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Questions and thoughts on trade war
23-07-2018, 06:33 PM.
Post: #21
RE: Questions and thoughts on trade war
(23-07-2018, 05:20 PM)specuvestor Wrote: By this logic what about alphabet and geometry and gunpower etc? How far you wanna go on the basics that permits all these to happen. Relatively US is a new kid on the block which I've no doubt done well, but that does not mean it is a guaranteed constant, as history has shown.

I'm not anti-America neither anti-singapore when I say I'm not sure we will still be a financial center 50 years from now. Just what I'm observing geopolitically happening in last 2 decades and seeing a trend... not just what happened last 2 years

I think all the examples he raised, the servers, the phones, the computers, the operating systems, are all US IPs are valid; I would add cloud-based services (ie AWS, Azure, Salesforce, Workday etc.) to that list of examples of continued US importance globally. I don't see any economy standing up to fill that void, at least for now (a notable exception to that rule is Alibaba, and Tencent).
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger

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23-07-2018, 06:46 PM.
Post: #22
RE: Questions and thoughts on trade war
(23-07-2018, 03:17 PM)yeokiwi Wrote: Using US designs and Intellectual properties to write about the decline of US, isn't that ironic?

Starting from->
Qwerty keyboard that you penned the reply was invented by Christopher Latham Sholes, an american.
HDDs, SSDs, Memories and Processors are largely invented by US.
Linux, Windows, Android or IOS to run your web browser are largely US IPs.
Web browsers -> Safari, Chrome, IE, firefox? US too
Internet protocol, the conduit to send out your reply is a US invention.
and, www.valuebuddies.com is hosted by Choopa, LLC which i think is a US based company.

Our high tech life is revolved around US technologies more than ever. I do not need google, facebook, watsapp 20 years ago. But I think I will use them for the next 20 years.
Even china IT infrastructures are run on US technologies which they are unable to duplicate.

Some of these are real inventions. Others more a product or consequence of deep state / oligarchic powers to prevail and set standards. Winners among search engines, browsers, social media platforms, protocols etc. are made by cartels imho, not necessarily the best product.

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23-07-2018, 11:11 PM. (This post was last modified: 23-07-2018, 11:11 PM by corydorus.)
Post: #23
RE: Questions and thoughts on trade war
China emerge as an economic power house due to foreign investment setting up manufacturing plants in China. Created millions of job. The biggest market is to USA.

Secondly, Trump and team are the one who initiate the war. They are always the one who start the salvo. They can be racist, arrogant or a bully. But they are not stupid.

Thirdly, other countries can produce for USA market. But EU and Asia cannot take over excess goods produced by China.

The end result is lesser trades between China and USA. I think is pretty obvious who will lose much more.

The question will be what will be our impact ? Singapore has many investment in China. They will be impacted.
MNCs who has multi production sites will divert their production out to other Asian countries, Mexico or EU. Asean likely benefits.

Just my Diary
corylogics.blogspot.com/



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24-07-2018, 10:22 AM.
Post: #24
RE: Questions and thoughts on trade war
(23-07-2018, 11:11 PM)corydorus Wrote: China emerge as an economic power house due to foreign investment setting up manufacturing plants in China. Created millions of job. The biggest market is to USA.

Secondly, Trump and team are the one who initiate the war. They are always the one who start the salvo. They can be racist, arrogant or a bully. But they are not stupid.

Thirdly, other countries can produce for USA market. But EU and Asia cannot take over excess goods produced by China.

The end result is lesser trades between China and USA. I think is pretty obvious who will lose much more.

The question will be what will be our impact ? Singapore has many investment in China. They will be impacted.
MNCs who has multi production sites will divert their production out to other Asian countries, Mexico or EU. Asean likely benefits.

Kind of interesting you brought out the production sites as i was watching this interview with Steve Bannon.

https://www.youtube.com/watch?v=MU_n_KjarZw

Just sharing to hear more views.

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24-07-2018, 10:40 AM.
Post: #25
RE: Questions and thoughts on trade war
The global system works roughly as below:

US consumers and the Rest exports.
US consumes with wealth effect created by bubbles thru the yrs, fuelled by low rates.
Low rates comes with the Rest willing to lend to US purchasing UST+assets+Fed lowering rates recklessly since USD is seigniorage and so they can always print.
The Rest tolerates this as US bears the "burden of consuming" + military envelope provided. 

So in short the US consumes pretending to be rich, while the Rest lends pretending there's no pblm.

The blackswan is that Trump is attacking all key tenets of the system
Why should US provide military in East Asia+ME+NATO?
Why should US raise rates?
Why should US consume and not export?

It's all well and valid but if the Rest realises that there's no military+no export market and so each nation need to spend on defence+safety net to fuel consumption, then why let USD be senior?
Trump has valid pts in that US should look after itself but he prob doesn't realise that as much as he is a real estate tycoon, his wealth is based largely on the USD strength fuelling bubbles making him rich - and which he is trying to destroy.

