We are living in remarkable times.  Often we forget, amid the noise within the challenges, to pause and reflect on the accomplishments.

“The nation state remains the true foundation for happiness and harmony”…

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For all intents and purposes Germany is the EU, because German economic policy dictates the outcomes of all EU economic policy.  So as the EU promises to engage in more central bank monetary printing (quantitative easing) simultaneously Germany promises to keep negative interest rates floating as long as possible. [EU Parliament pictured below]
Yes, the EU is in serious structural economic trouble; and that is likely the real reason why quivering Chancellor Angela Merkel has decided to exit the political stage before the larger communal catches on.

Within the remarks by German Finance Minister Scholz it is the lamentation about the lack of investment into their grand collective economic scheme where you find the economic dissonance, and ultimately the hilarious punch lines:

BERLIN (Reuters) – German Finance Minister Olaf Scholz said on Saturday that he expected interest rates to remain very low for “the next few years”, adding that companies should seize the opportunity of near-zero borrowing costs to boost private sector investment.
The European Central Bank has already signaled even more monetary stimulus for the euro zone economy, hoping to arrest a downward spiral that could lead to an economic recession.

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An interesting article in the South China Morning Post (SCMP) highlights how China is shifting their procurement priority from minerals used in manufacturing (cobalt, copper) to the acquisition of food and agriculture products.
The impact is being felt throughout Africa, where mining companies are shutting down operations because Chinese demand no longer exists.
Articles like this highlight the ancillary impacts of a weakened Chinese economy.
Despite the proclamations by Beijing about their ability to withstand the withdrawal of the U.S. as a primary customer for manufactured goods, reality shows they cannot.
There is a confluence of events all leading to radical changes just below the surface.  China has been burning cash to subsidize industries impacted by U.S. tariffs.  Simultaneously Beijing has lowered the value of their currency in an effort to eliminate the tariff impact in the cost of their finished goods. However, as the ideological economic conflict between the U.S. and China continues, Beijing cannot hold their position indefinitely.
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On Thursday June 20, 2019, Canadian Prime Minister Justin Trudeau traveled to Washington DC for a meeting with Speaker Nancy Pelosi and democrat leadership.  After the political ideologues held the meeting, Trudeau and Canadian Foreign Affairs Minister Chrystia Freeland tabled the Canadian ratification on the USMCA trade agreement.
It was obvious both groups of avowed leftists agreed to stall the USMCA for politics.
On August 13th White House emissary National Security Advisor John Bolton met with Britian’s Chancellor of Exchequer Sajid Javid, and the public became aware of efforts toward a six month post Brexit U.S-U.K trade agreement that would become effective on November 1st, 2019; immediately the day after Brexit was official.
On August 14th Speaker Nancy Pelosi quickly rushed a press release saying the House would never support that interim U.S-U.K trade agreement, using cover story of worry about Ireland/Northern Ireland peace accord.  Beyond all the talking points the baseline reason for Pelosi’s opposition is Democrats do not support Brexit.  Both the immediacy and the construct of the counter-maneuver by Pelosi were noted. [House in recess].
Immediately after the deal between President Trump and Prime Minister Boris Johnson became public; an intense international media effort began to push a narrative of the “U.S. heading to a recession”.  The group of corporate financial media interests; those who advance the interests of Wall Street and are adamantly adverse to a global trade reset; and the political opposition to Donald Trump, began using a recession talking point in unison.
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Finally an economic analyst gets prime-time media pundits to listen as he describes the fundamental difference between the U.S. “Economy” (Main Street) and the U.S. “Markets” (Wall Street).  Charles Payne understands most of this, but El-Erian has it nailed.
Allianz Group chief economic advisor, Mohamed El-Erian, accurately describes what is happening in an era where deglobalization is taking place. The U.S. economy is strong; however, the multinationals on Wall Street -invested overseas- are exposed.  Thus there’s a disconnect and accompanying market volatility.
This is well worth watching because this is the first well-regarded financial pundit that is speaking truth to Wall Street in terms the panel pundits will understand/accept.

