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Thread: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

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    Default Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    This thread is an attempt to note some of the moves and counter moves in the ongoing trade, currency and economic war as various state and money powers compete.

    ~~~

    I think there is an ongoing but rather hidden economic war between Europe and the US. It includes US fines against German companies VW and Deutsche Bank and legal moves by the EU against large US tech companies such as Facebook and Google in the form of data protection laws and attempts to tax their EU related revenues.

    Here is the latest salvo: US instituting trade tariffs on EU goods via the WTO (world trade organisation) for subsidies to Airbus, first raised with the WTO in 2004. There is a counter from the EU for subsidies given to Boeing.

    This might have some bearing on the current Boeing 737 Max issues and could perhaps be a mechanism for some “clawback”?

    According to the article, these trade tariffs are unrelated to the Trump administration’s tariff war. Perhaps not but the timing is interesting.


    Quote US set to impose tariffs on $7.5bn of EU exports

    Getty Images
    Airbus' A380 was unfairly subsidised, WTO says

    The US has been given the go-ahead to impose tariffs on $7.5bn (£6.1bn) of goods it imports from the EU.

    It is the latest chapter in a 15-year battle between the US and the EU over illegal subsidies for planemakers Airbus and rival Boeing.

    The World Trade Organization (WTO) ruling will mean tariffs on EU goods ranging from aircraft to cheese, olives and jumpers from 18 October.

    Brussels has threatened to retaliate similarly against US goods.

    What happens next?

    US trade officials said the tariffs would be set at a 10% rate on aircraft and 25% on agricultural and other items.

    They have published a list of all the items that will be subject to the additional tariffs, most of which will apply to imports from France, Germany, Spain and the UK.

    The US said it had the authority to increase the tariffs "at any time" or change the products affected.

    Meanwhile, the two sides are waiting for the WTO to decide on what tariffs the EU can impose against the US in retaliation for US state aid given to Boeing. That ruling is expected next year.

    The European Commission, which has proposed tariffs on $20bn (£15bn) of US goods, said it hopes to reach a settlement.

    "But if the US decides to impose WTO authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than do the same," the European Commission said.

    How did this row start?

    The US first filed the case in 2004, arguing that cheap European loans for Airbus amounted to illegal state subsidies.

    The WTO decided in favour of the US, which subsequently complained that the EU and certain member countries were not in compliance with the decision, prompting years of further wrangling.

    The US had sought to impose tariffs on about $11bn in goods. Though the WTO cut that figure to $7.5bn, Wednesday's decision still marks the largest penalty of its kind in the organisation's history.

    The WTO's dispute settlement body must formally adopt the ruling but is not expected to overturn the decision.

    Could there be a settlement?

    US trade officials said the EU's settlement offer came years too late and did not resolve US concerns about ongoing subsidies. Imposing tariffs is intended to produce a better proposal, they added.

    "For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers.

    "Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU's illegal subsidies," said US Trade Representative Robert Lighthizer.

    He said the US expected to "enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers."

    But governments across the EU, including the UK, called for the dispute to be resolved without the new tax.

    "Resorting to tariffs is not in the interests of the UK, EU or US," the UK said. "We are working closely with the US, EU and European partners to support a negotiated settlement to the Airbus and Boeing disputes".

    Bruno Le Maire, France's finance minister, said the country was "ready to respond firmly with our European partners".

    "A friendly resolution to the Boeing/Airbus dispute is the best solution, and all the more so given that Europe could impose sanctions on the US next year," he said.

    Germany's Chancellor Angela Merkel said: "A decision has been made based on international law through which Airbus will be affected unfortunately and we will see how the Americans will react".


    German Chancellor Angela Merkel says the EU will watch to see how the US reacts

    How does this relate to Donald Trump's trade fights?

    These tariffs are separate to US President Donald Trump's ongoing trade disputes with countries around the world.

    Those were sparked in March 2018 when his administration announced tariffs of 25% on steel and 10% on aluminium imported into the US.

    It prompted the EU to impose €2.8bn (£2.4bn) of duties on US goods such as bourbon whiskey, motorcycles and orange juice last June.

    Mr Trump is also considering raising import duties on European cars.


    Is there an economic impact?

    While the Boeing-Airbus fight pre-dates Mr Trump, another wave of tariffs adds to concerns about global trade, which has slowed significantly amid the many disputes.

    On Wednesday, Airbus chief executive Guillaume Faury warned that hitting aircraft with the import duties would disrupt the industry, raise costs and hurt the broader economy - including in the US.


    Airbus chief executive Guillaume Faury warned the tariffs could impact US jobs

    Close to 40% of Airbus's aircraft-related procurement comes from US aerospace suppliers, which it said it supports 275,000 American jobs in 40 states.

    "Airbus is therefore hopeful that the US and the EU will agree to find a negotiated solution before creating serious damage to the aviation industry as well as to trade relations and the global economy," Mr Faury said.

    BBC economics correspondent Andrew Walker said tensions in global trade had already risen since President Trump took office.

    "It's worth remembering that the International Monetary Fund and others see trade conflict as one of the biggest risks to the global economic outlook," he added.
    From: https://www.bbc.com/news/business-49906815
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    Quote Posted by Cara (here)
    I think there is an ongoing but rather hidden economic war between Europe and the US. It includes US fines against German companies VW and Deutsche Bank and legal moves by the EU against large US tech companies such as Facebook and Google in the form of data protection laws and attempts to tax their EU related revenues.
    I would take Rob Kirby's claims with a pinch of salt, especially his predictions. But he made some interesting observations. Emphasis is mine.

