In this report I cover the early market action from London on Thursday, August 2nd, 2018. I look briefly at the precious metals, the stock market, the dollar, the bond market and the oil price.
Today I look into whether the current trade disputes or wars between the U.S. and its major trading partners like China, the E.U. and Canada are actually a preparation for a new world monetary architecture or reset as it is sometimes called.
I argue that for the last half century America has had the exorbitant privilege of being able to finance its imports via money printing as the dollar has been the world reserve currency. Up until now the trade deficits and the current account deficits have not mattered as there has been ample demand for dollars from abroad.
With a a new monetary order or reset in which the dollar is not King any more the U.S. would have to start earning in other currencies and that can only occur if America starts making more thing and exporting them in order to earn foreign currency.
My conclusion is that the reason president Trump is going after America's trading partners for better deals is that he knows a monetary reset is coming and America needs to level the playing field before that occurs.
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