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MarkGB 

"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world" - Henry Kissinger

and yet...

"Sooner or later everyone sits down to a banquet of consequences" – Robert Louis Stevenson

Too much 'Trump Weed' can be bad for your health

In response to an FT article by Martin Wolf on 24th January 2017, entitled ‘Donald Trump and Xi Jinping’s battle over globalisation’

https://www.ft.com/content/74b42cd8-e171-11e6-8405-9e5580d6e5fb?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a

'Mr Xi recognised that globalisation was not without difficulties. But, he argued, “blaming economic globalisation for the world’s problems is inconsistent with reality...His vision matches that of the last US president to address the World Economic Forum...President Bill Clinton…

Mr Trump rejects this vision…The rhetoric of “America First” reads like a declaration of economic warfare...

The US is immensely powerful. But it cannot even be confident it will get its own way. Instead, it may merely declare itself to be a rogue state…

Mr Xi’s vision is the right one. But, without Mr Trump’s support, it may now be unworkable. That would benefit nobody, including the US' – Martin Wolf

What are you smoking Mr Wolf? Don’t tell me…I’ve got it…it’s ‘Trump Weed’ – apparently it has the same effect as cannabis (allegedly), particularly when consumed by people not totally ‘at one’ with the chemicals… apparently it distorts your vision and can cause the onset of paranoia and strange delusions, or was that 'conclusions'?

But seriously…are you kidding?  Xi is the new Clinton? Yeah right.

So what else might be happening here? It was his first visit to Davos...it was 2 days before the inauguration of a new US president...a guy who is sending him 'new sheriff’ noises and positioning himself closer to his own new best buddy Vladimir Putin (he knows all about the two plays one game)…his audience consists of a number of very influential neo-liberals and neo-cons who, albeit for slightly different reasons, are scared stiff of having a guy in the White House that they don't own...and Mr Xi wonders to himself 'what shall I say to the Davos audience'?

Shall I talk about the fact that I'm slap bang in the middle of Robert Mundell's impossible trinity and have no hope of maintaining an open capital account, fixed exchange rate and an independent monetary policy all at the same time without causing a reserve crisis? Shall I talk about the fact that my reserves have gone from $4 trillion to $3 trillion over the past two years, $1 trillion is illiquid, I need to keep $1 trillion to bail out the banks, which leaves $1 trillion…but I’m losing $80 billion a month from capital outflows…shall I tell these folks that I’m going to have to devalue my currency and increase capital controls further…or shall I position myself as a free-trader in order to make myself look great in front of these folks who are aching for another good reason to loathe the new chief…mmm tough choice…

Come on Mr Wolf…I’m not saying that there is not something in your analysis, and I’m certainly not arguing for protectionism…but for God’s sake try to analyse what’s happening strategically and in the round. All this 'Trump Weed' is turning the FT behemoths into quivering chicken littles.

***

A reader asked me a useful question:

What's up Mark? This seems well below your usual skills. Mr Wolf's argument was not about Xi or China or anything else than about Trump's apparent trade policies. Care to address that subject instead of the Xi sideshow? (Trump weed - really?)

My reply:

The point I'm making is that the FT is so obsessed with bashing Trump it is using increasingly spurious examples and linkages to make its point - as in Xi having a vision of 'free trade'. The analysis is increasingly blinkered. But I get that my 'device' of 'Trump Weed' didn't work for you and your question 'what's up?' is a good one...exasperation...time for a break...

The growth of 'Identity Politics'

Liar, liar, pants on fire