Time for an editorial about global markets and how they operate: most people are unaware that the USA is the lynchpin of the world’s economies. We earned this via WWII. And then doubled down with winning the Cold War. But there was this nasty hitch: towards the end of the Vietnam War, the US began ‘strengthening allies’ due to losing that war via allowing Germany and Japan, our former dire foes, to export one way trade with the US. The chief items: CARS. Yes, vehicles. Since then, including our oil imports, the US began running worse and worse trade deficits.
Now…this week we are seeing a global panic attack due to Trump bringing home jobs and imposing more and more trade restrictions. I knew this would happen because everyone on earth depended on the US consumers to keep their own economies floating. The one thing nearly never mentioned in elections except to lie about it, was our endless trade deficits. This cannot go on forever and it is much better to kill it when we are strong, not when we are bankrupt.
So Trump twisted arms and began the process of bringing home the jobs, the industries, the businesses. This is literal life and death. I fully support this. This caused the Asian and EU stock exchanges to go nuts. Well, they are all VAMPIRES. I pointed out for years and years that the Chinese are still ‘communist’ who have a capitalist half of the country (run by someone who is now retired but who lived with me for a while) and they export heavily to the US and now that is breaking up due to import fees.
I warned the State Department under Bush Sr. that the Chinese openly talked about destroying the US by running a Japanese/German style trade surplus with us. No one listens to me about these warnings. The plan is to destroy us.
Well…here we are, someone is stopping this train wreck and of course, the mess this creates will be blamed on him. But there is only one way to stop this: tariffs and barriers! Duh! Look at former manufacturing giant, England. It is dead in the water. It subsists on foreign banking schemes. It manufactures nearly nothing now! They don’t even have a wool market anymore! Isn’t that utterly insane?
In less than 100 years, England went from world economic power #1 to basket case, near zero outside of banking. I am indifferent from stocks going up or down, they do this all the time. No ups and no downs last forever…unless one destroys the fundamental basis of the economy and the money systems! That is the danger. Turning back from this is very hard.
Smart people will buy up the panic shares of the ‘good investments’. There will be fewer players in the market due to a host of them running off to play the Tulip Bubble game in fake, computer generated ‘money’ that has zero intrinsic value and zero backing of any legal systems. That little scam sucked down many people who would have played in the real stock market and perhaps these young men would have learned how to play the Wall Street game.
It is a game, one that pays well if one is careful and astute. ‘Get rich quick’ whizzes almost always go bankrupt. This is because they are emotional. Their goal is to get rich, quick, not make smart investments that will pay off over time in a steady, good fashion. This is why we have hysterical markets! A lot of the young players were lured into the Bitcoin scam because it looked ridiculously easy and it was totally anti-productive, that is, it ate up energy like a fiend and produced data! Nothing else, just a coded script of complexity which represented ‘money’ due to players agreeing to put up real money for the fake money whenever players wanted to leave the gambling table.
As per always with these sorts of scams, the players who cashed out would then run back into the casino to get even richer and all will end up with nothing in the end. This blowing up of investment energy is yet another thing killing the real market. But then, fake stuff always attracts fools! They can’t help themselves.
When buying stocks, a real investor looks into the prospectus, they check out the news about the business, they look at statistics and graphs to see what is going on and then make a judgement about how much to invest or to sell. Stupid people look at the ticker and then have an emotional eruption.
My ex used to work on the floor of the exchange on Wall Street and watched this hysteria, the elation and the suicidal freak outs. I used to drink at the local Irish pub on Wall Street way way back in the early 70’s. The guys there who were floor staff would joke around. One can learn more about stocks from getting drunk…was it the Irish Rose? My memory is slipping…the traders would love talking about what happened the day before getting smashed.
With computers and the internet this community pretty much vanished. Way back when, it was face to face and very sociable. ‘You want to play?’ ‘Sure, deal me in!’ Rumors were flushed down the toilet there, new ones would show up like bums after the cops kick them off the sidewalks…Wall Street way back then was a rather sleazy place, actually. Fond memories, now it is all huge towers with massive computers and tech staff.
And no one ever learns any lessons! And I know why after drinking with very old men who were traders who were there when the Great Crash of 1929 happened! They all said, ‘No one listens to us.’ I said, ‘They think they will be cursed if they do!’ and the guys would laugh. Fond memories of them. Market crashes of the Nixon/Ford/Carter years didn’t faze the old gang. They laughed at the despair of the young traders.
Yes, fond memories. ‘Know when to hold and when to fold,’ one old Great Crash survivor. He knew when to hold when everyone was in a panic when the biggest panic of them all hit. He also said, ‘What happens overseas happens here.’ Still very true. My ancestor’s suicide due to markets: Panic of 1884 –
The Panic of 1884 was a panic during the Depression of 1882-85. Gold reserves of Europe were depleted and the New York City national banks, with tacit approval of the United States Treasury Department, halted investments in the rest of the United States and called in outstanding loans. A larger crisis was averted when New York Clearing House bailed out banks in risk of failure. Nevertheless, the investment firm Grant & Ward, Marine Bank of New York, and Penn Bank of Pittsburgh along with more than 10,000 small firms failed.
Yes, the Penn Bank of Pittsburgh…shot his wife, too. That is how one behaves stupidly in a market squeeze. My grandmother was a small child, went to a Shaker farm raised by elderly aunties and become one of the world’s earliest women to get a science degree from a men’s university where she met my grandfather. And thus comes out of destruction, a rebirth and something better!