{"id":26745,"date":"2019-08-28T12:02:07","date_gmt":"2019-08-28T19:02:07","guid":{"rendered":"https:\/\/www.itmtrading.com\/blog\/?p=26745"},"modified":"2021-01-04T10:38:57","modified_gmt":"2021-01-04T17:38:57","slug":"ready-for-the-battle-economic-battle-lines-being-drawn-across-the-globe-by-lynette-zang","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/ready-for-the-battle-economic-battle-lines-being-drawn-across-the-globe-by-lynette-zang\/","title":{"rendered":"READY FOR THE BATTLE? Economic Battle Lines Being Drawn Across the Globe\u00e2\u20ac\u00a6 By Lynette Zang"},"content":{"rendered":"\n

Battle lines crisscross the globe as President Trump declares\nboth internal (Jay Powell, the Federal Reserve Chairman) and external (China)\nenemies. Additionally, he \u00e2\u20ac\u0153clashed with world leaders over the U.S. trade war\nwith China and a host of foreign-policy issues at a Group of Seven summit\u00e2\u20ac\u009d AKA\nthe G-7. The G-7 is made up of US allies that include; Canada, France, Germany,\nItaly, Japan, and the UK, all of whom are battling the global slowdown. What\nhappens when are allies become enemies united against us? The loss of \u00e2\u20ac\u0153World\nReserve Currency\u00e2\u20ac\u009d status. As the battle is waged, black swans fly, hidden for\nnow.<\/p>\n\n\n\n

President Trump escalated the trade wars with new tariffs on\nChina and he seemed surprised by China\u00e2\u20ac\u2122s retaliation with new US import tariffs\nof their own that go into effect the same time as the US tariffs. In addition, turning\ntheir attention to inspiring their new consumer economy to offset their current\nmanufacturing recession. Though as we saw in last weeks video, \u00e2\u20ac\u0153China is Losing\nTheir Footing\u00e2\u20ac\u009d https:\/\/www.youtube.com\/watch?v=-EoMf4D3I2o<\/a>\nit is doubtful the consumer has the inclination to do so.<\/p>\n\n\n\n

The Federal Reserve must rise above the presidential taunts\nthat resulted from the Fed Chairs admission, in a speech he gave, at the recent\ncentral bank conference in Jackson Hole Wyoming, where he admitted that there\nare \u00e2\u20ac\u0153no recent precedents to guide any policy response to the current situation\u00e2\u20ac\u009d,\nmeaning the central banks have no clue and no weapons, to fight the looming\ncrisis as foretold by the bond markets historically negative behavior.<\/p>\n\n\n\n

And while Federal Reserve Board members tell us they \u00e2\u20ac\u0153don\u00e2\u20ac\u2122t\nbelieve we\u00e2\u20ac\u2122re seeing elevated recession risk\u00e2\u20ac\u009d their key warning tool; the US 10\nYR\/3 M inversion, tells us the opposite. That the recession is either eminent or\nhas already begun.<\/p>\n\n\n\n

The 30 year treasury bond yield is at a new all time low, 1.935%\nat this writing. The 10 YR\/2 YR yields have now closed inverted, with the 2\nyear treasury paying more than the 10 year, the worst level since 2007.<\/p>\n\n\n\n

We\u00e2\u20ac\u2122re told that\u00e2\u20ac\u2122s because of a \u00e2\u20ac\u0153flight to safety\u00e2\u20ac\u009d from\nglobal investors, though recent data shows the US retail investor is buying the\nmost thanks to \u00e2\u20ac\u0153institutional investors\u00e2\u20ac\u009d that \u00e2\u20ac\u0153manage\u00e2\u20ac\u009d investment choices for\npensions, 401Ks, MFs, ETFs and other investment products. But why is an\nunpayable debt safe? And where is the logic in being paid more to loan money\nOVER NIGHT than to loan money 30 years? <\/p>\n\n\n\n

