Transcripts For RT Boom Bust 20240713

Lends a 2nd hand to break down this and other major developments in the euro zone and later 2019 has been a shining year for gold as the price has jumped on economic turmoil david mcilvaine financial help us dig into the sector and how its been competing against other asset we have so much to get to today lets go. Stocks are falling across the board from their all time highs monday the penultimate trading day of the year equities have enjoyed a strong December Santa rally and Oil Prices Continue to trade higher on china u. S. Optimism the pullback today is most likely due to the fact markets are in the midst of a liquidity and news desert during those final few days of the year chinese vice premier and top negotiator leo ho will visit washington this week where he is expected to sign phase one of the agreement however a political concerns continue to bubble in the background as neither side has released any specific details of the trade agreement and no text has been released while the u. S. We are has released a mere fact sheet outlining what it claimed to be in the deal which included 80000000000. 00 in ag purchases over 2 years analysts consensus is that these figures do not add up and remain impossible benchmarks to fulfill it looks like the best we can hope for in the space one of the d. A trade deal is merely a point of truce in the bitter trade war rather than any real substantial changes which really begs the question of why even start a trade war if at the end nothing changed and youve wasted an entire year of economic productivity to help us answer this question and more we bring in professor Richard Wolfe host of economic update so richard this entire thing has been political theater from the start and you called it and now theyve been dragging this phase one out for a long time a signing ceremony translations legal scrubs more and more fluff trickling little bits of information every single day to give the markets an illusion of progress but is this thing actually going to get signed i mean multiple analysts have already came out and said that the benchmark exports set by the u. S. Are simply unfeasible as they have exceeded that of 2017 why would china agree to Something Like that. Well i think for the chinese its a question of gaining time for them this entire stuff started with the initiative of mr trump its political theater weve said that for a long designed to make mr trump appear for his reelection bid as the protector of the United States making the charlie knees and for that matter everybody else in the world give the United States a better deal beating up on the foreigners for cheating us thats as old as methuselah in the world of politics and mr trump is trying it again the charlie needs is know that that to hurt them as it has but they also know that it hurts mr drums reelection because it hurts my formers and others so the big. Bottom line is its a theater driven by that calculus mr trumps calculus how much does the theater gain me and the how much does the theater lose me and what every resigned this coming week it will be overwhelmed by how that calculus shifts between now and election day next nor the november but if the chinese side decides to sign something that they simply cant deliver on because these are impossible benchmarks to fulfill all of us we said then wouldnt it just be a question of if not when that like how chinese will default in the socalled agreements. I think this is a bit more complicated the chinese understand that they get some real immediate advantages tariffs that were set to go into effect wont now thats been agreed to tariffs that were imposed in september are going to be either eliminated or removed its still true that half of what comes from china is subject roughly to a 25 percent tower of but thats less damaging then they would have had to live with if they hadnt made this deal and theyd know because theyve watched mr trump that whatever they saw and now and what ever the conditions are none of that matters a month from now let alone 3 or 6 compared to what mr trump will be calculating as to the advantage or disadvantage of finding the chinese one thing on the one the end or finding them a partner to sign the deal with on the other hell be watching the stock market to help him decide which way to go its going to be a continuous theatre that we have to keep on watching i guess for the rest of point money is not going to change volatility is here to stay it seems now to us merchandising trade deficit trying to the naira since 2016 in november imports fell an export rose and now were sitting on. 60. 2000000000 in deficit so while the Trump Administration as you said is pointing to this and saying oh the trade war work isnt this great this is only half the story the u. S. Typically runs a deficit in merchandise and then a surplus in services so what conclusions should we draw here. From these numbers for the last month no conclusion its never a smart move to use any month let alone one now to draw such conclusions well have to wait and see for example the decline in imports for the United States which helps our balance could simply reflect the fact that were having more and more economic troubles for the mass of people and theyre just not buying the stuff that they used to buy some of which is imported and so you can see that theres a kind of multi level factors playing here very very premature to draw conclusions so now the w t l has reported that the u. S. China and germany they have benefited the most from global free trade their combined revenue in one year was 239000000000. 