    Quote Fed Waterboarding Deutsche Bank – Rob Kirby
    By Greg Hunter On July 1, 2018 In Market Analysis

    Kirby goes on to say, “What we are really seeing here . . . is a trade war that has been going on for quite some time. This is a frictional description I am giving characterizing the regulatory relationship between American regulatory interests and German regulatory interests.”

    Kirby cites the example of Germany building an engine plant in Russia in 2015 against the wishes of the U.S. Kirby says, “The U.S. wanted to put Russia in an economic penalty box. . . . As the date approached for the VW engine plant opening in Russia, so did the rhetoric between the U.S. EPA and VW regarding emissions on their diesel engines. They got a huge fine. . . . You could not have a closer measure of cause and reaction than this engine plant opening in Russia, and days later, this . . . very, very punitive fine on VW.”

    Kirby says what this all boils down to is pro-dollar dollar forces vs. anti-dollar forces. Kirby contends, “Three, four and five years ago, countries taking anti-dollar actions would have included only China, Russia and a few other smaller Asian players. Now, we are starting to see friction that is not just Asian players, now it’s Germany. Who’s next? Is it going to be the whole European Union . . . going to drift into the anti-dollar camp as well? America is becoming isolated.”
    https://usawatchdog.com/fed-waterboa...ank-rob-kirby/

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    De-dollarisation now being discussed in the UK's Financial Times:



    Quote Russia looks at alternatives to dollar for energy transactions
    Settling in roubles or euros would limit exposure to US, says economy minister


    Russia's state-owned oil and gas companies are already exploring alternative currency settlements in the face of geopolitical tensions with the US © Bloomberg

    Max Seddon and Henry Foy in Moscow 3 HOURS AGO

    Russia is exploring currency settlements in euros and roubles for its vast energy exports in an attempt to avoid the dollar and insulate Moscow from the US-led global financial system.

    Maxim Oreshkin, Russia’s economy minister, told the Financial Times that Russia wanted to minimise its exposure to the US by attracting more investors through rouble settlements.

    “We have a very good currency, it's stable. Why not use it for global transactions?” Mr Oreshkin said in an interview.

    “We want [oil and gas sales] in roubles at some point,” he said. “The question here is not to have any excessive costs from doing it that way, but if the broad . . . financial infrastructure, is created, if the initial costs are very low, then why not?”

    Kremlin-controlled Gazprom exported $51bn worth of natural gas to Europe last year, while state-owned Rosneft exported 123.7m tonnes of oil.

    Moscow has looked to offset its exposure to US economic sanctions through a “de-dollarisation” scheme that has seen the finance ministry’s bond programme issue all new debtin euros and roubles. The central bank has reduced its holdings of US treasury debt from $96bn to just $8bn in the past 18 months.

    Quote You have positive rates in roubles with stable and predictable inflation. There’s no capital controls, it’s fully flexible, you can get in or get out at any time
    Maxim Oreshkin, Russia’s economy minister

    Mr Oreshkin said the popularity of Russia’s domestic bonds among foreign investors — who own 29 per cent of its rouble debt — suggested that Moscow would be able to sell its energy exports in local currency.

    “EU companies, investors are buying rouble assets. If you look at the popularity of the domestic bond market, it’s pretty huge. It means that rouble assets are already on the balance sheet of European investors,” Mr Oreshkin said. “So at one point in the future energy companies also could use rouble assets.

    “You have negative rates in euros and you have positive rates in roubles with stable and predictable inflation,” he added. “There’s no capital controls, it’s fully flexible, you can get in or get out at any time.”

    The state-owned oil and gas companies that dominate Russia’s economy are already exploring alternative currency settlements in the face of continued geopolitical tensions with the US.

    Rosneft has priced its September and October spot tenders in euros, while Gazprom in March sold its first ever cargo of natural gas priced in roubles to a western European company.

    Switching oil and gas revenues, which account for around half of Russia’s budget, away from the dollar would mark a sea change for the country, which is expected to record a 2019 budget surplus worth 1.5 per cent of gross domestic product, thanks partly to a favourable rouble exchange rate.

    Mr Oreshkin also said the government was prepared to spend a “limited amount” of the Rbs8.2tn National Wealth Fund, saved since 2017 by banking extra revenue on all oil sold at more than $40 per barrel, domestically.


    Maxim Oreshkin, economy minister, says the popularity of Russia’s domestic bonds among foreign investors suggests Moscow will be able to sell its energy exports in local currency © Bloomberg

    The Kremlin hopes the extra spending will kick-start Russia’s moribund growth, which is projected to fall below 1 per cent of GDP this year and has been propped up by an unsustainable consumer lending boom.

    “When oil prices come down, this means that there is insufficient foreign currency supply for the economy. You need to cover it with the foreign currency assets you have,” Mr Oreshkin said of the wealth fund, adding that any excess above a level sufficient to cover a fall in oil prices could be spent.

    Mr Oreshkin had originally called for the money to be invested overseas in a Norway-style sovereign wealth fund. The recent shift in policy towards domestic spending, he said, would be done in line with additional private investments and seek to mitigate the central bank’s concerns over a possible spike in inflation.

    Mr Oreshkin also said Russia intended to ramp up bilateral trade with the EU. In recent months, leaders such as Emmanuel Macron, the French president, have called for political rapprochement and the restoration of business ties with Moscow after five years of sanctions imposed over its 2014 annexation of Crimea.

    “When Mr Macron was [French] economy minister, he was heading the developmental commission between Russia and France. He knows now how to reach out and have joint projects,” Mr Oreshkin said.

