"Now The Real Economic War Begins, With America And Europe Allied"

Submitted by Eric Peters, CIO Of New River Asset Management, as excerpted from his latest Weekend Notes

The US and EU account for over 50% of global GDP and have the world’s largest bilateral trade relationship, exchanging $1.1trln of goods and services annually; there’s no more integrated economic relationship on earth. One-third of world trade involves the US and EU - the US is humanity’s #1 customer, accounting for 18% of all imports, the EU is #2 at 15%.

Total US investment in the EU is 3x higher than its investment in all of Asia. EU investment in the US is 8x higher than its investment in India and China combined. The US and EU have 880mm people (12% of total population), $180trln of wealth (65% of global wealth) and own nearly all of humanity’s intellectual property.

To be sure, we have our differences, but heaven help this planet’s divided nations if we set those aside and seek material advantage.

* * *

“Mr. President, ladies and gentlemen, when I was invited by the President to the White House, I had one intention: I had the intention to make a deal today,” announced Jean-Claude Juncker, camera’s clicking, a media whir, history in the making. “And we made a deal today,” continued the President of the European Commission, as a shockwave circled the planet.

You see, throughout Europe’s timeless saga, never had a single politician cut a real deal on behalf of the entire continent, though not through any lack of effort. Many fought to attain the power of a united Europe - the Romans, Charlemagne, the short Frenchman with an ulcer, Austria’s most famous Adolph. Juncker’s unlike them all. He’s a creature of Europe’s modern union, a concept born of utter exhaustion, profound weakness.

After a few thousand-year fight with itself, the continent abandoned ambition, and became a tourist attraction for wealthy Americans and Chinese, who swarm its antique cities, admiring their ancient achievements, aspirations.

“So we had a big day. Very big. We met right here at the White House to launch a new phase in the relationship between the United States and the European Union — a phase of close friendship; of strong trade relations in which both of us will win; of working better together for global security and prosperity; and of fighting jointly against terrorism,” said Trump, triumphant.

“The European Union is going to do better, stronger, bigger. We will therefore work closely together with like-minded partners to reform the WTO and to address unfair trading practices, including intellectual property theft, forced technology transfer, industrial subsidies, distortions created by state-owned enterprises, and overcapacity,” continued our President, describing China, America’s only rival, the one remaining world power with any true ambition.

And so now the real economic war begins, with America and Europe allied.

Comments

JibjeResearch dirty fingernails Mon, 07/30/2018 - 00:45 Permalink

Let's wait and see ...

Don't doubt the EU, it will do whatever it takes to make the Euro a powerful warlord.  The Euro does not want to be 2nd to anybody, the most powerful warlord is its goal.

Same with the USD and the Yuan.

I really like how it is turning out.

As I said before, the world has 3 powerful warlords: the USD, the Euro, and the Yuan.

Two warlords, the Pound and Yen will have to find an anchor, it could be the collateral damage.

The gas station will do nothing, except supplying the gas lolz ... smart move!

The rest of the want to be warlords will align to one of those 3 powerful warlords.

 

Man, I'm seeing thing clearly lolz ahahhahahahah

Hedge accordingly...

Best Wishes to all :)

In reply to by dirty fingernails

07564111 Free This Sun, 07/29/2018 - 22:46 Permalink

Junker does not now nor will he ever speak for EU money. You should think carefully before taking the shit in this article seriously.

You should give pause and think about the recent article @ZH wherein Bannon is setting up 'The Movement' in the EU. Actions ALWAYS have consequences, some times not to our liking or expectations.

In reply to by Free This

hound dog vigilante 07564111 Sun, 07/29/2018 - 23:53 Permalink

^^THIS x10^^

 

Trump/US is playing DE/EU. 

