The price of gold dropped last week and stock markets continued to rally. One of the driving factors was optimism that the trade war may be close to its end. As a CNBC report put it, “investors opted for riskier assets on hopes of a thaw in a trade dispute between the United States and China.”

But should the markets really be rallying on this trade deal? Is it going to be a great boon to the US economy? Peter Schiff doesn’t think so. He recently appeared on RT to talk it.

Peter said the Trump administration has been talking about all the progress that’s being made with these negotiations for so long that you would think that it has already been built into the market.

“In fact, the market already expects a trade deal – a good trade deal. I think that is a dangerous position for the US because it puts Trump in a position where he really has to deliver. Otherwise, the markets are going to be very disappointed. And so, it’s kind of like he’s lost some of his bargaining edge given that he’s raised expectations so high for a deal. I’m surprised the market even rallies on these rumors anymore. I expect the market to sell off once we get a deal.”

The Chinese central bank has reportedly agreed to disclose when it will buy and sell foreign currency to address the accusation that it is a currency manipulator. Peter said he doesn’t think the Chinese are manipulating its currency down any longer. Although it was at one time, that was to its own detriment. Artificially suppressing the yuan propped up the dollar.

“That enabled Americans to live beyond their means, to buy more goods than we can afford, and it made it easier for us to borrow money. So, I think the future for the Chinese currency is higher, and that is going to be a benefit for China. It’s not going to be a benefit for the United States. So, to the extent that we win concessions from China about not suppressing the value of their currency, that does not help America. That helps China.”

China will also reportedly agreed to buy more US products. Peter said that’s not really a great victory either because it was already planning to buy more agricultural products and raw material anyway as its economy grows.

(Photo by kees torn / Wikimedia Commons)

And more fundamentally, how can China really guarantee some level of imports?

“The Chinese government doesn’t dictate to Chinese consumers or Chinese businesses the products they need to buy. The Chinese government can’t force the Chinese to buy American products. So, I don’t see how they can really deliver on any commitment. But to the extent that they buy our products, they were going to buy those products anyway.”

Peter said the real problem is the nature of the products that we’re trading.

“The Chinese buy things that we grow and dig out of the ground, whereas we buy manufactured, finished consumer goods. That is not a good trade relationship.”

Peter said ultimately, the constant news about trade negotiations  – the rumors and speculation –  is much ado about nothing. There is going to be a trade deal because President Trump can’t afford not to have a trade deal. He also can’t afford to leave the tariffs on American consumers.

“Moving the tariffs up from 10% to 25% would be a disaster  … We could already be on the verge of a recession. So, I don’t think the president wants to compound the problems by raising taxes on American consumers. So, he’s in a position where he has to have a deal, no matter what. So, we’re going to have a deal. But I don’t think it’s going to be any more significant than the USMCA, which was simply a rebranding of NAFTA. Nothing was accomplished, but the president claimed it was the greatest deal ever. I think he’s going to make the same boast about this deal, whatever the deal is, even if it accomplishes nothing, Trump is going to claim it’s the greatest deal that’s ever been negotiated in the history of deals.”

Mike Adams joins Owen Shroyer live via Skype to break down an array of news stories including the push to censor nutritional / health information by big tech, medical fascism, 3-D printed gun technology, and how some feminists are calling for abortion to be an option for women after an undetermined amount of time following the birth.


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