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Conventional Wisdom On Tariffs Shattered: Import Prices Decline, Year Over Year.

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posted on Jun, 17 2019 @ 11:17 AM
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a reply to: mikell

I don't understand how this happens? unless you keep hitting reply? once is enough.




posted on Jun, 17 2019 @ 11:58 AM
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This is the type of analysis that doesnt account for tariff prices.

Perhaps you had missed that in the article.


The Chinese currency CNYUSD-0.01% has declined in value relative to the dollar



The cost of fuel imports sank 1% last month, 



Export prices dipped in May and have fallen almost 1% in the past year.



The prices American exporters fetch for goods sold in China, meanwhile, have declined even more steeply. They sank 1.4% in May and are down 4.3% in the past year.


For God sakes man read your own numbers. This is a net loss.



posted on Jun, 17 2019 @ 12:01 PM
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originally posted by: AugustusMasonicus

originally posted by: Dfairlite
Consumer debt is high because interest rates are still extremely low. I rarely carry a balance, but over the last year I have because it's a zero interest card (I have never seen more zero interest offers for long periods of time, 20+ months, in my life). I have the cash to pay it off, but I'll use other people's money when it's free over using my own. When borrowing is cheap, people do it more.


Same. I recently redid my kitchen, I had the money set aside but between what I got at Home Depot and the appliance company I barely laid out any cash. The two of them gave me an interest free loan for two years so I could use my money for more profitable investments.


The problem being most people do not invest their money and use low interest in that way. Which then devalues the investments when defaults roll in



posted on Jun, 17 2019 @ 12:48 PM
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a reply to: luthier


Sucks to be them. This isn't Rocket Science 101.



posted on Jun, 17 2019 @ 12:50 PM
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a reply to: luthier




This is the type of analysis that doesnt account for tariff prices.


I addressed that already, on page one. See here



This is a net loss.


We exported $120B worth of goods in 2018.
We imported $539B worth of goods in 2018.

Some quick maths shows china lost ~9B selling to us, while we lost 5B selling to them (due to declining prices). So the net gain (not loss) for the US is three to four billion. However, this is a skewed way to look at it really. The deficit is the problem.
Do you know what the deficit was in 2018? $419B.
Do you know what it's on track to be this year? $380B.
That's a 10% loss for china.

That deficit is still huge, it's just a transfer of wealth from us to china. But it's the first appreciable decline in the deficit since the financial crisis. Of course, there's no financial crisis right now, it's just our booming economy vs their slowing one.



posted on Jun, 17 2019 @ 02:22 PM
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originally posted by: AugustusMasonicus
a reply to: luthier


Sucks to be them. This isn't Rocket Science 101.


I know but the bad investments effect everyone. Not just them.



posted on Jun, 17 2019 @ 02:29 PM
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originally posted by: Dfairlite
a reply to: luthier




This is the type of analysis that doesnt account for tariff prices.


I addressed that already, on page one. See here



This is a net loss.


We exported $120B worth of goods in 2018.
We imported $539B worth of goods in 2018.

Some quick maths shows china lost ~9B selling to us, while we lost 5B selling to them (due to declining prices). So the net gain (not loss) for the US is three to four billion. However, this is a skewed way to look at it really. The deficit is the problem.
Do you know what the deficit was in 2018? $419B.
Do you know what it's on track to be this year? $380B.
That's a 10% loss for china.

That deficit is still huge, it's just a transfer of wealth from us to china. But it's the first appreciable decline in the deficit since the financial crisis. Of course, there's no financial crisis right now, it's just our booming economy vs their slowing one.


Lol. You have not addressed anything.

China does not need to take care of its citizens and therefore can drastically effect their currency.

5 billion is a net loss to the us economy there big guy. The american economy. Jobs etc...this also does not address the bailouts for farmers 2 billion so far and the national debt under trump which will surpass obama per year...

This is the beginning. The waves in supply lines are showing up already.

By the way a trade deficit indicates a stronger economy is buying cheaper goods for a lesser economy. Your entire premise is off base.

Nothing done unilateral does not have unintended consequences. You will be eating crow in about 9-14 months as the global economy retracts.


And your quick math is pretty far off. Economics is not a linear analysis. For instance the price of oil effects import cost. The other problem being tariffs effect domestic product prices through supply chains...
edit on 17-6-2019 by luthier because: (no reason given)



posted on Jun, 17 2019 @ 02:33 PM
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originally posted by: luthier
I know but the bad investments effect everyone. Not just them.


