SD Midweek Update: In an escalating Trade War with China, Trump’s appointed Treasurer, Mnuchin, is too scared to fire his weapon. Here’s why it matters…
Everybody is a currency “manipulator”.
Have your ever bought anything on sale?
Have you ever used a credit card, especially to transfer a balance from one card to another?
Have you ever haggled the price for a pair of some crusty shoes at a yard sale?
If you have done any of those things, among other things, then you are in fact a currency “manipulator”.
It’s called “being human”.
We can scale-up the manipulation too.
Every country is a currency “manipulator”.
For example, it’s right there in plain English on the US Treasury Department’s website:
And just like it is in the best interests of any person to use their own currencies in the best ways possible, it is also in the best interests of nations to use their own currencies in the best ways possible.
So wouldn’t it make sense that China attempts it manipulate its currency to its advantage?
Of course it would.
Yet breaking just yesterday was the Treasury Department report on foreign currency policies.
To be more specific, the Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.
In other words, B-grade hollywood movie special-effects flunkie turned Treasurer of the United States Stevie-boy Mnuchin has just released his department’s annual report on who’s doing what with their currency in order to take advantage of the United States.
This is the report in which the Treasury Department labels nations as currency “manipulators”.
Well, not so much, because the Treasury Department, yet again, failed to label China as a “currency manipulator”, as reported by Bloomberg.
Treasury found that nine major trading partners continue to warrant placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices: China, Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, and Vietnam.
“Additionally, Treasury will continue its enhanced bilateral engagement with China regarding exchange rate issues, given that the RMB has fallen against the dollar by eight percent over the last year in the context of an extremely large and widening bilateral trade surplus,” said Mnuchin.
While China does not disclose its foreign exchange intervention, Treasury estimates that direct intervention by the People’s Bank of China in the last year has been limited. Treasury continues to urge China to take the necessary steps to avoid a persistently weak currency. China needs to aggressively address market-distorting forces, including subsidies and state-owned enterprises, enhance social safety nets to support greater household consumption growth, and rebalance the economy away from investment. Improved economic fundamentals and structural policy settings would underpin a stronger RMB over time and help to reduce China’s trade surplus with the United States.
Today’s Report is submitted to Congress pursuant to the Omnibus Trade and Competitiveness Act of 1988, 22 U.S.C. § 5305, and Section 701 of the Trade Facilitation and Trade Enforcement Act of 2015, 19 U.S.C. § 4421. Treasury is working actively to dismantle unfair barriers to trade and achieve freer and more reciprocal trade with major U.S. trading partners. This includes combatting unfair currency practices that facilitate competitive advantage, such as unwarranted intervention in currency markets.
There are so many problems in just four paragraphs that it makes you wonder what planet we are actually living on?
I’m not sure.
But I am sure that there are some inconsistencies here.
In no particular order, and not even all of the inconsistencies by far:
“Treasury has placed China on a “monitoring list”.”
Yeah, way to go Stevie.
That’ll show ’em!
Can’t mess with us!
“the RMB has fallen against the dollar by eight percent over the last year“
In other words, get ready for the US dollar to weaken, the Chinese yuan to strengthen, and for Trump to claim victory in strong-arming the Chinese into strengthening the yuan, which will be ironic in-and-of itself, because by claiming victory for forcing the hand of the Chinese, he is, by extension, claiming victory for a weaker dollar.
Just don’t get to thinkin’ he’ll (or anyone else in the mainstream for that matter) claim victory for that.
But that seed is planted, and the dollar is going down.
“Treasury continues to urge China to take the necessary steps to avoid a persistently weak currency.”
Yeah, because, well, you know China – we want you to manipulate your currency, but only to the way we want you to do it.
Or else China!
You gonna learn!
Messin’ with us?
“Treasury is working actively to dismantle unfair barriers to trade” and “combatting“
That’s what you call it?
If you actually come under fire in a combat zone, and while under fire you lay down, curl up into a ball, suck your thumb and cry like a little girl, well then, you are not really combat effective, are you?
So what are you?
OK, “Hey Half Dollar, you don’t get it man, you’re making this out to be something bigger than it really is!”.
Because that report comes out once a year.
And what has happened in the one year since the last report?
Not only is it currency “manipulation”, it’s “illegal” currency manipulation.
But then again, there is only one person in this entire world who can have his cake and eat it too, and no, it’s not Chuck Norris, but the greatest President in the history of all Presidents everywhere, President Donald J. Trump.
