A peek at trump’s to-do list

Tuesday, 8 January 2019
Melbourne, Australia
By Bernd Struben

  • Almost down to the wire
  • In the mailbag
  • ‘Boris Johnson Mocks Doom Sayers Over No-Deal Brexit’

Do you keep a to-do list?

I’ve always found them handy. I keep one for work. One for play. And one for domestic stuff.

And I’m old school about it. Strictly paper and pen. Somehow deleting an accomplished task from a digital list isn’t nearly as satisfying as crossing it out in a notebook.

As the leader of the free world, you have to imagine that Donald Trump keeps his own collection of to-do lists.

His daily list would include items like: check Twitter; denounce socialist Democrats; fume over lack of border wall funding.

But it’s three items on his international to-do list I want to bring to your attention today. And how these could impact stock markets in the months ahead.

As the Commander in Chief, Trump is responsible for US security. This gives him a lot more room to manoeuvre on the international stage without Congressional oversight than he has domestically.

I imagine if we were able to peek through the window of the Oval Office, the top three items on Trump’s international to-do list would be these:

  1. Sign off on great new trade deal with China.
  2. Get Kim Jong-un moving on denuclearising North Korea. (Nobel Peace Prize, here I come!)
  3. Forge new treaties with Vladimir Putin. Bring Russia back into the fold.

Now let’s look at these in reverse order…right after we look at the markets.

Markets

Overnight, the Dow Jones Industrial Average closed up 98.19 points, or 0.42%.

The S&P 500 gained 17.75 points, or 0.70%.

In Europe, the Euro Stoxx 50 index finished down 8.21 points, or 0.27%. Meanwhile, the FTSE 100 lost 0.39%, and Germany’s DAX closed down 19.88 points, or 0.18%.

In Asian markets, Japan’s Nikkei 225 is up 213.83 points, or 1.07%. China’s CSI 300 is down 0.12%.

In Australia, the S&P/ASX 200 is up 35.61 points, or 0.63%.

On the commodities markets, West Texas Intermediate crude oil is US$48.79 per barrel. Brent crude is US$57.33 per barrel.

Turning to gold, the yellow metal is trading for US$1,288.94 (AU$1,803.72) per troy ounce. Silver is US$15.66 (AU$21.91) per troy ounce.

One bitcoin is worth US$3,990.86.

The Aussie dollar is worth 71.46 US cents.

Almost down to the wire

Getting back to item three on Trump’s to-do list…

Putin, as you’ve likely read, has been doing some sabre rattling. That’s assuming you count announcing the rising threat of nuclear Armageddon as sabre rattling.

Putin has also promised to match the US in any arms build-up. And he’s moving more military personnel and hardware to Russia’s western border. Ukraine, Poland, and most of Europe are rightfully losing sleep over these moves.

But here’s the thing.

Russia’s economy is just a tiny fraction of the US’. Indeed, Russia’s GDP is less than Australia’s. Russia simply can’t compete with the US in a new arms race. This is largely what bankrupted the much larger USSR back in the 1980s.

Trump and Putin both know this. And I believe the sabre rattling we’re hearing is all part of a neatly choreographed script. One the two men have agreed on in handwritten and hand-delivered letters.

Why?

Because for the world to accept and even cheer Trump’s overtures to Putin — and to welcome Russia as an equal partner — people first need to be properly frightened. Hence the military build-up and talk of nuclear holocaust.

I expect we’ll see a few feints in this direction in 2019, just to test the waters. But the real moves — the new treaties and lifting of sanctions — probably won’t eventuate until 2020. That way Trump’s success will be fresh in US voters’ minds as they head back to the polling booths in November.

That’s item three. Item two, believe it or not, could be a lot simpler. Kim Jong-un has already halted nuclear testing. And his relationship with Trump remains warm.

But for the US to be able to properly pressure North Korea into full, verifiable denuclearisation, they need China’s unreserved backing. With China’s continued support of rigid sanctions alongside guarantees to support Kim’s regime, Kim is far more likely to capitulate.

I believe we’ll see significant moves in this direction by mid-2019.

This brings us to item one. Sign off on great new trade deal with China.