00 so despite all these benefits of this organization that the retail future is now uncertain at is facing some unprecedented pressures from washington so whats going to happen at the u. S. Continues to block appointments of the new appellate judges and if they were to fail when the u. S. Stand to lose out as well. Everybody asks that question thats the right question to ask but heres the fact that has to be faced the w t o like other agreements depends on a certain minimum good faith of all the participants mr trump has distinguished himself by not playing by those rules he has disrupted everything as hes done so intentionally at least made sure Everybody Knows it the short run advantage is all the headlines go to him the short run advantage is. Is he looks like the great protector of the u. S. In the way he hypes it but the long run is what were going to have to live through and in the long run damaging the w t o is teaching everyone china germany but the whole world that relying on the leadership of the United States is too dangerous to continue you cannot rely on something as unstable and its Foreign Policy as the United States has been if you want to be the world leader which the United States was you cannot do what mr trump has been doing and we will be living with the results of the readjustment of world trade taking into account the only reliability of the United States in a way we never had to do since the end of the such a world war im so glad you brought that up because right now everybody is saying oh my god were at what were up 27 percent this year this is a spectacular run for the market better than any Previous Administration but yet you bring up the fact that there are will be long term consequences so can you bring us some of these long term consequences despite the fact that the markets are now at all time highs. Absolutely let me give you 2 or 3 examples the 1st one more and more countries not just china and russia but other countries are deciding not to use the dollar anymore as the International Currency with which to conduct their trade their distress their deceased i wish id put it there disengagement from the dollar will cost the United States in years to come number 2. 00 theyre not looking to the United States for leadership theyre finding their own agreements signing their own bilateral arrangements and not just economically but also politically and militarily the cost to the United States of being excluded in these parts of the world by these actions is incalculable and 3rd and perhaps the most important all along you cant count on the United States as a market because of the tariffs the use by mr trump of cutting you off by hitting you with a big tax whenever its politically convenient to him once again if youre going to be the socalled leader of the World Economy you cant act freely as if you were just another player getting an advantage people except you but they rely on you and if you become unreliable they will disengage those are 3 very profound ways that we are headed into a very troubled waters and we should not be misled by one years stock market boosting which was done for that purpose but which has been done out of the cost of long term difficulty accent point professor richard roth thank you so much for being here. Budget carrier youre always counseled over 170 flights scheduled for the next 3 days as flight attendants at the Sister Company german wings prepared to strike tensions have been building due to disagreements concerning regulations on part time work and the u. F. O. Union warned that the strike can extend past 3 days notice if no agreement is reached the majority of the cancelled flights were done mess deck and stranded passengers were off the train tickets to their destination or get a seat on flights operated by other loved ones the timing of the strike during the busy Holiday Season made things especially problematic previous strikes in november that was on a smaller scale affected 180000 passengers and cost the airline 22400000. So much more on this were joined now by hilary for which board member of the British American Business Association so hilary now that the you have recently held their strike against back in november that was quite recently just a month ago so this was over the exact same issues previously wage demands pensions part time work was nothing done in november and why is this still continuing and will this continue to bleed into 2020. Well you know its going to continue and obviously into 2020 because were so close to the holidays and this is a subsidiary of towns and theyre basically the cheap Budget Airline so what they did is they short shifted this and yes they were concessions made back in november but really its sort of like its on the handed tactics obviously the union knows this is the busiest time of year at least the status right now is as follows love turns actually go a little bit of leverage because basically this is affected really only domestic german flights and so theyve been able to offer rail passes to all of those german citizens that are stranded at the moment so at least it was some of the dire circumstances they will have to make financial concessions that certain but i dont think youre going to see them cave in a major way to the union because obviously theyve been able to do something domestically i think in the future theyre going to have to repair the brand because its the brand thats taken a huge hit over this so we have a lot of issues plaguing germany at this time and while germany is kind of floundering a little bit india is now expected to overtake germany to become the 4th largest economy in 2026 according to the center of economics and Business Research so are we now seeing a kind of shift of the status quo in the world leader board where you now have india in 4th japan rising to 3rd and the u. S. And china kind of ballet out for 1st and 2nd are we see a power shift to the east now. Well eventually what were going to see chrissy of course is because youve got a 1000000000 people each in india and china so its that fact of numbers basically eventually with a 1000000000 people you have far larger vaska demographics and a demographic base however i would say this is not going to be happening this decade mainly because you look at the ethics of the laws in place that we have in the west you look also at the transition of students you dont find the brilliance of the brains rushing over to india and china from the u. S. What happens is you have Chinese Students and Indian Students they come to the u. S. They come to study and 63 percent of all the global unicorns are high tech unicorns are in the west and so main bridge on only in the United States and of course the High Tech Center of london so youre not going to see it immediately what has to happen there is you have to see if the chinese ever free up their society if you see them actually encouraging entrepreneurship that may shift the power but at the moment at least diplomatically the u. S. Is going to remain as a force that it is and i heard the previous gentleman obviously the recent tactics have somewhat made that less stable but i would say not in the foreseeable future mainly only because of the entrepreneurship that we have and the ethics in the in the west compared to the chinese now moving on to the west the e. U. s new trade commissioner phil hogan said that he now wants to quote reset the e. U. U. S. Trade lesions on a number of very contentious issues next month so whats on his agenda for 2020. 