Side note: President Trump talks about market “manipulation” all the time, yet we still have people who deny the manipulation, even Red Hats themselves?
What’s up with that?
This is a big deal because there has been what can only be described as “massive escalations” in the trade war with China over the past couple of weeks, yet we’re not even really fighting, are we?
What is the larger point to why I am bringing all of this up?
When I see open statements and actions like this, well, open “inaction” on the part of the Treasury Department on May 28th, 2019, I think the US dollar is in much more trouble than most people realize, especially considering foreign exchange is only one aspect of the US dollar.
Another thing that is signaling trouble to come to the US dollar are recent developments in the bond market in general, which we should hit on in our live-stream on YouTube today at 12:00 p.m. EST.
We hope you’ll join us for the show.
The gold-to-silver ratio is high-fiving 90 again:
Hopefully the ratio will get even more extreme because of a silver price plunge, because with the miners losing $2 per ounce to mine silver, I’ll take that deal all day long, and if the miners start losing even more per ounce to mine silver, well, I’ll find a way to take even more advantage of that sweet deal.
Death should be clear on silver’s daily chart come Friday:
It’s time to start paying close attention to premiums charged over spot again, because “premium creep” is indeed real and it can mean instead of purchasing silver for $.15 cheaper per ounce, silver in-hand ends up costing $.30 more.
Relatively speaking, gold is holding-up:
With the 200-day on the rise and the 50-day on the decline, however, we are probably going to see a death cross in gold as well.
For all practical purposes, platinum has now quadruple-bottomed:
Still, we have room to run to the downside, and I think we likely will in the short-term.
Palladium is still holding above $1300:
Keep in mind that consolidations can take place not just over price, but also over time, and with palladium in short supply globally, that is likely what we are witnessing.
Crude oil looks like it’s ready for a new leg-down:
In 2014 the price of crude oil fell from basically over $100 to $50 in less than six months, and I do think the speed at which crude oil rises in price will really catch some people off-guard, especially those who don’t remember what paying for $5 per gallon of gas to fill up a large SUV’s tank is like, and if I’m right about the plan being to bring max pain to America, that will happen very soon, regardless of the action painted on the chart.
Copper is nearing its triple-bottom now:
If I was a country and needed to get out of US dollars before the crack-up boom part of the inevitable hyperinflation, which really all countries should be de-dollarizing right now, then I would very heavily be looking at stock-piling some copper at fire-sale prices.
Speaking of the dollar, we’re still range-bound:
I’m expecting the decline to begin very soon, and the Treasury Department took one giant step for Deep State’s kind yesterday which I think will be shown to support my expectation.
Yield on the 10-Year Note is nowhere near done falling:
The Trade War will be taking a back-seat to the US dollar in general, and the US Treasury Market with its yield curve inversion specifically, in the coming days.
All the while, nary an eyebrow raised in these “markets”:
The Fear Gauge is one of the easiest things for the cartel to manipulate because we are talking about an unlimited US dollar printing press and the US “markets”, so I do think the cartel will continue to manipulate the VIX until they can no longer control these markets, but I do think the cartel can control the crashing of the markets, much in the same way they’ve rallied these markets, which means the cartel will be able to control the initial spiking volatility, and to be clear, I am indeed saying the cartel will be the ones doing the VIX spikes, and when I say “they can no longer control these markets”, I’m referring to after the economic collapse.
Since that was all nice and convoluted, let me say it a different way – the only way to protect against what is coming is by buying gold, silver, and real things before everybody else does the same.
It is certain this is coming – for there is not fiat currency ever to which hyperinflation has come.
I referred to the dead cat bounce in the Dow last week:
If the cartel wants the bottom to fall out of these markets right now, the chart is certainly set-up for it.
What’s the bottom line as we find ourselves here on yet another beautiful Wednesday in May?
Oh my, the flash sales on gold and especially silver really are something, aren’t they?
If you are a new stacker, to sit here in mid-2019 and say that silver is a total gift.
Is something that in a weird way we should all really be more thankful for.
Because on the one hand, the cartel is suppressing the silver price.
Yet on the other hand, that means we can buy silver dirt cheap.
Therefore, we can manipulate the currency we each hold.
And turn it in to something more than just currency.
We can turn it into real money, gold & silver.
The dollar is still strong, but not for long.
Most will not listen to the message.
Most are afraid to act or change.
Most will be financially ruined.
Most get economic despair.
Those who have gold?
Or who have silver?
They really are.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.