Which is why I stay away from derivatives.



posted on Jun, 17 2019 @ 02:37 PM
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a reply to: AugustusMasonicus

Sure but your customers or employer may not. I know you are an actual fiscal conservative a rare thing today, but artificially low credit doesnt just effect lazy or poor investors it effects the entire market.



posted on Jun, 17 2019 @ 02:40 PM
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a reply to: luthier


I think you and I have discussed this in the past, I don't like the Fed's easy money policy that has been running for far too long. Low interest credit is just as bad as very high interest credit. There needs to be some sort of reasonable risk/reward and I'm the perfect example, I financed a stupid amount of money because it was free and I had it anyway. They made zero on me.




edit on 17-6-2019 by AugustusMasonicus because: network dude has no beer because Heels took it



posted on Jun, 17 2019 @ 02:43 PM
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I don't blame you I would too if i was ready to redo my kitchen. I just fear the idiots buying jetskis.
edit on 17-6-2019 by luthier because: (no reason given)



posted on Jun, 17 2019 @ 03:56 PM
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a reply to: luthier

We lost 5 billion, but gained 9 billion (in cheaper goods). Math is hard.



By the way a trade deficit indicates a stronger economy is buying cheaper goods for a lesser economy. Your entire premise is off base.


I literally laughed out loud when I read this. Economic literacy in the US is so bad.



Nothing done unilateral does not have unintended consequences. You will be eating crow in about 9-14 months as the global economy retracts.


You guys said this last year too.



And your quick math is pretty far off.


Prove it, I'll wait.



Economics is not a linear analysis.


My math was not a linear analysis.



For instance the price of oil effects import cost.


Yes and all of that gets baked into the price for the end user. Import prices are down. Tariff's are up. Inflation is down. Explain that. You can't because you don't have even a basic understanding of what you're talking about. You've read a few politically slanted, drive by economist articles to sooth your biases and that's good enough for you. It's obvious to anyone who actually understands economics.



posted on Jun, 17 2019 @ 04:13 PM
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a reply to: Dfairlite

Lol it's very easy to explain. The price of shipping, and the known position of the dollar. It was predicted by conservative economists. Perhaps you should actually read the predictions and see how they have come to pass rather than speculation. The dollar was predicted to strengthen duh...consumers aren't spending.....exports are going to be hurt by that. Which will force the fed to lower the rate and start the printing presses running full speed to pay the trump annual debt cycle.

Your math is completely linear. Your own article doesn't claim anything you are. The coat of oil is not based on tariffs to china. It's a necessity because of the global economy slowing down.


By the way...import prices do not offset gdp deficit or slowdown....they control the CPI along with other factors.

You are falling for classic smoke and mirror debt economics. Looks great when you have that billion dollar tax payer loan....looks bad when it comes time to pay the bill..

What is the national deficit under trump per year....that is right 1 trillion. Which we essentially borrow from the people we are tariffing.

Hilarious math. Some may call it ludicrous but only if you care about balance.


edit on 17-6-2019 by luthier because: (no reason given)



posted on Jun, 17 2019 @ 04:13 PM
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www.scmp.com...

seekingalpha.com...

At best, the only way taxing something can reduce cost would probably be for China to devalue its currency

If taxes make the cost of goods go down lets tax everything



posted on Jun, 17 2019 @ 04:15 PM
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originally posted by: toysforadults
www.scmp.com...

seekingalpha.com...

At best, the only way taxing something can reduce cost would probably be for China to devalue its currency

If taxes make the cost of goods go down lets tax everything


Welcome to the new era where trump has converted conservatives to 80's Democrats...



posted on Jun, 17 2019 @ 04:34 PM
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a reply to: luthier



Lol it's very easy to explain.


Oh good, you should have no trouble explaining it then.



The price of shipping, and the known position of the dollar.


Import prices are down because the price of shipping? Or inflation is down because of the price of shipping? Or tariff's are up because of the price of shipping? How does the price of shipping have anything to do with what I asked you? You aren't being very clear.



Perhaps you should actually read the predictions and see how they have come to pass rather than speculation.


They predicted that import prices would drop. LMAO, ok give me those links.



By the way...import prices do not offset gdp deficit or slowdown....they control the CPI along with other factors.


WTF is a gdp deficit? Do you know what gdp stands for? How could one achieve a gdp deficit? Import prices control CPI? No, no they don't. Some of the prices contribute to CPI, but CPI is a measurement, so you've basically said the item you're measuring controls the tape measure.

Your economic ignorance is on display. I'll let you just bow out now and move along. Or if you'd like to stop pretending you have any idea what you're talking about I'd be happy to explain all of it to you.



What is the national deficit under trump per year....that is right 1 trillion.