Think about it this way... for a true deal to have been made b/t the US & EU/DE, there would have to be consideration/quid pro quo - each side offering things of approx. equivalent value.  DE/EU have very little - almost nothing - to bring to the table.  Maybe they'll 'pledge' to pay their UN/NATO bills and/or allow certain US exports cheap entry into the EU market... that's about the extent of DE/EU's cards&chips... which are being offered in exchange for the continued security of global trade/routes + security of EU itself + access to US markets + the list goes on & on... in a nutshell, EU/DE want filet mignon in exchange for a ham sandwich.  Ain't gonna happen that way.

 

First of all, DE/EU will not live up to their end of the bargain... they never have, and won't start now. Second, this entire 'deal' is just a ploy by Trump/US to increase leverage for a better deal w/ China. Further, as described above, Trump/Bannon are openly sabotaging the EU & specifically it's elitist leadership class (which Junker exactly embodies). 

 

Junker got played, and when europe realizes that Juncker was bested by The Donald, Juncker & his allies will be marginalized. Allowing europe's precious reputation to be ruined/exploited by the Ugly American is not a forgivable offense in europe, period.

 

In reply to by 07564111

JIMSJOE2 Free This Mon, 07/30/2018 - 07:16 Permalink

China like most countries in the west have centrally planned economies. In the US on a national level it is the FED who controls rates and the money supply and Congress who controls taxes and regulations just like China's Communist Party and the PBOC Going down states also control their economies thru state legislatures and on a local level counties and cities do the same. China has the same setup but with provinces and also local governments. We call the Chinese system communists and in  the US democracy but the fact is China has been moving to capitalism and the US to socialism and fascists where big business and government are intertwined.

    Now the yuan is not toast and has been trading in a range for over a decade and the bullshit that it has been collapsing does not fit with the facts. Just because it has become weaker against the dollar does not mean a collapse. According to Armstrong Economics computer models after around 2032 the move of the financial center from the west to China will have been accomplished. The yuan will then be THE worlds reserve currency but they are not there yet according to Armstrong. Their bond market is still too small and does not have the liquidity that treasuries have but they are getting there.

    It is Europe that is toast and the computer models back in 2009 forecast that it is beginning to collapse and capital will flow out and into dollar based assets which we have been seeing since 2011. The models forecast that as we move to the end of 2018 capital will again accelerate out and around 2020/21 the shit hits the fan there. Draghi has destroyed the bond market there, the traditional banking system and most economies. If the ECB stops buying and/or guaranteeing sovereign and corporate debt, rates skyrocket and it collapses faster. If they keep buying the euro collapses faster. The EU, euro, most banks, many corporations and countries will not survive in their present form. In a recent interview Armstrong said their computer models are already seeing capital accelerating out again. In addition the cost of the migrants has simply made many cities and countries more insolvent.

    Brussels now wants to tax directly all EU citizens and businesses and have one central budget for the union controlled by Brussels. Countries have already lost the ability to control their budgets because of EU mandates and now Brussels wants to take control of all EU member budgets directly. Armstrong also said recently that it was Brussels who forced Italy to raise taxes on homes there with an additional 2% tax on primary homes and 9% on second homes. This will collapse the real estate market in Italy and then the economy which still is in serious trouble already. Europe has no federalized bond market where debt is guaranteed by all members so this causes severe limitations for the euro. Now Juncker and Macron want to do exactly this and make all members be responsible for other countries debt. This shows how desperate they have become as they know the whole house of cards is collapsing and Brussels wants to control everything. They are simply running out of money. Armstrong said recently also that if the euro survives beyond 2021 it will be a miracle.

    EU officials ask for an emergency meeting some months back with Armstrong and staff and they flew to Brussels. The EU was told that the collapse cannot be stopped only how hard it falls.

In reply to by Free This

WTFUD dirty fingernails Sun, 07/29/2018 - 21:49 Permalink

Churchill was responsible for the unnecessary deaths of hundreds of thousands of British/Commonwealth Soldiers, through a combination of Hubris, bad choices of Generals/Tactics and being a drunk . . . . however could that man write a damned motivational speech; the fodder were so spellbound by his speeches that they couldn't wait to climb over the top and into a hail of bullets.

What was the question again?