Another \u00e2\u20ac\u0153flight to safety asset\u00e2\u20ac\u009d is the Japanese Yen, where we can see the \u00e2\u20ac\u0153strength\u00e2\u20ac\u009d in the Yen vs the USD as \u00e2\u20ac\u0153investors” fly to its safety. Really? Since the early 1990\u00e2\u20ac\u2122s the BOJ has been in an alphabet soup of monetary experimentation that includes YCC (yield curve control). Not only is their economy NOT stimulated, but their yield curve is both negative out to 16 years AND inverted out to 14 years (data as of 8-24-19). Seems like the BOJ has NO CONTROL over their yield curve and their debt to GDP (all the money that flows through their economies) which is the highest in the world. Do you think the Yen looks \u00e2\u20ac\u0153safe\u00e2\u20ac\u009d to you?<\/p>\n\n\n\n

But there is one flight to safety asset that really is safe,\nat least in physical form, commodity money (gold and silver). Central bankers\nand Wall Street have run to their safety. Both spot silver and spot gold\u00e2\u20ac\u2122s\nprice action has smashed through previously established ceilings. Soon, I\nbelieve, you will see new all time highs.<\/p>\n\n\n\n

It is clear to me that the final reset is now, fast approaching. My question to you is, are you ready?<\/p>\n\n\n\n\n

Slides and Links:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
\"\"
https:\/\/www.bbc.com\/news\/business-49452366<\/a>
https:\/\/www.wsj.com\/articles\/china-to-impose-tariffs-on-more-u-s-products-11566562931<\/a>
https:\/\/www.bbc.com\/news\/business-49450245<\/a> <\/figcaption><\/figure>\n\n\n\n
\"\"
https:\/\/www.bloomberg.com\/news\/articles\/2019-08-23\/trump-asks-who-s-bigger-u-s-enemy-fed-s-powell-or-china-s-xi?srnd=fixed-income<\/a>
https:\/\/tradingeconomics.com\/united-states\/<\/a>manufacturing-pmi<\/a>
https:\/\/www.twitter.com\/realDonaldTrump <\/figcaption><\/figure>\n\n\n\n
\"\"
https:\/\/www.wsj.com\/articles\/trump-suggests-second-thoughts-about-trade-war-11566728236<\/a>
https:\/\/stockcharts.com\/h-sc\/ui<\/a> <\/figcaption><\/figure>\n\n\n\n
\"\"
https:\/\/www.wsj.com\/articles\/trump-suggests-second-thoughts-about-trade-war-11566728236?mod=trending_now_4<\/a>
https:\/\/www.cnbc.com\/2019\/08\/27\/us-treasurys-investors-monitor-trade-developments.html<\/a>
https:\/\/stockcharts.com\/h-sc\/ui?s=$JPYUSD<\/a> <\/figcaption><\/figure>\n\n\n\n
\"\"
https:\/\/www.bloomberg.com\/news\/articles\/2019-08-23\/gold-erases-loss-copper-drops-as-china-to-retaliate-on-tariffs-jzo3sigd?srnd=fixed-income<\/a>
https:\/\/stockcharts.com\/h-sc\/<\/a>ui<\/a>
https:\/\/stockcharts.com\/h-sc\/ui?s=$GOLD<\/a> <\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Battle lines crisscross the globe as President Trump declares both internal (Jay Powell, the Federal Reserve Chairman) and external (China) enemies. […]<\/p>\n","protected":false},"author":6,"featured_media":26759,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1713],"tags":[38,53,1282],"class_list":["post-26745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-peek-beneath-the-skin-of-the-markets","tag-china","tag-federal-reserve","tag-central-banks"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/26745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=26745"}],"version-history":[{"count":4,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/26745\/revisions"}],"predecessor-version":[{"id":29476,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/26745\/revisions\/29476"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/26759"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=26745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=26745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=26745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}