No, it's 722 billion. Yes, that's awful.



Which we essentially borrow from the people we are tariffing.


1.12 trillion dollars of our 22 trillion dollar national debt is held by china. So we borrow 5 cents of every deficit dollar from china. So no, we aren't essentially borrowing it from the people we are charging tariffs. We are borrowing it from our future generations. Which is messed up, no doubt. But here, you let me know when the democrats in congress propose a balanced budget that cuts spending and I'll hop on board in railing against republicans for not supporting it.



posted on Jun, 17 2019 @ 04:51 PM
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a reply to: Dfairlite

Interesting thread, although only a handful of posters looked at the data seriously.

Yes, import prices have gone down despite the tariff nonsense. A strong dollar? Against the hamstrung pound sterling, sure. Against the Euro? About the same as two years ago. Against the Yuen? Better, maybe 3% over the same time.

But that's neither here nor there. We don't know if the exchange rate has been factored in.

And remember kids, correlation is not causation.

The greatest change is in fuel prices. The price of non-fuel imports is linked to global fuel prices. Global fuel prices go down, non-fuel import prices go down. Global fuel prices go up, non fuel import prices go up.

Now go look up the increasing instability in all global markets, particularly fuel. An instability fed by US trade policy and the dick swinging in the Gulf. That is causation.

Jared and Don and Joe's buddies in Wall Street will make a profit no matter what happens in the markets. The people who will pay the price when the bubble bursts are us.


edit on 17-6-2019 by Whodathunkdatcheese because: (no reason given)



posted on Jun, 17 2019 @ 05:07 PM
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a reply to: Dfairlite

Lol. Let me real slow since maybe that is a problem for you.

Fuel prices are lower. This has a way of not only effecting import price but effecting the cost directly of the product through shipping.

The dollar was predicted to rise due to lack of consumer spending. Totally predicted. For instance look at the tax foundation predictions. Spot on so far.

Trump is adding 1 trillion per year. I think you realize that is what I am saying. Perhaps you haven't seen the list of proposed and executed tariffs and the countries they contain from India to Canada. I know it's hard to read data.

A decline or deficit in GDP is a common term in economics. I guess that makes me ignorant?

The deficit is in us exports and through supply chain increases american companies have to eat.

The CPI is used to (wrongly) guage inflation. I suppose if you just learned the term you may be confused how imports keep the CPI low. As I said they are part of keeping the CPI low. But I get it it's easier to make strawmen.

Trump is adding (creating an annual deficit which I clearly state) of 1 trillion. Probably more this year. Record deficits. Literal record deficit for non economic downturn....

We are borrowing from all over the world, printing money, and selling bonds....

Its smoke and mirrors but you go ahead and jump on the train it will be good for another few months.



posted on Jun, 17 2019 @ 05:24 PM
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a reply to: Whodathunkdatcheese

While fuel prices can certainly factor into end user prices their impact is negligible. Especially when you consider the average daily price of fuel in 2018 vs 2017. I'll include this year too, since a decent part of the data is from 2019.

Average daily closing price for crude:
2017: 50.84
2018: 64.90
2019: 57.53

So not only is oil more expensive today than it was in 2017 (to the tune of 13%) but a decent chunk of 2018 was far above the 2017 average.

For comparison: oil prices are down 11% in 2019 alone. Our tariff's are 25% on 274 billion dollars worth of goods, and 10% on 9 billion. Our cost of goods imported dropped 1.5%.

Compare that to 2018:
We saw an increase in oil of 27.5%. We saw tariffs enacted throughout the year (as stated above). Yet our cost of non-fuels imported for 2018 only increased 1.8%

To make it more clear: a 27.5% increase in oil prices, plus part of the year being tariffed, only resulted in a 1.8% increase in cost of goods in 2017-2018.
BUT
an 11% decrease in fuel cost not only counteracted the increased tariff's throughout the entirety of the period, but also dropped prices by 1.5% in 2018-2019??

That's a very poor correlation and to make it into a causation is really a stretch.
edit on 17-6-2019 by Dfairlite because: (no reason given)



posted on Jun, 17 2019 @ 05:39 PM
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a reply to: Dfairlite

Omg. Fuel prices effwct the current market. They are impacted by the last price not from 2 years ago. What is this amateur hour?

Your entire post makes no sense in economic terms. Comparing apples to tires is a nice trick but doesn't fool people who watch the market.

I have a 90 percent return hedging on economic downturn in my portfolio I control. From crypto to gold the economists know what is coming and so does the market.

All time debt for business, consumers and the nation. Smoke and mirrors until you run out of smoke and the mirrors are broken from pissed off farmers.



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