    The EU wants to ensure companies such as Nokia and Ericsson can compete with China’s Huawei in Russia’s burgeoning market for 5G mobile communications, and food producers hope to return to Russian markets fenced off by protectionist measures in response to the European sanctions.

    But Russia is unlikely to readmit EU food exports unless Brussels eases Moscow’s access to the European market in return, Mr Oreshkin said.

    “There are also a lot of barriers on the European side with agricultural subsidies, technical regulation, which limits the access of Russian produce on the European market and so on,” he said. “If you are talking about free trade, it should be real free trade and not partly free trade.”
    From: https://www.ft.com/content/704cde6c-...0-3b065ef5fc55
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    From the Wall Street Journal:

    Quote Germany’s Central-Bank Chief Warns of U.S.-Europe Trade-War Dangers
    Jens Weidmann fears larger adverse effects than those from the current U.S.-China dispute

    Michael S. Derby, Updated Oct. 16, 2019 5:56 pm ET


    Jens Weidmann at the G-20 meeting in Japan earlier this year. Photo: Kim Kyung-Hoon/Associated Press

    Deutsche Bundesbank leader Jens Weidmann said Wednesday that rising trade tensions around the world have the potential to slow growth markedly, in comments that also expressed continuing concern with the European Central Bank’s stimulus efforts.

    “The potential adverse effects might be considerably larger than in the case of the current trade spat with China,” and even there, things are looking worrisome. Mr. Weidmann said in the current China-U.S. squabble, “the measures that have been adopted or brought up could cut the output of both countries by more than a half percent over the medium term. World trade would be reduced by 1.5%.”

    Mr. Weidmann said those who think tariffs can bring something positive, as the Trump Administration does, are wrong.

    “Proponents believe that higher tariffs can solve several problems at once: They claim that raising tariffs can reduce current-account deficits, protect jobs and even make people better off,” he said. This belief is mistaken, he added, because “tariffs increase the prices of imported goods, and this weakens the purchasing power of consumers.”

    Mr. Weidmann also expressed concern about the European Central Bank’s push to stimulate its economy, most notably via purchases of bonds. He said that in contrast with the U.S. Federal Reserve, the ECB must buy sovereign debt from nations with disparate local economies, fiscal policies and credit risk levels. He worries that the purchases suppress market signals about the health of an individual nation’s bond markets.

    The official said the ECB wasn’t out of additional stimulus efforts if it deemed them necessary. But he said traveling this road would raise complicated cost-and-benefit questions.

    Mr. Weidmann also commented on the negative yields seen in German government debt and attributed to a mix of factors, including structural changes in the economy that have led to a lower overall level of interest rates, as well as the influence of central-bank purchases on long-term government debt.

    The German central banker also said it isn’t time to surrender the idea that low unemployment can drive up inflation over time. “While the pass-through of wage changes has diminished since the 1970s, it has been broadly stable lately,” he said.

    “Indeed, a 1% rise in wage costs would ultimately push up consumer prices by around 0.3%,” he said. It is a slow process, Mr. Weidmann said, but he added that “a slow firming of inflation shouldn’t really be a surprise.”

    Write to Michael S. Derby at michael.derby@wsj.com
    From: https://www.wsj.com/articles/germany....co/CqncSCSpmR
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    India’s Finance Minister says the world economy is “slowing like in 2008, but without the collective response”.

    Quote The world is slowing like in 2008, but without the collective response: Indian Finance Minister

    India’s Finance Minister warned about a repeat of the 2008 financial crisis in the face of a global economic slowdown, saying that governments had yet to find a coordinated “planned” response.

    Speaking to Yahoo Finance in New York, Minister Nirmala Sitharaman called for a broader understanding of “the intensity of the problem,” adding that “everything, every way” would be at risk if world leaders failed to respond.

    “I think the intensity is being felt across the board now, a lot more than how it was felt in 2008,” said Sitharaman, referring to the pace of the slowdown. “What probably is not available now is that in 2008, there was a greater sense of collectively everyone wanting to respond to it from their respective quarters.”

    Sitharaman’s comments come as Finance Ministers and Central Bankers gather in Washington D.C. for the World Bank-IMF meetings.

    Back in 2008, world leaders at the G20 Summit pledged rapid action to address a weakening global economy amid the financial crisis, committing to reform the financial system. “We must lay the foundation for reform to help ensure that a global crisis such as this one does not happen again,” they stated. But the scenario looks a lot different today.

    On Tuesday, the International Monetary Fund downgraded its global economic outlook to 3% growth, the slowest pace since the global financial crisis, attributing the drag to “rising trade barriers and increasing geopolitical tensions.”

    The fund specifically noted the impact of the US-China trade tensions and the resulting tariffs, saying they would reduce the level of global GDP by 0.8% by 2020.

    Once the world’s fastest growing economy, India’s growth plunged to a six-year low of 5% in the April-June quarter, pushing it behind China, the Philippines and Indonesia. The pain has been felt across the board. Indian car sales plunged 22.4% last month, prompting auto parts makers to warn of one million layoffs. A recent spike in crude prices, have only weighed on the outlook for a country that imports 80% of its oil supply.


    Finance Minister Nirmala Sitharaman. (Raj K Raj/Hindustan Times via Getty Images)

    While domestic factors including supply disruptions prompted by significant monsoon rains have exacerbated the pullback in sectors like mining and transports, Sitharaman said much of the slowdown had been caused by external uncertainties.