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There is nothing that China and the EU can do to stop the de-globalization process; and efforts to stimulate their economy, more quantitative easing (pumping money) while the global supply chains are being shifted, are futile.
The more a nations’ economy is dependent on exports, the more exposure they have to the inherent downsides of de-globalization.   U.S. companies that are invested in these nations will lose their investment over time; some rapidly.  This will keep the stock market volatile, yet the Main Street USA economy is thriving.
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Early on Tuesday United States Trade Representative Robert Lighthizer announced the modification of “next step” tariffs on Chinese products.  [See Here] “Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”

President Trump responded to the delay/modification when questioned in New Jersey.  President Trump noted a “very productive” phone call between Lighthizer and Vice-Premier Liu He of China:

[Transcript Segment] – […] Q Why did you make the decision on the tariffs, to delay the implementation of the tariffs?
THE PRESIDENT: Only to help, I think, a lot of different groups of people. And we had a very good talk yesterday with China — a very, very productive call. I think they want to do something. I think they’d like to do something dramatic. I was not sure whether or not they wanted to wait until a Democrat has a chance to get in. Hopefully that’s not going to happen because the economy would go to hell in a handbasket very fast.

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Those who could not see this coming are those who just don’t pay attention to how President Trump operates the geopolitical influence of economics.  This is Trumpian.
U.S. President Donald Trump and British Prime Minister Boris Johnson are walking their respective trade teams through a process to deliver a U.S-U.K trade deal on the day after a no-deal Brexit is scheduled to happen October 31st.  An interim trade agreement that goes into effect November 1st 2019 is pure Donald Trump win/win deal-making.

President Trump supports the nationalistic position, purposes and intents of Brexit. PM Johnson has promised to deliver Brexit by the mandatory date of October 31st.  One of the benefits, and also concerns amid the political left in the U.K, surrounds the economic impacts.  President Trump and PM Johnson would counter all those concerns with the announcement of an agreement for an interim bilateral trade deal ahead of Brexit.
This strategic approach, a deal that delivers both the Brexit result and the economic stability to offset any Brexit downside concerns, was the original idea that President Trump proposed to Theresa May two years ago.

LONDON (Reuters) – Britain and the United States are discussing a partial trade accord that could take effect on Nov. 1, the day after Britain is due to leave the European Union, a senior Trump administration official said on Tuesday.

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First rule in geopolitics, it’s always about the economics.  Second rule in geopolitics: refer to rule #1.    Understanding this basic truism is the key to understand how President Trump is able to be so effective.  There are trillions at stake, and infinite interests.

“Economic security is national security.” ~President Trump

All politics circles back to the underlying economics; whether it is an individual financial self-interest for a specific politician, or whether it is a larger financial interest for a group or even a nation.  Everything is always about the money, and that essential truth is why Donald Trump is so uniquely qualified, influential and stunningly effective. Today:

(VIA CBC) The United States would “enthusiastically” support a no-deal Brexit if that is what the British government decided to do, U.S. national security adviser John Bolton told reporters on Monday.
[…]  As the United Kingdom prepares to leave the European Union on Oct. 31, its biggest geopolitical shift since the Second World War, many diplomats expect London to become increasingly reliant on the United States.
“If that’s the decision of the British government we will support it enthusiastically, and that’s what I’m trying to convey. We’re with you, we’re with you,” said Bolton, in London for two days of talks with British officials. The U.S. administration is seeking an improved U.S.-British relationship with Prime Minister Boris Johnson after sometimes tense ties between Donald Trump and Johnson’s predecessor, Theresa May.

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Former White House chief strategist Steve Bannon appears on Fox News with Maria Bartiromo for a wide-ranging discussion on current political and geopolitical events.
Topics include the U.S-Mexico border security and immigration; the 2020 democrat candidates (announced and unannounced); the bigger geopolitical issues behind the U.S-China trade conflict; Joe and Hunter Biden’s direct financial relationship to the Chinese communist government; the USMCA trade agreement; Trump’s leverage to increase an EU free economic alliance against China; and radical action by dems.

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It is hard to believe but it’s been three years since we first outlined what would happen if candidate Donald Trump’s “America First” policy was implemented.  Specifically how the Federal Reserve would essentially become disconnected and functionally obsolescent for a few years.  As a result of the evidence visible, we are in a unique position to explain.
Staying in the big picture, a disconnected Fed was very predictable.  In the past 35 years the Wall Street multinationals gained as cheap money flowed overseas to start global manufacturing operations; Main Street USA suffered.  When you reverse this process by punishing the multinationals (tariffs), shifting the global supply chain, and changing the best location for investment dollars, Main Street USA benefits.  President Trump August 7th tweets statement:

Notice the “we are competing against other countries” part of the statement.  This is key to understanding what is in the future.  The Wall Street ‘multinationals’, corporations making and selling goods, are invested in production within other countries.
On one hand, Wall Street loves cheap money (low fed rates). However, on the other hand Wall Street multinationals are invested in overseas manufacturing; and those corporations don’t want to see the retention efforts of China and the EU undermined with a lower dollar value (lower fed rate).  So Wall Street is schizophrenic (check the stock market).
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