USA’s tariffs 2
USA's tariffs 2
Markets are not the economy. They are a small part of the economy that can have an impact on the whole economy. Markets are a financing mechanism and a place where people make or lose money. NWO media claim that some of Trump's supporters have been losing lots of money. It is not certain that they are losing and as a matter of fact they could be making money. How could that be possible? Because people can make money even when markets go down.
According to Forbes, the three richest people in the world are; Musk 362,5 bln, Bezos 189,4 bln Zucherberg 174,9 bln. Musk has as much as the two other together. Most of this fortune is not in the bank or in real estate. It is in stocks of their companies. Suppose that a stock's value is 100$. The stock price starts going down and it reaches 75$. That is a 25$ or 25% PAPER LOSS. It is NOT REAL LOSS.
For the loss to be real, the stock owner would have to sell the stock. If the buying price was 100$ and the selling 75$, then there is a real loss of 25$. Suppose that the stock owner had bought the stock when its price was 55$ and sells when it is 75$. The stock owner has a real gain of 20$, even if the stock has fallen from 100$ to 75$. For REAL LOSS or PROFIT, all it matters is BUYING and SELLING prices.
STOCK PRICE FLUCTUATIONS while the owner HOLDS the STOCK are IRRELEVANT and do NOT AFFECT REAL PROFIT or LOSS. Suppose the owner bought the stock when it was 100$ and has gone down to 75$. If s/he sells at 75$, he would have a real 25$ of 25% loss. Let's say that he holds the stock. After a while, it reaches previous levels and goes even higher to 110$. That is when the owner sells. He makes a profit of 10$ or 10%, even though for a while he was losing 25$ or 25% on paper.
The loss or profit becomes real only when the owner sells. While he keeps the stock, losses and profits are only on paper. The way to make money in markets is to buy low and sell high. Although some of Trump's supporters are losing money on paper because the stock prices are going down, they may be be making real profits, if they are among the sellers.
Let's say that the stock in the example above is in a company of a Trump supporter. He sells 1 million shares at 100$ when the price started falling. Then he buys the same amount of shares, when the price is 75$. After some time, stock price reaches 100$ and he sells the stocks, making a profit of twenty five million (25 mln). Alternatively, he could buy 1,33 million shares at 75$ with the money from the sale and have 33,33% more shares. Also derivatives, futures or options could be used.
IF TRUMP is RIGHT, the TARIFFS he imposed would be BENEFICIAL for USA's economy. So after a while, USA MARKETS should REBOUNCE, reach previous levels and go even higher. The right time to buy stocks is when market is down, if it is estimated that it will go up again. That is what Trump meant when he said that it is the right time to invest in USA.
It would not be the same in all countries. USA's tariffs would not be beneficial for all countries, as they might be for USA. Decreasing trade deficit is beneficial while decreasing surplus is not. So in those countries where their surplus with USA is expected to decrease, markets should fall and they may not reach previous levels for a long time. Of course what matters to markets is changes in economy's prospects.
Trade is only part of the economy and trade with USA only part of overall trade. Some of the countries in USA's list do not have trade surpluses or these are small. So instead of retaliating to USA, they should look into their balance of trade and find where they have deficits. The way to respond to USA's tariffs is to impose tariffs on the (products of) countries they have deficits and not on USA's products. They could also use other tools like subsidies and quotas.
For the countries that do not have trade surpluses or these are small, there is a way not to get harmed by USA's tariffs. The right way is not retaliatory tariffs but tariffs to countries they have deficits. With USA, they probably have surpluses. Retaliatory tariffs are unjustified if a country still has a surplus. They are justified, only when the surplus becomes deficit.
Likewise, according to our opinion, it is unjustifiable if USA is imposing tariffs on countries with which it has a trade surplus. Some of these countries are in EU and are suffering the negative consequences of their decision to be in that disaster. If there was not an EU, USA would impose tariffs only to countries it has large trade deficits, like Germany, Ireland, Italy, France.
This should be viewed country by country and company by company. USA's tariffs do not have the same impact on all countries or on all companies. Countries with overall deficits or small surpluses, would be able to end up being unharmed by USA's tariffs, if they fix their deficits with other countries. The trade "war" should not be with USA but with countries they have a trade deficit.
For individual companies, it depends on the percentage of total sales, USA sales are. Obviously, tariffs would bring their sales in USA down. Some companies may be able to make up these lost sales in other countries. In the long run, many countries and companies could not be harmed by USA's tariffs but they should make adjustments. Probably countries that have large surpluses with USA and overall, like Germany and Ireland will be harmed.
Elon Musk stated that he hopes there will be free trade between North America and EU. AntiNWO supports fair trade, not free trade. If free trade is fair, it would be great. But most likely, free trade can't be fair. In order for that to happen, all countries should have the same competitiveness, which is not the case. AntiNWO supports decreasing trade barriers to the extent possible, as long as trade is fair.
AntiNWO is against EU for several reasons explained in many previous articles. All EU's fundamentals are fundamentally wrong. They have free trade which is not fair. EU is a very unfair Union. Also common currency is fundamentally wrong. It brings price level up in countries that had weaker currencies before euro and this harms their competitiveness. Usually these are countries with lower productivity. So common market and common currency is a double harm for many countries in EU.