China and US Trade Alliance – Powerhouse!

The World Socialists are teetering precariously as their internal bastion of corruption leaks through Holland’s Dyke. 

France’s Macron is being splashed across European headlines as he touts a ‘European Renaissance’ amidst the crumbling infrastructure and political chaos that is devouring his own country.  The Deutsche Welle media outlet is spouting terminology such as ‘revival’ and ‘visionary’ to emphasize the greatness of what is essentially Macron’s EU Nationalism. The dirty word.   The core of Macron’s vision which isapparently ‘on everyone’s lips’ is …. drum roll… ‘Climate Change’.   The initiative?  A Climate investment bank.   Problem? There already is a Climate Investment Bank, it is called The Green Climate Fund which is administered by the UN.

Macron’s speech goes on to demand that the EU protect itself from US and Chinese competition through a Nationalized trade agreement, Aachen, between Germany and France.

Somehow the rest of the EU countries weren’t included in this EU vision.  Odd.

Canada’s Social darling Trudeau is embroiled in his own seascape of flooding waters as implications of bribery and corruption in a case between Trudeau, his government, and a company, SNC-Lavalin, unfolds.  Treasury cabinet Minister, Jane Philpott, has resigned her position stating the ‘current circumstances’ make her ability to defend the Cabinet ‘untenable’.

SNC-Lavalin paid bribes to the Canadian government in the form of illegal contributions in order to assure that the Canadian government wouldn’t prosecute them for paying bribes to obtain contracts in Canada and Libya.

This is how Socialism works in reality.

In the meantime, the US Socialist plant, Ocasio-Cortez, and her campaign manager, Chakrabarti, are being investigated for transferring $885,000 worth of campaign contributions to various self-controlled LLC’s through their PAC Justice Democrats.  Basically, it is a Ponzi scheme of moving money between various companies in order to evade FEC regulations concerning finance reporting requirements.  Oops.

Not only could this ‘arrangement’ result in significant fines, but jail time is also a possibility.

Socialism.  It is an art form.

Amidst the surge of socialist flooding, Trump continues to hold the helm toward Making America Great Again despite the media rhetoric and constant defamation.

Trump is doing what he does best – negotiating.  While the political purities who have no business acumen deride and find fault, they reveal their utter lack of understanding anything outside political bribery.

Trump is negotiating the deal of the century with China’s Xi Jinping.  This deal is revolutionary given China has never entered into a government modeled trade agreement with any nation ever.   It is considered one of the most legally complex negotiations in history and marks a true Champion of an alliance.  Aligning the world’s two largest powerhouses would in effect completely redefine the world.

The naysayers are squeezing through the thumbhole of the Dyke giving all sorts of explanations why the China-US trade deal is no big deal.   Shearing claims such a deal will not ‘jolt the global economy’.  And perhaps the key point is the term ‘global’.  True, it won’t benefit the EU.  It won’t benefit Canada.  But isn’t that the point?  Trump isn’t working to benefit the globalization globe, he’s working to benefit the US.  Period.

In addition, these naysayers are quick to point out that a deal hasn’t actually materialized yet.  Details are scarce.  And North Korea didn’t succumb to Trump’s demands.  Yet.

But if one reads inside the China landscape and the markets that have just now become significantly more positive, the wall would seem to have been razed.  It is a complicated lengthy process, but one that would see both sides working toward a new future.  And unlike the Iran deal, in which Obama gave Iran $150 billion without Congressional approval, China is a cutting edge economy rivaling the US for first place.    The Iran deal was basically a bidding war by European and US businesses to grow their economy while reaping profits.  It had no relative benefit to the US or the US citizens.  I wonder if Obama bought shares in some of those bidding companies?

China’s economy is worth $12,237.7 billion.  Iran’s economy is worth $430.7 billion, or 3.5% of China’s.

Figure it out.

DEBT vs GROWTH – which is better?

While America’s debt now stands at 105% of GDP, Europe is quickly catching up. The UK debt hovers over 96%, France is closing in on 95%, Greece is at 196%, Italy is 140%, and Germany is at 68.7%. But some of the largest and smallest numbers are not always talked about. For example; Japan tops out at 199.4% and Russia lingers at just 11.3%. Part of the problem is in the numbers – as in, who is reporting the numbers? The Japanese government is reporting debt at 199.4%, while Bloomberg and The Economist say it is 240%, but not to worry because public debt is really only 140%. Well that puts them over Italy and no one is saying that Italy has nothing to worry about. But then Italy’s ‘public’ debt is 114%, so while Japan is ‘really only’ – well, Italy is ‘really only’ – less.

The Scandinavian countries routinely come in low, although not the lowest with 20-50% ratios. Even Pakistan and South Africa come in under 40%. Low debt does not equate to a good standard of living, but it does equate to a theory of management. High debt certainly creates the aura of near implosion. So why does the mainstream news keep plugging the failing economy of a country that has the lowest debt to GDP ratio in the world and virtually ignore the country with the highest debt?

Because information molds views and more than anything the view that the media wants to extol is that – Russia is imploding. But it’s not.

Japan has a low inflation rate and low unemployment. But on a comparison basis, consumer prices for food and rent are 25-39% higher in Japan. In 2014, Japans growth rate went into negative territory. While the rate is back in the positive, it is a barely there number at .6%. Italy’s growth rate is currently at .3% whereas the US is lingering at .2%. The countries with the highest growth rates include Senegal at 22% and Kazakhstan at 8%. While the Ukraine’s growth rate had ranked in the positive at 3.3 before the coup, it now lingers in the toilet at -17.6%. In the wisdom of Dr. Phil – ‘How’s that coup workin’ for ya?’

So where do these statistics leave us? Correlations seem to be lacking.

Simply looking at one number obviously fails to tell anything of worth. So what can we learn from Italy and Japan?

While high debt is an indicator, in combination with stagnant to negative growth, a country is doomed. What stimulates growth? What lowers debt?

Growth is stimulated by competitiveness and private sector returns, public sector investments in education, infrastructure and technology are all drivers. So, how do you do that? Well, for one thing taxing out the public and private sectors is an obvious faux pas. What can hamper these natural stimulations? According to a Nobel Laureate Economist, quality government is the key. Governments that abuse their power, make decisions for the elite, and favor the special interest groups, will create the implosion no matter where the debt stands.

Within the government initiative there is the obvious – demand. Demand is high when wages are more indicative of a thriving economy. Low wages = low consumer spending = low consumer confidence = low overall growth rate.

How do we increase wages?

The Obama solution is – redistribution of income through taxation. It’s an economic absurdity to even consider this a solution. Taxing a corporation reduces their bottom line more which will effectively redistribute nothing to anyone but the government. Corporations are motivated by profit. They want a greater return if they are going to pay more wages. They want increased productivity to justify the wage increase. Right or wrong – that’s how their mind works. Resume writers want their clients to show how they created greater wealth for their previous employer because that’s what sells an employee’s worth.

Stagnant wages make for low morale and stagnant growth. Corporations don’t have the American morale any longer, they see cheap India labor as their driver. If the government spent more time and money ‘incentivizing’ corporations to pay better wages and keep them in the US, entitlement programs could begin to fall away thereby redirecting the entitlements to incentives. It might be a breakeven for the government, but that would be their ‘job’, and moral, confidence and earning power would be the end result for the citizens the government represents.