The Last Refuge

NEC Director Larry Kudlow Discusses China, EU Trade and July Jobs Report…

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National Economic Council Director Larry Kudlow on trade negotiations with China, and how the EU is positioning to off-set global economic contraction.  Additionally, Kudlow discusses the aspects of the July jobs report overlooked by Wall Street pundits.

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Do not overlook or underestimate the importance of the bigger picture behind the global economic forecasts and the collective alignment against U.S. President Donald Trump.  The ‘America First’ program is against their interests. There are trillions at stake.

Asia, primarily China, and the EU rely on common alignment with the multinationals who control Wall Street and have influenced U.S. trade and economic policy for 35 years.

The June figures show surpluses, in billions of dollars, with South and Central America ($4.8), Hong Kong ($2.3), Brazil ($1.3), and United Kingdom ($0.1).

Deficits were recorded, in billions of dollars, with China ($30.2), European Union ($15.9), Mexico ($9.2), Japan ($6.2), Germany ($5.2), Canada ($3.3), Italy ($2.6), France ($1.9), Taiwan ($1.7), India ($1.6), South Korea ($1.4), OPEC ($0.3), Saudi Arabia ($0.3), and Singapore ($0.1).  (BEA Release)

The IMF is now upgrading their forecast of U.S. economic growth; and admitting -in essence- that President Trump’s America-First agenda is relocating global wealth back to the primary host nation known as the U.S.A.   The increase in their forecast isn’t a small increase, it is essentially adding .3 percent (from 2.3% to 2.6%) or $60 billion more.

In the bigger picture this is why President Trump is the most transformative economic President in the last 75 years.   The post-WWII Marshall Plan was set up to allow Europe and Asia to place tariffs on exported American industrial products.  Those tariffs were used by the EU and Japan to rebuild their infrastructure after a devastating war.  However, there was never a built in mechanism to end the tariffs…. until President Trump came along and said: “it’s over”!

After about 20 years (+/-), say 1970 to be fair, the EU and Japan received enough money to rebuild.  But instead of ending the one-way payment system, Asia and the EU sought to keep going and build their economies larger than the U.S.  Additionally, the U.S. was carrying the cost of protecting the EU (via NATO) and Japan with our military.   The EU and Japan didn’t need to spend a dime on defense because the U.S. essentially took over that role.   But that military role, just like the tariffs, never ended.  Again, until Trump.

The U.S. economy was the host for around 50 years of parasitic wealth exfiltration, or as most would say “distribution”.  [Note I use the term *exfiltration* because it better highlights that American citizens paid higher prices for stuff, and paid higher taxes within the overall economic scheme, than was needed.]

President Trump is the first and only president who said: “enough”, and prior politicians who didn’t stop the process were “stupid” etc. etc.  Obviously, he is 100% correct.

For the past 30 years the U.S. was a sucker to keep letting the process remain in place while we lost our manufacturing base to overseas incentives.  The investment process from Wall Street (removal of Glass-Stegal) only made the process much more severe and faster.  Wall Street was now investing in companies whose best bet (higher profit return) was to pour money overseas.  This process created the “Rust Belt”, and damn near destroyed the aggregate manufacturing industry.

Fast forward to 2017 through today, and President Trump is now engaged in a massive and multidimensional effort to re-balance the entire global wealth dynamic.  By putting tariffs on foreign imports he has counterbalanced the never-ending Marshal Plan trade program and demanded renegotiation(s).  Trump’s goal is reciprocity; however, the EU and Asia, specifically China, don’t want to give up a decades-long multi-generational advantage.  This is part of the fight.

One could argue that China’s rise happened inside this period, and as a consequence they have no comprehension of an economic history without the institutional advantages.  They’ve never competed with the U.S. under any terms of equivelence or fairness; they’ve only ever known the advantages.  Combine that with the Chinese communist mindset and you get the extreme severity of their position.

So yeah, there’s going to be pain – for them; massive economic pain – as the process of reestablishing a fair trading system is rebuilt.  This dynamic is the essence of reciprocity that benefits Main Street USA.  Unfortunately, putting ‘America First’ is now also against the interests of the multinationals on Wall Street; so President Trump has to fight adverse economic opponents on multiple fronts…. and their purchased mercenary army we know as DC politicians.

No-one, ever, could take on all these interests.  Think about it…  The EU, Asia, World Bank, International Monetary Fund, China, Russia, U.S. Chamber of Commerce, Iran, U.S. Congress, Democrats, U.S. Senate, Wall Street, the Big Club, Lobbyists, Hollywood, Corporate Media (foreign and domestic), and the ankle-biters in Never Trump…. All of these financial interests are aligned against Main Street USA and against President Trump.

Name one individual who could take them on simultaneously and still be winning, bigly.

They say he’s one man.  They say they have him outnumbered.  Yet somehow, as unreal as it seems, he’s the one who appears to have them surrounded.

Incredible.

Lord knows we can’t spare this man.

He fights!

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