In reply to by dirty fingernails

Fireman IridiumRebel Mon, 07/30/2018 - 01:31 Permalink

The anglozionazi abomination of USSA shags the anglozionazi abomination of the EUSSR as both are being over run by the Muslim hordes from USSA'S serial judaic wars. What could go wrong?  Has already gone wrong! Now watch the long awaited collap$€ of their fiat filth scam as the elites get eaten and the unwashed become ever more revolting.

In reply to by IridiumRebel

BitchesBetterR… Sun, 07/29/2018 - 21:51 Permalink

Gotta laugh at these kind of articles, given all the current geopolitical problems between the USA & Europe with the Economical pain caused by the Russian sanctions, the Iranian Oil issue, the tariffs, the NATO military budget, the USA Gas and Oil purchase extorsion while undermining European's energy consumption, The forced migration caused by the USA/Israel "regime changes", etc YET somehow Trump pulled a 4D chess game move to convince the EU to go along with a full blown Economic war against China........ LOL   

 

Europe at this point is likely flipping EAST than severing ties with a dying empire....... wake the fuck up!!

 

edotabin BitchesBetterR… Sun, 07/29/2018 - 22:07 Permalink

For  Merkel it's easy. She is from the East.

I think the US and Europe have much in common and should proceed together. I just don't like using sneaky, insidious tricks to bind people into commitments and situations that they never signed up for.

Farage pretty much covered my position quite well and very eloquently in his Euro parliament speeches.

In reply to by BitchesBetterR…

Bludklot The central planners Mon, 07/30/2018 - 12:52 Permalink

We're buying Russian gas because the politicians in New England passed legislation to force power companies to use gas instead of coal before doing their homework that would have led to the realization that the pipeline infrastructure is insufficient to transport the required quantities. So they rented French (?) LNG carriers to transport Russian gas to Boston.

In reply to by The central planners

Jackprong Sun, 07/29/2018 - 22:03 Permalink

Two things must happen:  EU countries must provide 4 percent of their respective GDPs to defense; drop all tariffs between both U. S. and EU nations for a free trade zone.  Some new thinking is required.

opport.knocks Jackprong Sun, 07/29/2018 - 22:38 Permalink

It is time for your "old thinking" to take a hike.

For the 10,000th time NATO has never defended anything from anybody. The original purpose of NATO was make the continued US occupation of Germany look legitimate, as well as to keep Germany down and Russia out. That has not changed. What has changed is the use of NATO members as "Coalitions of the Killing" to invade other countries in the Middle East and North Africa.

Individual EU countries are not going to spend 4% on "defense" (AKA supporting the MIC and US "offense" in MENA). They do not need to as they are not planning to invade anyone nor is anyone about to invade them. If the EU separately plans to tax all EU countries to get the stipulated 4%, more countries will leave the EU.

In reply to by Jackprong

MusicIsYou Sun, 07/29/2018 - 22:09 Permalink

Of course it has to appear Europe is working with the U.S, they can not have Americans knowing the U.S is on it's own. If Europe was actually working with the U.S they wouldn't be going to move auto operations out of the U.S.

opport.knocks Sun, 07/29/2018 - 22:27 Permalink

LOL - Junker (the Village drunk of the EU) travels to Washington and they agree to more discussions and everyone celebrates. Junker has no more authority to negotiate any European trade deal than I have to set up my own federal reserve bank.

RSDallas Sun, 07/29/2018 - 22:41 Permalink

The only deal that matters is the deal that is cut between parties that have the financial means to fulfill the orders on each side.  Everything else is bull shit.  

MuffDiver69 Sun, 07/29/2018 - 22:44 Permalink

Trump is a businessman. Why would he do something that would destroy our economy and seriously hurt American interests?

The answer.......He wouldn’t. 

Our leftist media is not going to be intellectually honest about the tariff battle. 

It’s another wedge issue for them and their crumpling democratic party.

At the end of the day......Trump will again win and they will go back to wagging their tails between their legs. 

By the time the mid terms roll around, the tariff skirmish will be settled.