The financial media still doesn’t get it… Obviously! Transfixed and jaw-agape at seemingly at-odds aspects to a new engagement with Beijing, the MSM financial media are clueless. They are genuinely disconnected, and have no idea what is going on.
The majority of financial pundits are perplexed at what they can see on the surface. USTR Robert Ligthizer and Treasury Secretary Steven Mnuchin are beginning discussions with Beijing. Meanwhile President Trump’s tweets seem to dismiss the potential of the deal-making. The media call this mixed-messaging; however, that’s not what this is.

Secretary Wilbur Ross was very insightful last week when he also spoke of the current U.S. perspective toward the U.S-China trade negotiation.  If you have followed the basic road-map of America-First trade policy, there’s was a very clear picture. However, as we expected, most pundits and trade analysts ignored the administration message.
Commerce Secretary Ross warned the professional investment class when he said the current objective for Mnuchin and Lighthizer was to find out if Beijing is willing to re-engage from the starting point where they left-off when talks collapsed.
That was a big tell.
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Earlier today President Trump sent a warning tweet about Apple possibly incurring tariffs on their products if they continue a plan for manufacturing in China.  Later in the day the president answered direct questions about those possible tariffs.
Additionally, Secretary Wilbur Ross was very insightful when he also spoke of the current U.S. perspective toward the U.S-China trade negotiation.  If you have followed the basic road-map of America-First, there’s a very clear picture; however, most pundits and trade analysts will likely ignore the message.

Subtle as a brick through a window…. yet it’s amazing how many people can’t see it.
Secretary Ross warned the professional investment class that the current objective for Secretary Mnuchin and USTR Lighthizer is to find out if Beijing is willing to re-engage from the starting point where they left-off when talks collapsed.  That’s a big tell.
After several phone calls and staff contacts if the U.S. team doesn’t know the answer to that question, well, there’s almost zero likelihood of any optimistic outlook.  In essence, the only value within the current engagement is financial ‘optics’ to stabilize markets.
It has been clear -validated by the G20 outcome- that President Trump is not going to accept anything less than a full and complete structural change in the U.S. trade position with China.  Lighthizer’s severe compliance and enforcement clauses, specific to each unique trade sector, are non-negotiable.
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The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019.  The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.

The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.
The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook.  With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China).  This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.
The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy.  CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.
Wall Street wants bad news because Wall Street wants a lower fed rate.  As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”….    Sometimes you just have to laugh.
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An article from Reuters discussing the position of the International Monetary Fund (IMF) is interesting.   Essentially the IMF is warning that “global economies” will contract by $455 billion next year due to the ongoing trade conflict between the U.S., China, the EU and to a lesser extent, Japan.  Yes Alice, there are hundreds of billions at stake.
There’s really no reason to doubt the amount estimated, though I think it’s on the short side, but the yearly value seems in line.  I have no doubt President Trump will cost the “Global Economy” $455 billion…. because that money will be transferring back to the America First economy. That’s what happens as MAGAnomics reverses the IMF trade (wealth distribution) model.

The IMF is correct in part (the effect), incorrect in part (the cause), and mostly hypocritical.  The Euro-minded IMF rails against the high value of the U.S. dollar, but simultaneously ignores the motives behind the intentional devaluation of currencies that are pegged against the dollar.

WASHINGTON (Reuters) – The International Monetary Fund said on Wednesday the U.S. dollar was overvalued by 6% to 12%, based on near-term economic fundamentals, while the euro, the Japanese yen and China’s yuan were seen as broadly in line with fundamentals.

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We had to wait a few weeks to see how the Beijing communists and Xi Jinping hardliners were positioned for new trade talks; and now things make sense.
Initially it seemed at odds with Beijing’s prior position to restart U.S-China trade negotiations with Vice-Premier Liu He.  The prior three months of negotiation came to a collapse when Beijing resoundingly rejected the trade terms organized by Liu He.  If the Red Dragon was so opposed to conciliatory terms, why would team Xi restart with the same negotiator?  Now it makes sense, they didn’t.

