As you know, I am not afraid to be controversial. But today I am going to stick to the facts as I discuss Chinese currency manipulation, which is making everyone crabby, whether they are passing laws in Congress, trading stock on Wall Street, or selling Emperor Xi Jinping censorship tools from Silicon Valley.
Here is the first fact that we need to remember when we are talking about the trade war with China: Donald trump is the smartest person ever to be in the White House. This is because Trump went to the University of Pennsylvania, which is an Ivy League college in Philadelphia, and is an expert linguist due to the fact that two of his three wives came from foreign countries. Compare that to Abraham Lincoln, who went to some provisionally accredited state college; and Ulysses S. Grant, who was usually too drunk to even speak English. Also, Donald Trump is a successful real estate investor in New York City. This is a much bigger accomplishment than being a farmer, which is what George Washington and Thomas Jefferson did for a living. He was also a way better boss than them due to the fact that he actually paid his workers. Like I said, greatest genius in the history of politics.
The source of Donald Trump’s wizardyy is its simplicity. Other presidents have been dummies because they waste lots of time learning about the issues and then developing policies based on expert advice. Trump is an alpha who just decides that every other president was a failure, and does the opposite of them just to see if it works.
For example, he said about NAFTA: “NAFTA’s been very, very bad for our country. It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes, or we are going to get rid of Nafta for once and for all. Cannot continue like this, believe me.”
And whenever he talks to black people, he loves to say stuff like: “The inner cities of our country have been run by the Democratic Party for more than 50 years. Their policies have produced only poverty, joblessness, failing schools and broken homes…. At what point do we say enough… what the hell do you have to lose?”
And to top it off, every few months Trump takes a boys weekend with Kim Jung Un.
This is a golden example of how he just loves to do the exact opposite of Barack O’Bama and George W. Bush did and hope everything goes okay. Monday’s choice to label China a currency manipulator is the next step in this genius policy making process. It is basically him reversing 20+ years of U.S. trade policy due to the fact that the USA has been getting butt-slammed by China for that entire time period of time. Like Trump said, “What the hell do you have to lose?” Well, if you are betting on PredictIt, the answer is a lot. That’s because even though Secretary of the Treasury Steve Mnuchin has dropped the hammer on China for currency manipulation, the rules of this market require him to submit a report to Congress for the market to resolve YES.
This is where things get dicey due to the fact that the report in question isn’t supposed to be delivered until October 15. That gives Trump a solid two months to change his mind, which is basically an eternity for someone who has literally sent 43,000 tweets. PredictIt trader @pjhurray pointed out the danger here:
only thing trump cares about is $. market will recover-ish.
he's gonna "get on the phone" with china and "demand" they stop stuff.
he's gonna set a "deadline".
at the "last minute" he's going to "make a deal" (back off on tariffs), in exchange for some nonsense.
— pjhurray (@pjhurray) August 6, 2019
That is exactly what is happening right now. China’s central bank already wussed-out and announced the it was dropping the yuan’s exchange rate from 7 per dollar to 6.9, probably because Emperor Xi Jinping ran out of tampons due to Trump’s tariffs on Chinese paper products. I personally think that this is the type of massive victory that President Trump will be very proud to take credit for so that he can go back to live tweeting Chris Cuomo’s show on CNN every night. Again, my opinion is supported by the facts. Donald Trump backed-off of North Korea as soon as Kim Jung Un signed a document that said that said, “The DPRK [North Korea] commits to work toward complete denuclearization of the Korean Peninsula” without any binding terms. He also backed-off of Congress for not funding his border wall when he gave a bogus order to use the military to build it for him. This is the long way of saying that with China adjusting its exchange rate by 0.1 yuan, the politics here are absolutely perfect for Trump to change his mind, throw a total banger to celebrate victory, and never bother to submit a report to Congress.
However, I am an open book so therefore I will leave you with this: the China currency market is an absolute bear trap. That’s because there are still more loose ends in this market than there were in the Lost finale. They are:
(1) Is there some other random Treasury Report that Mnuchin owes Congress and could contain a nastygram about Chinese currency manipulation? As far I can tell, no. I searched through all public laws passed from 2013-present and there are none that require boring reports that haven’t already been delivered to Congress. But who knows what Maxine Waters and Chuck Grassley are up to these days.
(2) Is Trump’s move even legal? I dunno. Some of the boys are saying it isn’t and that China has not met the legal criteria for sanctions. One of them is my best friend and personal lawyer, Zoltar.
(3) Maybe Trump just feels like being a boss and is going to keep these sanctions because that would be an alpha move.
Those are four questions that are hard to answer. I don’t like betting on anything that has more than two. If I was going to put my cash down — and I might — I would take NO. But I dunno. I am feeling like betting on this one might be calling in the old napalm strike a little too close. It could be an explosion of free money, or you could get your face absolutely scorched off. I need to rip a few more Addies to figure out where I fall on this but tbh, I would not play this one unless you have some titanium stones hanging between your legs.