    “Sectors which breached uncertainties [in the past] and still performed have now really started bearing the brunt,” Sitharaman said, singling out textiles and automobiles as examples. “All sectors that would show the competitiveness to export today are affected because of the developments”

    New Delhi has taken aggressive measures to boost spending and shore up investment. Last month, Sitharaman introduced a corporate tax cut, slashing the base rate from 30% to 22%. The Reserve Bank of India has already slashed its benchmark repurchase rate by five times this year, with an additional cut expected by the end of the year. But with inflation running near the central bank’s 4% medium term target, there are increasing worries it is running out of levers.

    Still, the Minister refused to criticize the Trump administration’s trade stance, and protectionist measures taken by other governments around the world.

    “A national priority, guiding a trade talk is not a bad thing at all. Talks are happening,” she said. “It's too difficult for me to pass [judgement] sitting as I do in India, but it has caused certain levels of uncertainties.”
    From: https://finance.yahoo.com/news/no-gl...142620342.html
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    From Tom Luongo on strategic-culture.org:

    “Did you ever wonder why the Fed had to switch on the lights at its overnight Repo window? Now it’s open permanently. And that’s most likely about troubles coming from Europe. Add Hong Kong and Saudi Arabia into that mix and we have a hot time in the old house.”

    Quote A Peg for a Peg: That’s the West’s Offer for China

    Tom Luongo

    October 14, 2019
    © Photo: Flickr / 97403714@N02

    While President Trump keeps trying to support a stock market via noises about negotiations with China progressing well, things are spiraling out of control in Hong Kong.

    The protests continue to escalate and show no signs of slowing down. The goal has explicitly become attacking the legitimacy of the Hong Kong government and bringing down an economy vulnerable to a falling property market.

    The attack vector here is not directly political, Hong Kong is being attacked by the West via student proxies through its currency peg.

    The Hong Kong dollar is tightly pegged to the US dollar and defending that peg by the Hong Kong Monetary Authority has left the city-state vulnerable to a massive property collapse if commerce continues to plummet as protestors keep targeting vital centers like the airport and hotel districts.

    A collapse of the Hong Kong dollar peg, like all price floors/ceilings, is inevitable. Pegging one currency to another will always create an unsustainable imbalance of payments that the central bank can only cover for so long.

    In Hong Kong’s case the peg has fueled, alongside China’s spectacular growth, a property market that is insanely over-valued. So, attacking the value of said property is how you attack the peg. The longer these protests go on, fueled and organized by outside elements (read US and British intelligence actors), the higher the probability that capital will flee Hong Kong and undermine the peg, creating a massive market dislocation overnight.

    Think back to 2015 when the Swiss National Bank finally broke its peg to the euro after having turned itself into a hedge fund trying to stop the appreciation of the franc versus the euro. The bottom fell out of the euro/franc pair overnight, adjusting 30% in a matter of minutes.

    When a major peg like that breaks, systems break. Societies break as well. Part of the pressure the West is applying to China is for open its capital account and submit to western control via hot money inflows. The Hong Kong dollar peg is the key weakness to the current arrangement.

    It goes hand in hand with Trump’s moronic tariffs and the Treasury Department’s sanctions on Chinese firms doing business with Iran. It’s a multi-layered strategy.

    Speaking of Iran…

    Now that you have some idea of the stakes in Hong Kong, let’s talk about what’s happening in Saudi Arabia.

    While Trump tries to pull his Middle East policy decisions from the brink of war, making deals with Turkey’s Erdogan and Russia’s Putin (through Erdogan) to unlock the stalemate in Syria, his allies in Riyadh and Tel Aviv are fuming and finally rightfully scared for their futures.

    Iran and its proxies have gained the upper hand not only in Syria but in Yemen and the Persian Gulf. China is no longer playing games with Trump over buying Iranian oil, announcing that they are ready to invest up to $280 billion in Iran’s oil and gas industry.

    The attacks on Saudi Armaco assets by the Houthis in Yemen have put Crown Prince Mohammed bin Salman behind the eight ball and his only options are to sue for peace. The same can be said for Trump now that he’s been revealed for having half a brain and not willing to risk World War III over a drone and some oil tankers.

    Speaking of oil tankers, the Saudis and/or the Israelis, who have the most to lose by Trump paying peacenik, are likely the ones responsible for the attack on the Iranian oil tanker in the Red Sea. If they can’t get the US to start the war, maybe they can goad the Iranians.

    Not likely.

    Trump and the embattled and likely out-of-power Benjamin Netanyahu tried vainly to frame the conflict with Iran solely about nuclear weapons. But it’s never been about that. It’s been about continuing the policy of chaos to blunt the rise of China and Russia as the new lords of Eurasia.

    Nothing more, nothing less.

    And destabilizing the region to split off Iran from Russia and China has failed completely. Iran was never going to back down. Putin told the world that North Korea would rather eat dirt than give up its nuclear weapons. Iran is in the same frame of mind. They would rather be annihilated than give the US an inch after seventy years of egregious intervention and starvation.

    So, here we are. The Saudis are the weak link in the US’s Mideast Alliance. Hong Kong is China’s soft financial underbelly. It comes as no surprise to me to see classic color revolution behavior in Hong Kong spring up within weeks of a failed attempt to get Trump to start a war with Iran – when they shot down the US drone over its airspace.

    Because once Trump refused to jump off the edge of the Abyss, everything that has happened since then has been predictable. Increased threats to Saudi assets, further instability of the world’s oil infrastructure against the backdrop of political paralysis in Israel.

