The Chinese never intended to make a deal, and now they are publicly admitting it. For months, I have been warning readers of The Economic Collapse Blog that a comprehensive trade deal with China will not happen before the 2020 presidential election, and the reason why this is the case is actually very simple. The Chinese have concluded that President Trump will never give them the kind of deal that they are looking for, and so their entire goal has been to run out the clock on the Trump administration so that they can finally get to a Democrat that will be much more “reasonable” to deal with. Of course if Elizabeth Warren or Bernie Sanders wins the election, they won’t be very “reasonable” either, and so the best case scenario for the Chinese is for either Joe Biden or Hillary Clinton to emerge victorious in November 2020. In any event, the Chinese are now being very clear about the fact that they are never, ever going to agree to Trump’s core demands. The following comes from CNBC… (Read More...)
Lending
It’s Over: The Democrats And The Republicans Are Both Conspiring To Bankrupt America And Destroy Our Future
Both major political parties are working together to destroy America’s financial future, and most Americans don’t seem to care. Once upon a time, the Republicans were considered to be “the party of fiscal responsibility”, but now they are just as bad as the “free spending” Democrats. As you will see below, a “compromise” budget deal was just reached which will dramatically increase federal spending and will suspend the federal debt limit until after the next election. In other words, both sides are conspiring to make our debt problem much, much worse over the next year and a half, and this should be causing howls of outrage all across America. But instead most Americans seem content to go along with the free spending ways of our political leaders, and only a handful of voices are sounding the alarm as we steamroll toward financial oblivion. (Read More...)
There Is An Increasing Amount Of Buzz That China Could Invoke The Rare Earth “Nuclear Option” In The Trade War
If China wants to cause a massive amount of pain for the U.S. economy in this trade war, they certainly have the firepower to do so. Today, China accounts for more than 80 percent of the world’s rare earth element production, and approximately 80 percent of the rare earth elements that are used by U.S. companies are imported from China. The U.S. does have one facility that mines rare earth elements in California, but everything that is mined there has to be shipped to China for processing. So at this point we do not have the ability to supply our own rare earth element needs, and that gives the Chinese a tremendous amount of leverage. (Read More...)
Trade Talks Are Dead, And So U.S. Consumers Should Brace For A Long, Bitter, Painful Trade War With China
There is not going to be a trade deal between the United States and China any time soon, and that is going to mean a tremendous amount of pain for the U.S. economy. For months, hope that the U.S. and China would soon reach a trade deal helped to elevate global financial markets, but now that hope has disappeared. In order for a trade deal to happen, the two sides have to talk, and at this point no negotiations are scheduled. And unless one side or the other decides that they are willing to move dramatically from their current positions, there really isn’t any reason to talk. In fact, the Chinese government is openly saying that it is in “no rush” to negotiate with the United States… (Read More...)
The True Size Of The U.S. National Debt, Including Unfunded Liabilities, Is 222 Trillion Dollars
The United States is on a path to financial ruin, and everyone can see what is happening, but nobody can seem to come up with a way to stop it. According to the U.S. Treasury, the federal government is currently 22 trillion dollars in debt, and that represents the single largest debt in the history of the planet. Over the past decade, we have been adding to that debt at a rate of about 1.1 trillion dollars a year, and we will add more than a trillion dollars to that total once again this year. But when you add in our unfunded liabilities, our long-term financial outlook as a nation looks downright apocalyptic. According to Boston University economics professor Laurence Kotlikoff, the U.S. is currently facing 200 trillion dollars in unfunded liabilities, and when you add that number to our 22 trillion dollar debt, you get a grand total of 222 trillion dollars. (Read More...)
Housing Crash?: U.S. Existing Home Sales Fall By The Most In Six Years
We just got more evidence that a major economic slowdown is underway here in the United States. Existing home sales were down a whopping 7.1 percent during the month of February, and this represented the biggest decline that we have seen in six years. This is yet another sign that we are in the early stages of a new crisis that is eerily reminiscent of what happened back in 2008. The truth is that most U.S. consumers are tapped out, and when you are tapped out it is really hard to get a mortgage. Banks aren’t really fond of lending money to people that can’t pay it back, and in recent years housing prices in many areas have risen to levels that are beyond the reach of most middle class families. (Read More...)
10 Shocking Quotes About What QE3 Is Going To Do To America
Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn’t happen with either QE1 or QE2. Both times the banks just sat on most of the extra money. As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs. As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different? But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets. So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise. But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis. The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar. Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency. If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before. The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term. Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. (Read More...)