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Veteran Investor: The Trade War Is A Warm-Up For A Financial Crisis

Mac Slavo
July 11th, 2018
SHTFplan.com
Comments (15)
Read by 2,058 people

According to veteran investor Mark Mobius, there may be a financial crisis coming down the pipes after the United States decided to fire more shots in its trade war with China.  Mobius says the trade war is simply a warm-up for the impending financial crisis.

“There’s no question we’ll see a financial crisis sooner or later because we must remember we’re coming off from a period of cheap money,” said Mobius while in an interview in Singapore, according to Bloomberg. “There’s going to be a real squeeze for many of these companies that depended upon cheap money to keep on going.” The dispute between the U.S. and China will probably worsen too. President Donald Trump is unlikely to suffer a huge blow-back from his tariffs, as their inflationary impact will be matched by rising U.S. wages at a time when unemployment is low, Mobius said.

Mobius also thinks emerging markets will decline yet another 10%, and that may not even be the bottom. The MSCI Emerging Markets Index will likely fall from current levels by year-end, predicted Mobius, who left Franklin Templeton Investments earlier this year to set up Mobius Capital Partners LLP. That would tip the gauge, which has fallen around 16 percent from a peak in late January, into a bear market.

But other expert investors believe we are already in a bear market.  Take Peter Schiff, for example, who thinks the economy is in much worse condition than the talking heads in the mainstream media care to report.

The thinking is – at least when it comes to trade – is that the dollar is going to benefit from a trade war, which I think is wrong. I think it’s just as wrongheaded as the concept that the dollar is going to benefit from larger budget deficits,” Schiff said, according to Seeking Alpha. 

President Donald Trump has levied even more tariffs on Chinese imports in retaliation for China’s retaliation after the US announced its first round of tariffs. A lot of people seem to think this is bullish for the dollar and as a matter of fact, the greenback has surged in recent weeks. But in his latest podcast, Peter Schiff said this is a bunch of nonsense. “The force will not be with us,” is the aptly named podcast in which Schiff discusses the collapse of the United States dollar. –SHTFPlan

Central banks have begun hiking interest rates too in response to the economy. But hikes are a “short-term fix” and they could be counter-productive for countries with high amounts of debt (like the United States), Mobius said, adding that governments need to put their finances in order to restore investor confidence.

Mobius then predicted that there will be a few “winners” in the trade war, but the United States will not be one of them.

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Author: Mac Slavo
Views: Read by 2,058 people
Date: July 11th, 2018
Website: www.SHTFplan.com

Copyright Information: Copyright SHTFplan and Mac Slavo. This content may be freely reproduced in full or in part in digital form with full attribution to the author and a link to www.shtfplan.com. Please contact us for permission to reproduce this content in other media formats.

15 Comments...

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  1. NunyaBidness says:

    “Mobius says the trade war is simply a warm-up for the impending financial crisis.”

    PAT SEE.

  2. Old Guy says:

    The trouble is all the trade deals made since and including NAFTA . Those agreements where lopsided and cost the USA jobs. We import lots more cheap junk products than we export. Let them place big tariffs on American products. They dont buy very much any how. I will gladly pay more for quality made USA products.

  3. southside says:

    This is off topic: Remember when Trump said the caravan of “imigrants” were not going to be admitted ? So do I. Remember that “big,beautiful wall” that was supposed to be built?. So do I.

    • Concerned Citizen says:

      South: Like them all, he told all us sucker clowns what we wanted to hear and I can guarantee you there will NEVER be any damn wall. . . .unfortunately. Plus, let’s be honest, the president doesn’t really have that much genuine power and control at the end of the day…so, yeah.

  4. Khemp says:

    American manufacturing (textiles, heavy equipment, durable goods ) were being “off shored” like crazy for a decade before NAFTA. That would be the 1980s. At that time it was presented as a good thing. “Believe what you want to believe and disregard the rest”. It’s a human thing. Short or selective memory makes it easy.