    Netanyahu went off the reservation making attacks on Iraqi Shi’ite militias and likely ginning up protests against an Iraqi government no longer a satrap of D.C. and Tel Aviv.

    The end result is now the Saudi government is in very serious trouble. Oil prices cannot rally and will likely crash in the coming weeks as the global slowdown grips traders by the hind brain. At that point I will be shocked if the Houthis do not attack the Saudis again, this time more boldly.

    What’s at stake in that attack is no different than that in Hong Kong, the peg of the Saudi Riyal to the US dollar. MbS cannot finance his country’s future without the Aramco IPO, which is now off the table until 2020 at the earliest. And he can’t fund his current spending at $55 oil.

    Something has to give.

    And that’s why the reporting on the Hong Kong protests have focused on the economic damage the city is experiencing.

    It’s a simple bit of blackmail. A peg for a peg.

    The Hong Kong dollar for the Saudi Riyal. China needs Hong Kong to return to normalcy. British banks do not want Hong Kong under Chinese control. So many of their traders are targets for extradition for questioning.

    This was never about twenty-somethings twerking in a public park. This was about wresting control of the offshore yuan market from the British banks laundering money through Hong Kong to fund intelligence and military operations across Asia.

    Saudi Arabia needs to survive to keep the petrodollar somewhat intact and the outflow of dollars continuing while Trump runs the biggest deficits the world has ever seen.

    If the Saudis give up the peg, the dollar transmission system begins to collapse. Global trade is the base money of global economy. It is the source of the direction of the flow of capital, from there it is levered up in the shadow banking markets.

    Did you ever wonder why the Fed had to switch on the lights at its overnight Repo window? Now it’s open permanently. And that’s most likely about troubles coming from Europe. Add Hong Kong and Saudi Arabia into that mix and we have a hot time in the old house.

    Trump is okay with ending some parts of the US empire while maintaining other parts of it. But he’s been fighting for it to happen on his schedule, not Iran’s, not Russia’s and not China’s.

    Time’s run out. And now the world is beginning to burn.
    From: https://www.strategic-culture.org/ne...s-offer-china/
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    Finance channel Real Vision has just published a discussion between Kyle Bass and retired Brigadier General Robert Spalding.


    Quote Published on Oct 15, 2019
    Is globalization breaking down before our eyes? Kyle Bass sits down with retired Brigadier General Robert Spalding to discuss what’s really happening inside China. Spalding spent years living in China as Defense Attache in Bejing and served as the chief China strategist for the chairman of the Joint Chiefs. Spalding brings his deep knowledge of the people, culture, economy, and military posture of China to the table in discussing the multifaceted threat to the US posed by the rising Asian superpower in the US China trade war. Filmed on September 27, 2019 in Washington D.C.
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    This is perhaps not directly related but it’s important.... Denmark (which has been delaying its agreement) has finally approved the passage of the Nordstream 2 gas pipeline through its territory.

    Quote Full stream ahead! Denmark removes final hurdle for Russian gas pipeline to Europe
    30 Oct, 2019 13:46 / Updated 15 hours ago


    Full stream ahead! Denmark removes final hurdle for Russian gas pipeline to Europe

    Denmark has given the green light for the Russia-led Nord Stream 2 gas pipeline to pass through its waters. Copenhagen’s delay in granting permission has been the main hurdle to completing the project on time.

    “The Danish Energy Agency has granted a permit to Nord Stream 2 AG to construct a section of the Nord Stream 2 natural gas pipelines on the Danish continental shelf southeast of Bornholm in the Baltic Sea,” the agency said in a press release.

    It explained that the permit was granted in accordance with Denmark’s obligations under the UN Convention on the Law of the Sea.

    “Denmark is obliged to allow the construction of transit pipelines with respect to resources and the environment and if necessary to assign the route where such pipelines should be laid,” it said.

    The agency said it concluded that “the southeastern route on the continental shelf is preferable to the northwestern route” as it is the shortest one. It provides the “least risk and impact from an environmental and safety perspective and therefore is the preferable choice.”

    The undersea pipeline, designed to deliver Russian natural gas to Germany and other European customers, is set to be finished by the end of the year. The offshore and land sections of the pipeline were connected on the German side last year and a receiving terminal is currently under construction there. Russia has finished laying nearly two thirds of the Nord Stream 2 natural gas pipeline along the bottom of the Baltic Sea.

    The project has only needed approval from Danish authorities; other countries on the route of the pipeline – Russia, Finland, Sweden and Germany – have long-since approved it.

    The pipeline’s construction has been criticized by the US administration which attempted to derail the project in order to boost sales of American liquefied natural gas (LNG) to Europe.
    From: https://www.rt.com/business/472206-d...am-2-approval/

    Map of the Nordstream 2 route and other gas pipelines:
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    Some analysis from former ambassador M. K. Bhadrakumar on Nordstream 2.

    Quote Europe’s gas alliance with Russia is a match made in heaven
    November 3, 2019 by M. K. BHADRAKUMAR


    The vessel “Audacia” laying pipes for the Nord Stream 2 gas pipeline in the Baltic Sea off the island of Rügen. File photo

    Amidst the excitement over the killing of the ISIS chief Abu Bakr Al-Baghdadi, a development of much impact on international security passed by when Denmark made the innocuous announcement on October 30 that it would permit the proposed Nord Stream 2 gas pipeline to pass through its exclusive economic zone.

    Copenhagen modestly explained that it was “obliged to allow the construction of transit pipelines” under the UN Convention on the Law of the Sea.