Regular readers will know I’ve been forecasting a major breakthrough on the trade dispute is imminent since its early days.

Here, for example, is what I wrote to you in Port Phillip Insider on 29 August:

Trump’s a show man. He’s got the whole world watching how the trade dispute between the world’s two largest economies works out. And he’s going to take this one down to the wire.

When the show finally ends I don’t expect a violent collision. As with Mexico and likely soon Canada, I remain confident Trump wants to walk away with a new — and better — trade arrangement with China.

And with China’s economy facing plenty of headwinds already without the damaging US tariffs, I imagine Xi will be only too happy to accept a face-saving deal.

While there’s plenty of mainstream media driven angst about what will happen if the trade talks fall through — which, of course, they could — the factors pushing both sides towards reaching a deal remain in play.

China’s economy, for example, continues to struggle.

From Bloomberg:

On Friday, China’s central bank announced another cut to the amount of cash lenders must hold as reserves in a move to release a net 800 billion yuan ($117 billion) of liquidity and offset a funding squeeze ahead of the Chinese New Year. After the move, UBS Group AG said it expects additional easing as growth slows, including tax cuts and increased fiscal spending.’

Trump himself is signalling confidence that the end is in sight. On Friday he said, ‘I think we will make a deal with China. I really think they want to. I think they sort of have to.’

On Monday, US Commerce Secretary Wilbur Ross echoed the president’s positive outlook. In an interview with CNBC Ross stated, ‘I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues.

As for the Chinese side, Reuters quotes China’s Foreign Ministry spokesman Lu Kang as saying:

From the beginning we have believed that China-US trade friction is not a positive situation for either country or the world economy. China has the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions.

Today, as you may know, marks the second day of the two-day mid-level trade negotiations underway in Beijing. They’re the first new negotiations since Trump and Xi met over dinner in Buenos Aires. And while the meetings were only intended for less senior officials, Reuters reports that:

Chinese Vice Premier Liu He, who has led trade negotiations with the US and is a top economic adviser to Xi, made an unexpected appearance at the meetings on Monday, according to a person familiar with the discussions.’

Don’t discount the importance of that unexpected appearance. It’s not like Liu He just happened to be in the neighbourhood and had some time to kill.

Now the trade war won’t end with the meetings today. Nor will it end at the World Economic Forum in Davos, Switzerland on 22–25 January. That’s when Trump or a senior US official are likely to meet with Chinese Vice President Wang Qishan on the sidelines.

But end it will. And that could happen as soon as 1 March, when the US is meant to press ahead with higher tariffs that were suspended by Trump in December.

If it plays out as I suspect, that will be good news for Australian and global markets alike.

Not to mention good news for analyst Harje Ronngard’s favourite small-cap tech stock. (Details here.)

Thoughts on Trump’s to-do list? Please send those and any other comments or questions you have to letters@portphillipinsider.com.au.

Speaking of letters…

In the mailbag

Today we’ll cover off a few more responses to the question I asked you last week. (Some have been edited for length or readability.)

That question was: Do you believe Australia should follow Canada’s lead and fully legalise, regulate and tax marijuana?

As I mentioned yesterday, we received a lot of responses. Some 40 emails, with roughly 80% of readers supporting full legalisation.

The first one today comes from reader Nick:

I believe that cannabis should be legalised so that the whole nation can benefit from the tax revenue instead of criminals amassing wealth. People will use cannabis regardless of the legality. It will also regulate who can purchase cannabis. 18+ just like alcohol. Alcohol abuse will probably reduce along with opiate use. I think the penalties for illegally distributed cannabis in the black market should also increase exponentially from current penalties. I believe that tobacco and alcohol are more damaging in our society.

Tax benefits aside, Nick makes a good point. I’ve heard stories from friends with teenage kids that say just that. Getting alcohol is more difficult for them than buying cannabis (or other drugs) from their neighbourhood dealer.