Blackswan is that he succeeds esp if all politicians realise swinging to extreme right wins votes and the whole system changes completely aka Bretton woods overnight.

I doubt it happens though - there's plenty of vested financiers in US lobby to prevent this but in the meantime system is already changing with USD as global reserves declining slowly and China moving fast to restructure economy. I think US will still be able to shoulder the burden of consuming for decades more but system is slowly changing after the stark truth revealed thru GFC.

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24-07-2018, 12:14 PM. (This post was last modified: 24-07-2018, 12:18 PM by specuvestor.)
Post: #26
RE: Questions and thoughts on trade war
Sometimes people wonder why Australia can run a persistent current account deficit. Even Malaysia is possible at a certain level. That's because they can net export natural resources that they produces

Similarly US produces USD which is the major reserve currency for which there is a natural demand like iron ore or oil. So they are not pretending to be rich per se

But what if one day people use less oil or less iron ore? That's the key here and AQ I think is correct on: at what point does the G20 starts to think about revisiting the world order post Bretton Woods when US is no longer taking the lead. EUR was supposed to be a competitor to USD but obviously didnt do as well so let's see how CNY will fare if they open up the capital account. But don't expect such shifts to happen overnight or next year but it will be gradual over decade if anything. Invoicing or trading commodities in RMB is the first step.

Our MRT problem also didn't start 2 years ago... it's way back Smile Policy has a long tail.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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13-10-2018, 03:59 PM. (This post was last modified: 13-10-2018, 04:00 PM by weijian.)
Post: #27
RE: Questions and thoughts on trade war
Some secondary effects of trade war happening now..

BMW to buy control of China venture in 'new era' for foreign carmakers

SHENYANG, China (Reuters) - Germany’s BMW (BMWG.DE) will pay 3.6 billion euros ($4.2 billion) to take control of its main joint venture in China, the first such move by a global carmaker as Beijing starts to relax ownership rules for the world’s biggest auto market.

The luxury carmaker said on Thursday it would increase its stake in its venture with Brilliance China Automotive Holdings Ltd (1114.HK) to 75 percent from 50 percent, with the deal closing in 2022 when rules capping foreign ownership for all auto ventures are lifted.

The move will likely spur BMW to shift more production to China, helping to protect profits amid a whipsawing trade war between Washington and Beijing that has raised the cost of BMW importing cars manufactured at its U.S. plant in South Carolina.

https://www.reuters.com/article/us-bmw-j...SKCN1MK2Z9

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14-10-2018, 09:42 PM. (This post was last modified: 14-10-2018, 09:45 PM by BlueKelah.)
Post: #28
RE: Questions and thoughts on trade war
Good to revisit this thread after 3 months. It's been quite a show.

What has happened so far in the trade war? Some significant things have happened that I know of.

1) US has now announced China's been hardware hacking their servers by implanting the tiny spy chip. Not sure how this is going to end, will all gov. IT equipment have to be made in USA now? Note USA been investigating this issue since 2015 even before Trump was elected, is this the motivation behind trade war and wanting to call china currency manipulator? Needless to say , not sure how any negotiation for trade can proceed unless China bows down and says sorry...

2) 200billion worth of goods -> 10% tariff started on 24th september to be raised on 1st Jan 2019 if China dun respond to American requests.

3) China has blinked -> They have removed 8 billion worth of oil tariff which they had threatened to impose and reduced the tariffs on LNG imports

4) China's PMI declining since July and flat for Sept, thats despite a rush of orders in Sept before 200b tariff started. I expect negative PMI next reading in Nov as 200b tariff start to bite and even more negative when the tariffs % are doubled in 2019. EM stocks always correct/crash when China PMI goes negative. Recent sell-off in China stocks and their struggling property sector shows Beijing unable to do much once a panic hits..

5) Meanwhile US jobless rate getting better, GDP growth good and interest rates on track to rise. Funds are starting to move money back to USD, carry trades all over the world unwinding. Money is flowing back to USA. Good for USA, bad for the rest of EM as this causes rate increases and credit tightening.

Let's see what happens in a couple weeks time, I am expecting very weak PMI numbers out of China and funds falling over each other to get out much like what happened earlier this week. Maybe its time to load up on some gold before all the panic starts again :O lets see again in Jan 2019.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com

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11-11-2018, 08:06 AM. (This post was last modified: 11-11-2018, 08:11 AM by bmann025.)
Post: #29
RE: Questions and thoughts on trade war
Marc Faber on trade war:

U.S will be unable to compete with Asia to reverse its trade deficit. Dr. Faber believes that the US cannot be competitive even if there is free trade.

US also would not have a skilled work force to produce.

U.S. motivation not free trade but interventionist.

Reason for imbalance in trade is overconsumption in U.S. created by money printing going on for decades. If they would not trade with China, the U.S. would have the deficit with someone else.

https://www.youtube.com/watch?time_conti...QtV9e0iFXc

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