    The Nord Stream 2, which will connect Russia’s Leningrad Region to Germany’s Baltic coast, bypassing the traditional route via Ukraine, aims to double the capacity of the already-built Nord Stream 1 to 110 billion cubic meters (bcm) per year that is more than a quarter of the European Union’s gas consumption.

    On October 31, Gazprom, Russia’s energy Leviathan, had said 83 percent of the pipeline construction — more than 2100 km of the pipeline — was complete. The permit to construct in the Danish Exclusive Economic Zone south-east of Bornholm covers a 147-km-long route section.

    Pipelay has been completed in Russian, Finnish and Swedish waters, and for the most part in German waters. The construction of both landfall facilities in Russia and Germany is nearing completion. Thus, the development last week signifies that Russia is certain to finish the project by the end of this year.

    Despite the rising tensions in Russia’s relations with the United States, a massive energy project is all set to slither along the seabed between Russia and the European Union. The US wants to stifle the serpent in its infancy but Germany and Russia navigated it to the home stretch.



    The project is expected to ensure safe and stable supplies of gas to Europe. The competitive Russian gas supplies will enable European customers to save anywhere around 8 billion euros on their gas bill in 2020.

    More importantly, according to a study conducted by the University of Cologne EWI, “When Nord Stream 2 is available, Russia can supply more gas to the EU decreasing the need to import more expensive LNG. Hence, the import price for the remaining LNG volumes decreases, thereby reducing the overall EU-28 price level.”

    Herein lies the rub. Europe has become a natural gas battleground for the US and Russia. Of course, apart from being a prized market, Europe is also a political battleground between the US and Russia.

    Russia traditionally dominated the European market while European Union appears to be keen to wean itself off Russian gas, given the geopolitical implications of over-reliance on Moscow for its energy security. On the other hand, the US is looking to step up its exports liquefied natural gas (LNG) to Europe and faces a big resourceful competitor who cannot be dislodged from the market — Russia.

    Russia loomed large as the largest supplier of natural gas to the EU in 2018. According to the European Commission’s latest data on EU imports of energy products in October, eleven member states imported in 2018 more than 75 percent of their total national imports of natural gas from Russia.

    Russia has multiple pipelines in operation, which gives it a big advantage in cutting down transportation costs for the European consumers, as compared to more expensive LNG imports from the US. Clearly, both geoeconomics and geopolitics are at play here.

    The US’ transatlantic leadership is largely conditional on the climate of relations between Europe and Russia in general and between Germany and Russia in particular. Washington is acutely conscious that Nord Stream 2 can provide the underpinning for a stable, predictable relationship between Europe and Russia, which would go against the grain of the Trump administration’s projection of Russia as a revisionist power that the US is determined to counter.

    In sum, Washington apprehends that if Nord Stream 2 is completed, it will come as a severe blow to transatlantic relations, although on the face of it, the US has been arguing that the project runs counter to the Western sanctions imposed on Russia following its annexation of Crimea.

    Actually, this argument is sheer sophistry, since Europe’s dependence on Russian energy supplies is a legacy inherited from the days of the Soviet Union. Moscow is a stakeholder in preserving its reputation as a stable, reliable supplier of energy to Europe at competitive prices. The crux of the matter is that the European consumer prefers the cheaper Russian gas to the expensive LNG exports from the US.

    Meanwhile, the Ukraine crisis alerted Russia to the geopolitical reality that it could be vulnerable to US pressure politically, which in turn prompted its energy pivot to China. Gazprom aims to become China’s top gas exporter by 2035. When the Power of Siberia pipeline (under construction in Eastern Siberia to transport gas to Far East countries) becomes active later this year, it will deliver 38 billion cubic metres of natural gas annually to China, which will make China Russia’s second-largest gas customer after Germany.

    However, paradoxically, Russia’s gas exports to Europe are only increasing in recent years. In 2018, Gazprom’s gas sales to Europe and its share of Europe’s gas market reached record highs. This trend can only continue as the Nord Stream 2 and Turk Stream pipelines, which will become active shortly this year, will deliver an additional 86.5 billion cubic meters annually to Europe.

    Simply put, Europe’s addiction to Russian gas remains a fact of life and with the continent’s own gas production on the decline, Europe needs to import much bigger volumes of gas and lots of it is going to come from Russia.

    The amazing part has been the dogged resistance by Germany to the US pressure tactic to abandon Nord Stream 2. The US even threatened to sanction German companies; US Congress passed resolutions calling for an end to construction of the pipeline. Germany’s manufacturing economy is dependent on imports for 98% of its oil and 92% of its gas supply, and cheap gas is the lifeblood of its export-based economy.

    But then, there could be more to it politically than meets the eye. Can it be a coincidence that Germany is also resisting US pressure to shut out Chinese tech giant Huawei from its 5G networks? Like with Nord Stream 2, Washington advanced the same argument apropos Huawei — national security concerns. But Germany snubbed the calls from the US.

    The Economist magazine wrote some months ago that the “The Atlantic Ocean is starting to look awfully wide. To Europeans the United States appears ever more remote.” To be sure, the coming into fruition of Nord Stream 2 is yet another sign that the transatlantic relationship currently faces significant challenges.

    The US-European policy divisions have emerged on a wide range of regional and global issues. Although US and European policies toward Russia remain broadly aligned, Nord Stream 2 turned out to be a key US-European friction point.
    From: https://indianpunchline.com/europes-...ade-in-heaven/
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    More developments on Nordstream 2:

    Quote Germany makes legal changes to ease completion of Nord Stream 2

    Germany’s parliament on Wednesday (13 November) approved changes to the law governing the Nord Stream 2 gas pipeline to make it compliant with European Union regulations, removing a hurdle to completion of the Russia-led project.