  5. Bill says:

    The US is holding a much better hand than the Chinese as far as trade is concerned. Even though their middle class is growing and ours is shrinking they need us far more than we need them. Their middle class will not continue to develop if trade is severely reduced, and they know it. The US can be self-supporting in industry, agriculture, and technological innovation (in fact almost all complex technologies in use in Asia are stolen or copied); the Chinese cannot. When someone blames WTO or NAFTA or other international trade cooperatives they are only seeing individual pieces, not the bigger picture. These are only tools.
    The reason why the US is in its current position is due to a collusion of big business and big gov’t. Pres. DT says the US trade negotiators where just stupid, no they weren’t, they were just following orders. TPTB do not act on the behalf of others, they are essentially parasitic and exist for themselves with their own agenda. They see all resources as disposable whether it be natural, economic, technical, or human. After all, they don’t develop them, just use and exploit them. Deals made on the scale of trillions of dollars cannot be accidental or made out of stupidity. Deals are made to benefit TPTB.
    The most precious resource a nation can possess besides its soil and groundwater is a large modern efficient industrial/manufacturing base. The US is blessed with magnificent natural resources and multitudes of brilliant and capable people, how do we keep damaging ourselves. We have a hollowed out industrial base, massive and crippling trade deficits, and a shortage of skilled people due to the policies of TPTB. All this could be quickly reversed if the Pres. continues to do the right things.
    The gov’t does everything it shouldn’t do and doesn’t what it should do. The result is always wasted billions of dollars, huge fiscal deficits, lower standards of living, global ill will, social discord, failing institutions, lower quality of life, loss of rights, inhibiting human progress, and on and on.
    Even though the US has the power, resources, and potential I am not optimistic; a new trade deal may be only cosmetic or short-lived. And the US does have one great vulnerability, China and the rest of ASIA hold trillions in US treasuries, if they are dumped this could wreck the dollar.

    • rellik says:

      Bill,
      I agree with most of your post, however,
      “China and the rest of ASIA hold trillions in US treasuries, if they are dumped this could wreck the dollar.”
      Is not necessarily correct.
      Most our debt is held by Americans.
      While China and Japan hold most of the foreign debt the only way they can “dump” it is to sell it on the secondary market. I’d be happy to buy their Tbonds at 10 cents on the dollar.

    • Concerned Citizen says:

      Bill: You are so correct!! Shitty, crooked Gov’t is so in bed with the biggest crooks of them all – Corporate America and between the 2, they have ruined life for us average people – it is that simple. And why do you think they have conspired so hard to keep wages so awfully low and all of the prices of everything else continue to go up, up and away.
      Guys, our swell Gov’t solid our asses out once again. It is painfully obvious, Gov’t is NOT to be trusted, not at any damn level.

  6. Buy American.

    Trump is doing the right thing here.

    Trump haters keep pointing out what he hasn’t done while ignoring what he has done. I’m still waiting for the wall, too. But, even if Trump never intended to build one, he got himself elected; which has energized the silent majority of white middle class Americans. That’s why the critics bash him. He’s a cheer-leader for our cause. And the left Communist types hate him and anyone supporting him.

    _

  7. the blame-e says:

    A trade war plays right into the hands of the Globalist Elites and NWO types.

    Trade Wars only hurt those counties engaged in trade. Without countries, and without borders, there can be no trade wars.

    In the NWO free, fair, and equitable will mean nothing.

    Historically nobody wins in a trade war. Everybody loses. That is why we have not had one in almost 90-years.

    Today, the stakes are even higher. A trade war will almost certainly result in a global financial crisis (if not a full-on systemic collapse), where only the Globalists will be left to pick-up the pieces.

  8. The comments about “stealing” technology are true, but this has always been true.

    This is how technology grows and is improved upon. Countries have always copied other countries technology…including the USA.

    The greatest invention of the Industrial Age was the steam engine. It was invented in England to pump water out of the coal mines. The US copied (or stole) that tech and improved upon it to create steam powered locomotives that opened up the country to westward expansion and trade.

  9. Yahooie says:

    Time to go back to the farm.

    In the Great Depression, rural people never had much to lose but could take care of themselves just fine. They didn’t mind letting Wall Street eat itself. Urban dwellers did not fare well.

    The take-away message to me is be self reliant as rural people have always been. Let Wall Street eat itself once again.

  10. runna muck says:

    yeha and sooner or latter a pelican is going to come flying out of my ass,that will be 1000 dollars for the advice that saved your life

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