China joins MSM and Federal Reserve in trying to tank the stock market - Thomas Lifson

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by Thomas Lifson

President Trump has already stated the obvious: China wants him to lose his re-election bid so that a “stiff” from the Democrats will replace him and be a pushover

In the hours before American equity markets open for trading, China sent a huge sell signal to the traders on Wall Street. Bloomberg reports:

China called planned U.S. tariffs on an additional $300 billion in Chinese goods a violation of accords reached by Presidents Donald Trump and Xi Jinping, signaling an American move earlier this week to delay some of those levies was not enough to stave off retaliation.

Photo courtesy US State Department

The effects already are manifest:

European stocks declined and U.S. equity futures fell. The Stoxx Europe 600 index moved lower while the three main American equity contracts dropped.

President Trump has already stated the obvious: China wants him to lose his re-election bid so that a “stiff” from the Democrats will replace him and be a pushover, letting China return to the good old days of rigging trade, deindustrializing the USA, and preparing to replace us a the global hegemon. Frontrunner, Joe Biden, whose son has prospered thanks to Chinese investment in his hedge fund, has already signaled his passivity:

“China is going to eat our lunch? Come on, man...they can’t even figure out how to deal with the fact that they have this great division between the China Sea and the mountains in the east, I mean in the west.”
Biden continued "they can’t figure out how they’re going to deal with the corruption that exists within the system. I mean, you know, they’re not bad folks, folks. But guess what, they’re not, they’re not competition for us.”

China made this announcement after viewing yesterday’s steep decline in the American equity markets, sort of a one-two punch aimed at searing into investors and the voting public the notion that a recession is coming, which can be a self-fulfilling prophecy.

No matter that our economy is still strong, even as Europe and Japan falter. Jack Hellner points out that the yield curve inversion yesterday was a very weak excuse to drive down the market, yet the media pretended and hammered home the theme that it is a sign of impending doom. Jack asks:

Why is the media lying to the public about the last time interest rates inverted?
The media has been trying to scare the public about the dangers to the economy since before Trump was elected. And the gloomy forecasts are going to get worse the closer we get to the 2020 election because facts haven't mattered for a long time, only power for Democrats. The media and other Democrats are essentially trying to talk the country into a recession. They would rather have people dependent on government and they need their votes. Facts are irrelevant.
The media along with other Democrats say that Trump is running on fear but every day they try to scare the public, especially the young, with fears of a recession or we are going to die in a short time because of climate change.
Today the doom predictions are very loud because of the stock market declining. We are being told that interest rates have inverted for the first time since 2007 and that signals a recession. Why hasn't the media done a few minutes of research since the yield curve inverted so recently and the doom predictions were the same then as today?
Why has the media chosen to ignore that interest rates inverted on March 22nd of this year and the stock market has hit all-time highs since then, and the U.S economy and especially the job market have done very well since then.
Most journalists are not really journalists investigating and reporting. They are campaigning for Democrats with talking points. The media is more dangerous to our freedom and prosperity every day.
When will they tell the truth?
The truth is that the yield curve is inverted for one reason only. The fed funds rate is over 2% for overnight money, so why the heck would institutional investors buy three month money at below the ten year bond yield of 1.59% when they can get over 2% for overnight money? It is time that Fed chairman Jerome Powell aligned its overnight rate with the market. Then the yield curve will not be inverted.
The Federal Reserve forgot that their job was to protect against inflation -- which is low. It is not to slow down the economy because statistically it looks great. As long as inflation is low, they should let the market soar. Efficiency, productivity, low taxes and fewer regulations explain why our economy is doing much better than most of the World. Thank goodness we have a president who is much smarter and has more common sense than the so-called experts. And he is certainly 100% smarter than the journalists and other Democrats that trash him on a daily basis.

Thomas Lifson

Source: https://www.americanthinker.com/blog/2019/08/china_joins_msm_and_federal_reserve_in_trying_to_tank_the_stock_market.html

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