China’s Commerce Minister Zhong Shan has been assigned the role to harden the position of the communist regime and override any panda presentations by Liu He.  Vice-Premier Liu retains the panda mask, but Zhong is the ultimate control agent.  The message within Zhong’s placement tells the true nature of the Chinese position: Trade War !
Beijing attempts to downplay the position of their hard-line commerce addition, but the reality of the re-started trade discussions tells a more fulsome story.  Chairman Xi took the strategically presented bait and is going to engage in full confrontational trade war with President Trump and the U.S. team.

SCMP – The participation of China’s Commerce Minister in the latest trade discussion with the United States was “normal”, China’s Ministry of Commerce said on Thursday, playing down the eye-catching change in Beijing’s negotiating team.

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Chopper pressers are the best pressers.  Earlier today President Trump stopped to deliver remarks and answer questions from the assembled media prior to boarding Marine-One.
There is a ton of updated current event information in this chopper presser. [July 4th, Economics, Fed, China, Biden, Wilbur Ross, Census, G20, Trade Deals, etc.]  The full transcript is below the video.

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[Transcript]  THE PRESIDENT: That’s a great crowd of people. We had a phenomenal crowd last night, and it was a fantastic evening for our country. You’re going to have a lot of people being recruited, I think, based on that. We’re going to have a lot of — a lot of people joining our military. And we really needed that.
Our job numbers are so good that the military has a hard time getting people. And I think, really, that you’re going to see a big spike. I’ve already heard it — a lot of people calling in. No place like our military. I think we showed that last night.
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Excellent news from White House manufacturing policy advisor Peter Navarro as he discusses the re-engagement in U.S. and China trade discussions. Great INFO.
You won’t see this interview highlighted by MSM.  As we anticipated the prior 150 page agreement negotiated by USTR Robert Lighthizer and Vice-Premier Liu He, previously dismissed by Beijing after three months of intense discussions, is now the starting point for new talks.  This means the Chinese have acquiesced to the prior terms they rebuked.
The seven chapters, each assigned to a specific trade sector, are the baseline for Lighthizer and Liu He to re-engage.  Excellent news from the position of the U.S. team.

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The CNBC knucklehead injecting about a Hauwei compromise was quickly corrected by Navarro. The Commerce Department restrictions and process for 90-day licenses to do business with Hauwei remains unchanged.
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Jumping Ju-Ju bones. Wow.  The North Korean broadcast of the meeting between President Trump and Chairman Kim Jong-un has now been fully translated to English.
Initially, even without the translation, we could see the optimistic message and a mutual strategy that would align the interests of Chairman Kim and President Trump.  However, the translation is even better than anticipated.  The message to the North Korean people is not just optimism and propaganda, the message directly and purposefully conveys an incredibly strong message of respect for U.S. President Trump.  WATCH:

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Traditional propaganda messaging would convey great power and respect for Dear Leader Kim Jong-Un and a message of moderate diminishment toward the U.S. President.  This type of propaganda narrative is also what the U.S. Main Street Media had stated Kim Jong-un would use.  But they’re wrong… all of them.
The actual message conveyed to the citizens of North Korea is one of united celebration and magnanimous respect for Chairman Kim and President Trump.  The broadcast specifically cites “wisdom”, “respect” and praise for the “incredible courage” of President Donald J Trump.  Exactly the opposite message predicted by the DC naysayers.
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President Trump has completely reset the pre-existing hostile dynamic that existed between the U.S. and North Korea.  By focusing on the root cause of the issue, Beijing China, Trump has been able to reach a position with Kim Jong-un that seemed impossible two years ago.
All over southeast Asia the media reports are optimistic, positive and upbeat with the possibility of a generational crisis finally coming to an end.   President Trump is being called a hero bringing peace to Korea.

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The North Korean state-run media has broadcast the video below.
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During a joint press conference South Korean President Moon Jae-in and U.S. President Donald Trump announced and confirmed that President Trump will meet with North Korean Leader Kim Jong-Un at the demilitarized zone for a historic handshake today.
UPDATE: Video Added

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