1 hes got a lot on his agenda actually hes known as big phil he had a very Good Relationship with young hes a towering 6 foot 5 irishman and on his agenda immediately would like robert lighthouse of the u. S. Trade representative they have to discuss steel and aluminum because those are 2 huge issues the tarp the troubled ministration imposed immense tower of in 2018 and also over 7500000000 in tower of on products so the idea obviously is to waive those towers but the u. S. Imposed due to the backing of the european plane maker. And also the u. S. Is threatening to impose some sort of sanctions because of all the digital taxes being imposed by the e. U. And particularly coming out of france in terms of all of our global big digital and tech farms so what youre going to see is youre going to see this striving for notaras but the big contentious issue is that the u. S. Out of washington wants us Farm Products to be at the center and brussels does not want foreign products to be sent all of which is rather ironic actually because big phil as hes known phil hogan grew up on a farm in ireland and previously was a farmer was going to be interesting to see how big bill steps up hilary for the British American Business Association thank you so much variance. Because the. Time now for a quick break but hang here because just on the other side of the break 29 has been a stellar year for gold but how does the metals stacked up against other assets and what can we expect Going Forward David Mckelvey of mckelvey financial lenses a hand to give us his outlook and as we go to break here are the numbers at the close. Of the was the but if she warned you i do the dishes at the bottom or in those jeans new speech and she me we need to be true she. Doesnt know about that and when you die. In the news i mean guys without infringing balls. A lot of you will see as if parts of the 2 kids each other both are the most called. Discipline but as in the adults to me as if archer. These. Days doing research. In English Media you think you can do simply. So what weve got to do is identify the threats that we have its clear. That you dont from day shouldnt let it be an arms race is on all sides period Dramatic Development the only really im going to resist i dont see how that strategy will be successful very critical time time to sit down and talk. And were going to fulfill the repeated purposes of politics to the people come on you know weve all but the truth. Is you. Really really. Now you want to work. Know. All the. Polling coming. Tells all rolled out the 1st model t. Cars built at its shanghai gigafactory monday but rather than celebrating the stock is tanking tumbling down nearly 5 percent why while analysts are seeing these 1st 15 cars being delivered as merely a publicity stunt the company made it a ceremony and made a huge a big fuss about why. An important milestone this is to say that they achieved deliveries in 21000 furthermore analysts say that vehicle deliveries may miss the companys target this year as model 3 demand has slumped this report coincides with what lauren fix said last week about there being market saturation as we start seeing a shift from pent up demand to steady flow demand i know initially theyre going to be delivering 15 cars by the end of the years so we can say that he delivered cars in 2019 thats more of a publicity stunt than anything else we also have to remember we need sales and if theres no sales there then youre producing product that just sits and thats partly what temp and youre in the u. S. Where theres lots of vehicles sitting in different locations around the country you can look it up on line but as a surety Airforce Base and theyre just parked and thats not good you never want to build product thats not being sold youre better off having consumers wait. Now another issue facing tesla will be pricing and mix issues in china as the opening of the china factory has been a key reason for the stocks recent outperformance the best selling e. V. In china was. And its still less than 2000 new goals per week the top 5 models combined sold less than 6000. 00 vehicles per week and they all cost about 25 percent of what the china made model 3 is expected to cost while it has been a great fan base the future outlook towards broader Adoption Remains skeptical. Vodafone hutchinson australia has teamed up with nokia rather than huawei to roll out 5 g. Network in australia the 1st half of 2020 australia had banned from providing equipment for australia amid unproven fears that the company could be used as a front for spying by beijing while the us has urged other 5 member to exclude way from its new Telecommunications Network australia stands alone as the only member aside from the us with an all out ban on fall way this has led to an increasingly strained relationship with beijing as china is australias largest trading partner there is concern that beijing will seek economic reality ation for its hardline stance against fall way now holway urge australia to overturn a ban on the farms involvement adding that the ban has stifled competition pushed up costs and made it likely that regional and rural customers will receive limited or no 5 g. s services at all the band has also raised cost by an estimate of 20 to 40 percent and now nokia is the beneficiary of these restrictions and western nations and on Market Access up over 2 percent today. And as we wrap up the year we have to talk about bitcoin the best before my asset class of this year by far now year day gold is 16 percent the s. And p. Is up 27 percent. Palladium is up 52. 