Author name: moderat ereport

Erik Loomis What drives Trump’s politics is nostalgia for the age of coal, when dirty fuel and no environmental regulations created his version of a great America. The post The Rise, Reign, and Fall of American Coal appeared first on The Nation.

At min 0:29 of this clip from FoxBusiness: I suspect Antoni views these predictions as “suspicious” only because they run counter to his priors. Remember this is the guy who looked at the import price index, and concluded tariffs hadn’t raised prices facing American households and firms, forgetting that the import price index doesn’t include tariffs… In any event, Antoni takes issue with the 55% tariff pass through to consumers, saying that none of the apocalyptic price increases had yet shown up. I would say (as a person who actually took a PhD field exam in international economics) that there is actually substantial evidence of price increases to consumers, especially once one takes into account the timing of actually implemented tariffs (remember all those “pauses”), and the time taken for pass through to occur. Regarding actual effective tariff rates, vs. Trump-declared tariff rates, we can show the disjuncture: Figure 1: Average effective tariff rate (blue), and average declared tariff rate (tan), both in %. Source: OECD Interim Economic Outlook, Paweł Skrzypczyński. The “effective” tariff rate shown above is calculated by dividing tariff revenue by imports. The relevant effective tariff rate only took off to around May, to 8.3%, while the Trump-declared tariff rate was much higher, much earlier. I think we can expect to see much higher effects once price data is reported again.      

We’re officially one month away from the 2025 World Economic Conference — the most anticipated economic event of the year! This year’s conference promises to be unlike any before. With markets in flux, debt spiraling, and geopolitical tensions rising, understanding the global economy has never been more critical. At the WEC, you’ll gain exclusive insight into Martin Armstrong’s Economic Confidence Model (ECM) — the same model that has accurately forecasted turning points for decades. Why Attend? Exclusive economic forecasts from Martin Armstrong Deep insight into the ECM, the world’s most accurate long-term cyclical model Forecasts on capital flows, inflation, debt, and geopolitics shaping 2025 and beyond Network with attendees from over 30 countries, including investors, policymakers, and entrepreneurs “You don’t have to agree with me — just follow the model. It’s never been wrong.” – Martin Armstrong Seats are filling fast, and this is your opportunity to hear directly from the man whose models have guided governments, institutions, and investors through decades of global change. Reserve your spot today — visit the Events page to secure your ticket before it’s too late. In-person tickets are extremely limited and likely to sell out. And don’t miss the next Marty and Mike Podcast dropping this Friday where Martin and Mike dive into the latest market shifts and what to expect heading into the conference. The World According to Martin Armstrong is also available on Amazon for those interested in reviewing the major predictions on the Economic Confidence Model and the full story behind 20 predictions that came to fruition: Dow 40,000 (Predicted: Dec 2019 / Verified: May 2024) Trump’s 2016 win (Predicted: Aug 2015) Brexit (Predicted: 2015) The COVID crash (ECM turning point: Feb 21, 2020) The rise of populism, crypto, and civil unrest The collapse of trust in government and media The war cycle peaking into 2024-2025 Sovereign debt crisis beginning 2023 The downfall of woke corporations The failure of negative interest rates The countdown has begun — the world is changing, and the insights you gain at the 2025 WEC could make all the difference. We hope to see you there!

Leer en Español From currency peg to currency band: Until 2005, China’s renminbi was pegged at CNY 8.3 per USD. From that moment on the government shifted to a managed float, allowing the currency to move within 2% of a daily rate set by China’s central bank, the PBOC. This change led the renminbi to depreciate by around a quarter over the decade that followed—a consequence of China’s massive trade surplus. Afterwards, from the mid-2010s to 2022, the currency further lost value as investors soured on China’s economy and the PBOC reduced its intervention in the FX market. Over the last two years, however, the currency has been broadly stable, largely as the PBOC has itself set a fairly stable exchange rate in order to limit depreciatory pressures. As a result, the renminbi has recently traded more like a currency that’s de facto pegged in a narrow trading band.  Renminbi internationalization still in the early stages: The Chinese government is making an effort to boost the attractiveness of the renminbi overseas. A decade ago the authorities introduced the cross-border international payment system (CIPS) as an alternative to the U.S.-dominated SWIFT system. Beijing has signed renminbi swap lines with dozens of foreign central banks, and pushed to settle more of its own trade in domestic currency. However, the renminbi still accounts for just 2% of international currency usage, compared to over 50% for the U.S. dollar. Restrictions on the exchange rate—which as mentioned have increased in the last couple of years—plus capital controls and concerns over sudden shifts in policymaking are likely to preclude the CNY from unseating the USD as the world reserve currency any time soon.  Our panelists’ forecasts for the exchange rate: The Consensus of the 50+ panelists we poll is for China’s renminbi to gradually appreciate over the coming years, and to move back below CNY 7.0 per USD by the end of the decade; monetary easing by the Federal Reserve will narrow the interest rate gap between the U.S. and China. However, any moves in the exchange rate are likely to be gradual, given the government’s focus on preserving stability above all else.   Insight from our panelists:  On the short-term outlook for the currency, Goldman Sachs analysts said:  “CNY continues to screen as significantly undervalued, with the degree of undervaluation now comparable again to the period of the China shock in the mid-2000s. While there is always substantial uncertainty around FX fair value metrics, recent economic performance—large export market share gains and a surge in the current account surplus—help corroborate these model estimates.”   On the outlook for renminbi internationalization, EIU analysts said:   “China will promote the use of the renminbi as a reliable international currency, at a time when confidence in the US dollar is eroded by Mr Trump’s policies. The outlook for reniminbi internationalisation is mixed, however. China could commit a greater amount of overseas aid and loans, along with other forms of support (including in supply chains), in exchange for the expansion of the renminbi’s role in global settlement and financing, as well as a reserve currency. Nevertheless, despite the growing percentage of the renminbi in trade settlement, the currency continues to make up less than 2% of global trade invoicing—suggesting limited (albeit growing) uptake in international trade. The renminbi will not emerge as a credible substitute to the US dollar in the medium term.” Our latest analysis:  New Zealand’s central bank slashed interest rates in October.  Germany’s industrial production slumped in August.  The post How will China’s currency fare in the coming years?  appeared first on FocusEconomics.