    The legal tweaks approved by the Bundestag lower house relate to EU rules signed off in February that stipulate import pipelines should not be owned by gas suppliers and that third parties should also be able to use them.

    The 1,225-km pipeline under the Baltic Sea is fully owned by Russia’s state-owned Gazprom.

    The European Commission amended its Gas Directive in April, and the amended document entered into force on 23 May. It stipulates that a third-party nation cannot own both the pipeline and gas imported into the EU market unless the conduit was built before May 23, 2019.

    However, member states have yet to transpose the amendments in their respective legislation. While the amended Directive is unable to halt the construction of Nord Stream 2, it is capable of delaying or suspending its operation.

    Germany sees it as a primarily commercial project that is essential to energy security. But Eastern European, Nordic and Baltic Sea countries and the United States see the pipeline as increasing EU reliance on Russia.

    Denmark last month removed the last major hurdle to completion of the pipeline by giving the go-head to construction of sections under its jurisdiction.

    According to its initial schedule, Nord Stream 2 should have been operational by the end of this year when an agreement on the transit of Russian gas via Ukraine, the main route for exports to Europe, expires.

    The EU has urged Russia and Ukraine to reach a new agreement before 31 December, but there are a number of obstacles, including a pro-Russian insurgency in eastern Ukraine, and litigation between Gazprom and Ukraine energy company Naftogaz.

    Germany has said Nord Stream 2 would only be launched if Gazprom also continued to transit gas through Ukraine.
    From: https://www.euractiv.com/section/ene...nord-stream-2/

    I wonder if they will stick to this?
    “Germany has said Nord Stream 2 would only be launched if Gazprom also continued to transit gas through Ukraine.”
    *I have loved the stars too dearly to be fearful of the night*

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    A possible driver for the US China Trade War:

    Quote Posted by Cara (here)
    A neat summary of China’s export footprint which has unseated the US dominance in less than a decade:



    Quote Zeeshan Mhaskar
    @MhaskarChief
    2000 vs 2019

    US and China sphere of influence. This is what the trade war is all about

    *I have loved the stars too dearly to be fearful of the night*

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    This move of the US is consistent with other efforts to erode international law in general. As a consequence of a paralysed WTO, the dangers of trade conflicts will increase.

    Quote Donald Trump’s block on WTO judges creates ‘doomsday scenario’ for world trade disputes
    • The World Trade Organisation’s appeals body will be paralysed in December with US President Donald Trump blocking crucial reappointments of judges
    • Analysts say this may mean international trade disputes may never see resolution, leading to ‘chaos’ and damage to global trade

    The world will not end on December 10, yet for many who have spent their careers within the global trading oversight system, the date has apocalyptic consequences.

    That is when the World Trade Organisation’s (WTO) highest dispute-resolution body will cease to function after the administration of US President Donald Trump blocked reappointments to its panel. Without a working appeals system, international trade disputes may never see resolution and could quickly evolve into tit-for-tat tariff wars that spiral out of control.

    --- snip ---
    https://www.scmp.com/economy/china-e...msday-scenario

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    This is from Radio Free Europe (which has its particular bias and narrative). Six additional nations have joined Instex, the financial system set up to conduct financial transactions with Iran outside of the view of the USA. There have been no actual transactions yet, so this is still “for show”. But perhaps these nations now see enough “safety in numbers” to do some trades?

    Quote Six New European Nations Join Iran Barter System Opposed By U.S.
    RFE/RLDecember 01, 2019 04:07 GMT


    France, Germany, and Britain say six new European nations have joined the INSTEX system.

    France, Britain, and Germany say that six new European nations have joined INSTEX, the bartering system they developed to allow firms to conduct business with Iran without violating U.S. sanctions.

    In a joint statement on November 30, the three said they “warmly welcome the decision taken by the governments of Belgium, Denmark, Finland, the Netherlands, Norway, and Sweden to join INSTEX as shareholders.”

    The United States has vehemently opposed the plan, with Vice President Mike Pence saying earlier this year that "the time has come for our European partners to stop undermining U.S. sanctions against this murderous revolutionary regime."

    The Paris-based INSTEX -- or Instrument in Support of Trade Exchanges -- is a special-purpose financial vehicle that allows Iran to continue to sell oil and in return import other products and services, using a barter system rather than the U.S. dollar.

    The joint statement said the inclusion of the new members "further strengthens INSTEX and demonstrates European efforts to facilitate legitimate trade between Europe and Iran."

    The plan focuses on areas not targeted by U.S. sanctions and will initially deal with “the sectors most essential to the Iranian population -- such as pharmaceutical, medical devices, and agrifood goods,” foreign ministers from the three countries said in January when announcing the plan.

    As of yet, no transactions have been enabled through the system.

    The statement said the plan represents "a clear expression of our continuing commitment to the Joint Comprehensive Plan of Action" (JCPOA) -- the formal name of the 2015 nuclear deal Iran signed with six world powers.

    The three European allies -- who signed the nuclear deal along with the United States, Russia, and China -- have been working hard to keep the accord alive after U.S. President Donald Trump announced in May 2018 that he would withdraw from the deal and reimpose sanctions on Tehran.

    After the U.S. pullout, Tehran demanded that the European signees mitigate the damages inflicted on Iran’s economy by the renewed U.S. sanctions and it began exceeding some uranium-enrichment limits set out under the accord.

    In their statement, the European allies said Iran must return to full compliance with its commitments under the deal "without delay.”