Reader Jen also gives an enthusiastic go-ahead for full legalisation:

I believe that those who suffer various health ailments will find respite and even cures as the growing number of official studies are now showing. Just the fact that we can now run OFFICIAL studies is a huge step in the right direction. Unlike prescription medication, the side effects of marijuana are minimal and will not damage other parts of the body whilst trying to fix one issue. This is one of the biggest breakthroughs towards ‘BIG PHARMA’ losing its monopolistic and cruelly ineffective hold on everyone in the second and first worlds.

It’s also great that users will be able to relax (even more, lol) with a substance that doesn’t break down all your organs; that doesn’t create a heightened sense of aggression, and that doesn’t give you a shocking hangover the next day. Where marijuana is commonly used there is less violence, especially domestic, and users tend to be more in charge of processing their feelings and handling major events such as divorce, grief etc.

It’s been a long time coming. Just like same-sex marriage, racism and sexism – we shouldn’t have to think twice.’

And here’s Shawn’s matter of fact take:

I think all use of marijuana should be legalised in Australia.

Anyone who wants it for recreational use can get it now anyway, and nobody cares, so let’s stop the pretence and decriminalise it.’

Reader Lloyd disagrees…rather strongly:

I can’t say this powerfully enough—

I’m a mental health nurse, NO NO NO NO NO NO NO NO.

It won’t lessen its use.

It DOES lead to further experimentation.

Those that do choose to use will always still – legal or not.

STOP DOPING PEOPLE.

Let the True, Natural, Beautiful inherently Unique Magnificence of each person shine Shine SHINE.

When we witness the pure, REAL, inner person express themselves humbly, wonderfully, graciously – and I can’t say this powerfully enough either- sanely and clearly and spontaneously – at whatever point of growth each individual is at – awesomeness, wonderfulness emerges RADIATING- inspiring, elevating, BLOSSOMING.

We get to be with the REAL person, and ALL of their idiosyncrasies, issues can be realistically celebrated, or worked through as needed. NOT its delusional ego.

Think upon your childhood and beyond – children, the playground, socialising at school, developing, developing, unfolding from WITHIN ( not ‘induced’), think dance, singing!

Shine ON.

Lloyd is almost certainly correct in stating that legalising cannabis won’t lessen its use, though it may make it harder for kids to acquire. And she paints a brilliant mental health picture of people who choose to live a clean life free of alcohol, tobacco, cannabis and other drugs.

Having touched on mental health here, we’ll finish the day with this mail from Kate regarding marijuana’s medicinal potential to treat certain physical ailments.

Yes! Yes! and Yes! Legalise it! Regulate it! and Tax it!  People have been using it for pain relief for yonks, and if my Dad was still alive, I would be getting it for him.

He was a double amputee and suffered terribly with phantom and other pains before he died 20 years ago. Then, I didn’t know what I know now! How I wish I did know

The benefits that he would have received if I had followed my “hippie daughter’s” suggestions for her beloved Pop!

As well as the above – Big Pharma needs a big “wake up call” and a kick in the pants!

Short on time…and well beyond my word count…we’ll leave it there for today.

Regardless of how you feel about the wave of marijuana legalisation sweeping across the world, it’s already a multibillion-dollar market. One that looks set to grow exponentially over the coming decade.

This has already seen investors in the right pot stocks double their investment…or more. On the flip side, investors in ‘the wrong’ pot stocks have lost much of their money just as quickly.

Now not all of our readers are comfortable investing in companies producing and selling medicinal or recreational cannabis. That decision is, of course, entirely yours.

But if you’re thinking about putting some money into the booming cannabis market, I wouldn’t invest a single dollar until you read Sam Volkering’s ‘Black Book of Cannabis’.

You can find all the details as well as how you can get your hands on a copy here.

Finally, here’s the latest on the growing Brexit farce from The Australian Tribune:

‘Boris Johnson Mocks Doom Sayers Over No-Deal Brexit’

The Deep Sate, or “establishment figures”, as former British foreign minister Boris Johnson calls them, has run a lengthy and effective fear campaign over the fallout from Brexit.

And a no-deal Brexit — one which would see the UK leave the EU without a formal withdrawal deal in place — tops the list of what Johnson mockingly calls the establishment’s “apocalyptic” forecasts.

Johnson’s intervention on Monday comes…

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd