession

China has retaliated to Trump's imposition of tariffs on their goods by dramatically reducing the value of their currency.

Interesting times; I just hope Australia is not collateral damage. Our dollar is now down to US67.7c, in fact the only currency it is not devaluing against is the UK pound.

https://www.smh.com.au/business/mark...06-p52e66.html

https://www.abc.net.au/news/2019-08-...lares/11386148

Re: Deflation and Recession

Hi

We have Trump to thank for this mess.

Not what we need at this time.

Re: Deflation and Recession

It had to happen sooner or later. The longer the delay the worse it got.

The root cause isn't this POTUS. It's when the United States government reneged on what they had promised to do at the Breton Woods conference in 1944 at which they had promised to irrevocable link the US dollar to gold at a fixed rate of $35 per oz.

But the US government via the Fed straightway set about "printing" dollars. It's not Trump's fault.

It's that despite being bailed out in the 70's by the Saudis that saw the creation of the Petrodollar when the dollar was on the brink of collapse all it did was to delay the inevitable as a result of creating dollars which now is rapidly becoming near.

Meanwhile the IMF over which the US government has no real control has been setting up it's own virtual hard currency in the form of Special Trading Rights and that, or something very like it will be the lifeboat for world currency trading when, not if but when the US dollar tanks.

There is one hell of a shit storm coming down the pike.

Re: Deflation and Recession

I hope China doesn't blink first. The only way to deal with a narcissistic bully like Trump is to face him down and diminish him. China has the power to do that. Trump might be the useful idiot at the moment but there will come a time when he ceases to be an asset and he will be removed.

Re: Deflation and Recession

It's a matter of opinion. In mine Trump is the best POTUS for decades.

A politician he is not, but a true American he certainly is.

As for "facing down China" - if push comes to shove the USA stands no chance.

Even so there is no need for China to resort to things that go bang, China could destroy the US by undermining the $US on the world's currency markets.

Re: Deflation and Recession

I think your probably right there bTodger, China can undermine
USA on many fronts, the only thing america can compete on
is food, so it is all becoming very interesting, as Robbie
Burns said, THE BEST LAID PLANS OF MICE AND MAN
OFT GANG AWRY!
Regards Donkeyman!

Re: Deflation and Recession

China is now more than self sufficient in food and can and would have no difficulty in importing anything that happened to be in short supply such as soya.

Re: Deflation and Recession

Would you like to live in China?
Ask the people of Hong Kong .
Why would you want the Chinese to 'face down ' Trump ?
The Chinese have flooded the world with cheap crap for decades why should they not pay taxes?

Re: Deflation and Recession

Because they can Muddy, unfortunately the western developed
Nations are unable to compete with them at the moment!
Hence the tariff war we seeing
But as China develops they will become less competetive
Just like Japan and Tiawan not long ago!
Interestingly usa created both those examples in its fear of
communism, just as it did with Germany after WW2, thus
creating the problems it has now!

Regards Donkeyman!

Re: Deflation and Recession

Well, there's a novel variant on Why don't you go and live in Russia if that's, what you think? and about as sensible.