    "We remain fully committed to pursuing our efforts towards a diplomatic resolution within the framework of the JCPOA," the European allies said.

    Speaking on December 1, Iran's parliament speaker Ali Larijani expressed skepticism about the effectiveness of the bartering system, telling reporters that it was "unclear whether INSTEX will have concrete results."
    From: https://www.rferl.org/amp/european-a...mpression=true

    And these are the six to join:


    Quote BullionStar
    @BullionStar
    Belgium, Denmark, Finland, Netherlands, Norway & Sweden 🇧🇪 🇩🇰 🇫🇮 🇳🇱 🇳🇴 🇸🇪 set to join payment system INSTEX. Established by Germany, France and the U.K., INSTEX allows non-USD, non-SWIFT transactions, and so avoids US sanctions when trading with Iran. https://www.regjeringen.no/en/aktuel...tex/id2680468/
    Last edited by Cara; 2nd December 2019 at 06:13.
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    The protests in Hong Kong might be considered another “front” in the US-China trade war.

    This is a special report from RT on the situation in Hong Kong. It takes a direct swipe at Britain and its post colonial legacy there. It also asserts that the US simply took advantage of discontent to serve its own ends in its larger confrontation with China and concludes that this is a ‘colour revolution’.

    Given this, it’s unsurprising that the trade talks are not progressing.

    Video is 27min31 long.

    Quote Hong Kong unmasked: The real reasons & instigators behind anti-Beijing riots
    1 Dec, 2019 01:48 / Updated 20 hours ago

    As Hong Kong’s anti-government movement continues to rage, RT looks into what sparked the unrest, the dire social inequality problems that fuel it, and how forces in Washington exploited this public discontent for their own ends.
    Having personally witnessed brutal clashes and spoken to key figures on both sides of the barricades, RT America’s Michele Greenstein paints a comprehensive picture of the protest’s origins and handlers.

    The contentious extradition bill, which was the catalyst for the uprising this summer, served only as a pretext, while its nature was grossly misinterpreted. It doesn’t mean that the islanders – suffocated by prosaic issues like high prices, poor housing conditions, and declining employment prospects for graduates, rather than a lack of ‘democracy’ – have nothing to be angry about.

    Yet the demonstrators never challenged Hong Kong’s own authorities over this social inequality, directing their rage solely at mainland China – all while destroying their own city and virtually begging the US to sanction it, just to hurt Beijing.

    With young and progressive leaders of the Hong Kong uprising cheered as noble ‘pro-democracy’ warriors and welcomed in the US with open arms, Washington isn’t even trying to hide the fact that the protests have been hijacked to demonize and destabilize its main economic rival – China.

    “The original movement has been eroded. Now it’s just about opposition to Chinese government and the subversion of state power,” says Stanley Ng Chau-pei, president of the Federation of Trade Unions, the largest labor and political group in Hong Kong.

    It’s a ‘color revolution’

    WATCH the full reports by RT America’s Michele Greenstein:
    From: https://www.rt.com/news/474756-hong-...mpression=true
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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    Quote Posted by Cara (here)
    The protests in Hong Kong might be considered another “front” in the US-China trade war.
    And China is becoming the biggest prison in the world. So if China doesn't like it, then it's the right thing to do.

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    China has announced sanctions on the US based NGO Human Rights Watch and suspended review of requests by US warships to visit Hong Kong.

    Quote China imposes sanctions on US

    China urges US to stop interfering in its internal affairs, Chinese Foreign Ministry Spokesperson Hua Chunying said


    Chinese Foreign Ministry Spokesperson Hua Chunying
    © Artyom Ivanov/TASS


    BEIJING, December 2. /TASS/. China has imposed sanctions on the New York-based Human Rights Watch organization and suspended the review of requests by US warships to visit Hong Kong, Chinese Foreign Ministry Spokesperson Hua Chunying said at a briefing on Monday.

    She pointed out that "despite strong protests from China, the US authorities insisted on signing the so-called Hong Kong Human Rights and Democracy Act, which is a serious violation of international law and interference in China’s domestic affairs." "In response to the United States’ unreasonable actions, we have decided to suspend the review of requests from US military ships and aircraft to visit Hong Kong. We have also imposed sanctions on several US-headquartered non-governmental organizations, including National Endowment for Democracy, International Republican Institute, Human Rights Watch, Freedom House," the Chinese diplomat specified.

    "We urge the United States to correct mistakes and stop interfering in our internal affairs. China will take all the necessary steps depending on how the situation unfolds in order to protect the stability and prosperity of Hong Kong, as well as the country’s sovereignty, security and development interests," Hua Chunying emphasized.

    The Hong Kong Human Rights and Democracy Act, signed by US President Donald Trump, requires the US administration to conduct annual reviews of the situation in Hong Kong to make sure that the "one country, two systems" agreement is upheld, and impose sanctions on Chinese officials, who, according to Washington, are responsible for human rights violations in the administrative region.
    From: https://tass.com/world/1094643

    They are also signalling there may be further actions:

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    Default Re: Trade, Currency and Economic War: Sanctions, Tariffs, Market Sell-offs, etc.

    The current development indicates more tariffs, not only against China, but against NATO/EU members as well.

    Quote Trump threatens ‘delinquent’ NATO members with trade penalties as he says China deal can wait

    President Donald Trump on Tuesday threatened to expand his trade war to what he called delinquent members of the North Atlantic Treaty Organization, as he said a trade dispute with China could extend past next year’s election.
    https://www.marketwatch.com/story/tr...ait-2019-12-03

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