4 percent while big client is up and astounding 116 percent year to date and with the network having in 2020 many hardliners are anticipating another rally for big climb within the next 6 months to give us more on this we bring in david knapp of any of the mcavennie Financial Group so david after new legislation takes effect on january 10th of 2020 right now the anonymous purchase limit for gold well drop from 10000 euros to 2000 euros people are now queuing up around several blocks in these last few days to buy gold especially if theyre particularly concerned about the e. C. B. As controversial economic practices of these negative Interest Rates so gold so far has been a steady guard against inflation so why dropping the limits on these purchases now of all time. Well gold is not only protection against inflation thats also a protection against financial repression which is what negative Interest Rates are this is a policy choice among central bankers and central planners to choose winners and losers and the losers in this case are savers so your opt out is to either put money in the mattress or to buy gold if you can start to close off those options which is what theyre doing essentially by moving the the number down from 100022000 youre creating more of a corralled and captive audience which is exactly what you need to effectively implement financial repression this is in my view like building a berlin wall where youre capturing a set of investors and not allowing them to escape so that you can then implement this idea of financial repression thats whats happening and i think gold is is showing that it has it always has been its a tool of Financial Freedom now gold has just more than 3 months on friday and its still going on so traditionally gold doesnt rally in step with us i usually its one or the other risk on or risk off however this year weve seen both do pretty well so whats happening here. One thing to say is smart money is already moving to the exits moving and selling industry some for some of their equity positions and repositioning in gold as a safe haven into supporting what could be a volatile year in 2020 but i think if you look at some of the economic fundamentals we have 2. 00 money supply growth of over 1. 00 trillion dollars in 2019 we also have the fed Balance Sheet since september expanding by 400000000000 thats going to accelerate in interest in gold and so these i think are some factors to keep in mind not only that but we have a deficit this year of over a trillion dollars with the expectation from the the Congressional Budget Office over a trillion dollars in a budgets every year budget deficits that is every year for the next 10 years i think these are all reasons why investors are already moving in the direction of gold now new reports also show that Central Banks in twentynine have also been hoarding gold gold purchases are now record highs from Central Banks around the world including new gold buyers such as kazdin and turkey so why are the world Central Banks now stockpiling reserves at these record levels just smart money flocking again. Exactly and i think it is a continuation of a trend you saw central Bank Liquidations up until 2009 and gradual accumulations from 2009 to the present but really its accelerated in 20172018 here and 21000. 00 with Central Bank Central bankers purchasing record amounts one of the key trends here i think what youre looking at is diversification away from the u. S. Dollar and this is for a couple reasons one having gold as a reserve asset it solidifies what your currency represents it is something that legitimizes a domestic currency so that is happening it is a diversification away from u. S. Dollars and i think that is happening because youre trying to create an insulation from Treasury Department influence in domestic economies weve seen the u. S. Treasury get involved and even. Troll and create certain outcomes and so theres a desire to create some insulation from the u. S. Treasury and their ability to manipulate or control financial circumstances gold again represents Financial Freedom both for the individual investor as well d as for the central banker who wants some distance from us from u. S. Policies now another diversification away from the us talk a little bit about bitcoin big quine is what we call digital gold but that digital gold needs to be stored and i kept a wallet and right now there has been another clamp down recently google removed. Rouser mehta mask from its Android App Store and now apple may also forced to remove their data browser feature from its crypto while app as well so this is really unfortunate to see and as web 3 is in direct competition with google and apple should we expect this continued censorship on metamath and other dapper dollars. Kristie i think the consistent theme from talking about the e. C. B. To talking about google is control the word is controlling who is going to control the world of money and finance in this case youre talking about something that may represent an opt out just like were talking about gold is an opt out from domestic currencies or from the euro so you have bitcoin as an opt out as well who is going to control that you see the chinese wanting to launch their own crypto currency and so its very clear who is going to control the space in china now if youre talking to the giants like google they would certainly like to have more and more control and influence over that market and i think ultimately were talking about competition with state monopolies and so that i think is where the real challenge is on the horizon will google ultimately introduce like facebook did something that represents a challenge to the u. S. Dollar that it will have to see i dont think the u. S. Treasury will like that either David Mckelvey mcavennie financial thank you so much. Thank you kristie. Catch up by this time you can catch boom bust on new to dot com boom bust r t. Stand next time. Please today there are good dentists and bad editors the bad news in yemen the United States deems to be a threat the look to those who work in syria the cia and the u. S. Military were engaged in covert actions really throughout the world. Where they were assassinating populist leaders they were backing up the right way military juntas funding an army just was theres no anymore because theres always a small people for a really good thats. A profit. World. Wow 2020 should be a whopper of. Course in the crossfire iraq summons the u. S. Ambassador in baghdad over sundays deadly american airstrikes in the country which the pentagon says targeted iranian backed minutes. To come this hour we go in search of a connection on the outskirts of good in amid a slew of headlines saying the germans are getting creasing for straight slow internet speeds and coverage we ask locals just to see whats. Called loss of footsie this is impossible to understand 7 years ago i was driving through estonia the baltic republics and poland even today i dont have that quality of connection in germany. Found a new years miracle we find out what happened to a little boy who was pulled from the ruins of a towel