Friday, November 6, 2009

Trade wars

Well, it’s almost redundant to point out that once again my predictions holds. As stated many times before increased protectionism is just around the corner. And several months ago I spoke of the pending trade-war between the US and China. Now it seems it is starting to escalate. Although not really a trouble yet, it will be in one way or the other.

Read more at Market Watch

Shall we guess that the Obama administration will curve this little thingy and instead start subsidizing the mentioned businesses? Maybe throw some bail-outs at them?

Obama cannot afford a trade war with China, they have the power to, at any moment, sell off a couple of trillions of USD, to mention one thing. But he cannot afford to alienate workers union or manufacturing companies either, so the most logical conclusion is to sneak in some extra founds the backdoor, indirect protectionism, if there is such a thing. Oh, China will not like that either, but maybe if they are sneaky enough the Chinese cannot really complain.

Ah, the Schemes, the schemes…

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