Mercules vs The Bond Vigilantes

[Joe Leote]

I coined the name Mercules (Mercantile Hercules) to capture the drama wherein one strong man attempts to transform the United States back into a powerful mercantilist (export) nation. Yanis Varoufakis explains that bonds are in turmoil in part due to margin calls on leveraged investment strategies and that China and Geman-led Europe have mercantilist policies:

https://youtu.be/0ou67YmnihY

The news stories are telling three narratives to explain the rise in bond yields. First, deleveraging due to margin calls in the leveraged funds. Second, China and/or Japan selling Treasuries perhaps through intermediary holding firms located in offshore jurisdictions. Third, the tariff policy could induce stagflation in the United States.

Michael Pettis is probably the most insightful economist when analyzing international economic patterns:

https://youtu.be/UxvJebX7rJk  

Joe

[William Meyer]

Looks like Mercules is 0 for 12 in his labors by my reckoning. 

He just rescinded the China tariff on certain categories, notably electronics which is the big one.  Any important categories remain tariffed?  Although any remaining ones might be removed as I can already hear the complaints, "you're giving Apple a break but not my small business?"

--
You received this message because you are subscribed to the Google Groups "Understanding Money" group.
To unsubscribe from this group and stop receiving emails from it, send an email to understandingmo...@googlegroups.com.
To view this discussion visit https://groups.google.com/d/msgid/understandingmoney/CAMpwg5359m8pqp134RoRyL94KYo29%2BqxqVgxRpY3uORjeTepjg%40mail.gmail.com.

[Joe Leote]

Even though the US still has the lead in high technology innovation and military superiority the elite leaders in US government and industry failed to defend key production and global distribution industries such as integrated electronics, commercial shipbuilding, and shipping ports:

Make America great again! Invest in US shipping, shipbuilding and steel | AJOT.COM

In military parlance there are discussions of sea powers and land powers. China is becoming the dominant global commercial sea power even though the United States remains the only global military sea power. China depends for its energy and international commerce on the navigation through the so-called island chains surrounding the South China Sea:

https://youtu.be/2Ubv4bAelzE

The Communist Party seems to be using industrial policy, lawfare, and diplomacy as part of the Chinese Total War concept to eventually rival the United States in terms of military capacity. China now exceeds the United States in certain domains of industrial capacity and international commercial strategy. AI and integrated electronics are coveted by both sides to improve missile targeting. Some war game scenarios conclude that the United States would shoot all available smart missiles in less than a month in the event of war with China. If China gains more land based missiles and mobile missiles with smart technology it threatens US commercial and military assets in the region as well as allies in the island chain strategy. I would like to see US authority and international good-will used to rally the allies via a domestic and friend-shoring strategy against China, Russia, Iran, and their proxies. Instead of tariffs I would prefer to see progressive taxes, properly targeted tax shelters, and taxes on foreign investments in the United States to force the investor class to invest in key industries that the United States needs for strategic commercial and military purposes. The main problem in the United States is lack of vision among the elite and weapons of mass distraction causing disruption to domestic politics.

Joe

To view this discussion visit https://groups.google.com/d/msgid/understandingmoney/CABEX-nB1nU_qBg-p6LxfkcH%3DVKmLV8GP6wFgjt04Ji28sd7qbw%40mail.gmail.com.