Another Trump Flip Flop – Ep. 306

Another Trump Flip Flop – Ep. 306

Trade Deficit Moving Higher as Economy Slows Down
Yesterday we got the release of the October monthly Trade Deficit and we got a trade deficit of $48.7 billion dollars. That was a little bit North of the $47.4 billion expected in the consensus forecast. In fact, the prior month, which was $43.5 billion was revised upwards to $44.9 billion. The larger number did cause the Atlanta Fed to shave down its estimates for Q4 GDP from 3.5% to 3.2%; my guess is that they will be revising it lower. Most of the numbers I have been seeing show the economy slowing down, at least measured by the GDP.
Candidate Trump Promised Lower Trade Deficit While Calling Stock Market "A Bubble"
What's significant about this trade deficit it is the largest trade deficit in 5 years, and it is the biggest trade deficit in the Trump Presidency. If you remember, candidate Trump made the trade deficit a big part of his campaign. He wanted to lower it. He said the trade deficit was too big, and the fact that it had been allowed to get so big; all these countries were taking advantage of us; and he was going to fix it! He was going to "Make America Great Again" in part, by getting rid of these trade deficits. So we were going to start operating at a profit again. He's not talking about trade deficits anymore. Does he want to accept responsibility for the increasing trade deficit, just as he claims credit for the rising stock market?
Trump Now Takes Credit for the Stock Market but not the Trade Deficit
When Trump was a candidate, he never promised, "Vote for me and I'll make the stock market go up!". He said the stock market was a bubble. Part of the problem was that the stock market was the only thing going up. The economy was actually getting worse, despite the fact that we had a stock market bubble. So a higher stock market was not part of his stump speech, yet that's all he talks about now is how high the stock market is.
Trade Deficit is Not Shrinking
What was part of his stump speech was shrinking the trade deficit. Well the trade deficit is not shrinking. It's growing! In fact, I believe that the trade deficit is going to end up hitting an all-time record high during the Trump Presidency. So that will be a complete failure. He campaigned on a lower deficit and we're going to get a much bigger deficit.
Dollar Down
And of course, the trade deficit is growing even as the dollar is down. The dollar has fallen by about 8 or 9% this year. Now, most economists tell you that if the dollar goes down, that will be good for trade, right? It will be good for our exports, we will import less - none of that happened. What actually happens when the dollar goes down, it simply makes our imports more expensive. So our trade deficit goes up. It's not like we can just buy domestically produced goods instead of foreign-produced goods because we don't produce the goods. We have to import them and we just have to pay more to do it, and the trade deficit goes higher.
Bush All Over Again
And since I believe the dollar is headed a lot lower during the Trump Presidency, the trade deficit is headed a lot higher. That's exactly what happened under Bush. The dollar hit an all-time record low under George W. Bush, and the trade deficit hit an all-time record high. And since I think the dollar is going to take out the lows it established under Bush, the trade deficit is going to take out the highs.



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Jaksot(1081)

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SchiffRadio Podcast Episode 7

SchiffRadio Podcast Episode 7

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SchiffRadio Podcast Episode 6

SchiffRadio Podcast Episode 6

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SchiffRadio Podcast Episode 5

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SchiffRadio Podcast Episode 4

SchiffRadio Podcast Episode 4

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SchiffRadio Podcast Episode 3

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SchiffRadio Podcast Episode 2

SchiffRadio Podcast Episode 2

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Schiff Radio Podcast Episode 1

Schiff Radio Podcast Episode 1

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