Thursday 23rd of January 2020

trading blows...

trade blows

When New Zealand slashed its interest rates by half a percentage point this week, it sucked the Australian dollar into a vortex, dragging it to its lowest point in 10 years.

It was, one economist said, “shock and awe” by the Kiwi central bank, a move taken only three times – after the Christchurch earthquake, the global financial crisis and September 11.

In the background, foreign central banks have been slashing their interest rates, bond rates have been tumbling around the world, and China and the US have been slugging it out in the second round of their trade bout.

Bloomberg declared that the fall in bond rates had sounded the “shrillest alarm yet over the economy”, while other media prophesied the world was teetering on the brink of economic disaster.

º Why the ‘yield curve’ is such a reliable predictor of a recession

Then on Thursday, NZ’s Reserve Bank governor Adrian Orr dropped the knife in the toaster in a “whatever-it-takes moment” by saying the RBNZ may have to resort to negative interest rates if it felt it needed to resuscitate the economy further.

“Easily within the downward errors of our forecasts … if you’re trying to stimulate … that means you have negative interest rates,” Mr Orr said on Thursday, potentially leading to mortgage rates of 2 to 3 per cent.

For many commentators, this was confirmation the sky was about to fall in.

But BetaShares chief executive David Bassanese prescribed a cup of tea, a Bex and a good lie down.

Mr Bassanese said a recession was “a low probability” based on the strength of the US economy, that central banks were cutting rates as a precaution, and that zero interest rates would choke the viability of banks.

“The Reserve Bank will only cut to 0.5 per cent by early next year. I am not changing my view or bringing it forward,” Mr Bassanese said.

“They would be reluctant to go too far too fast and I certainly don’t think they will go to zero [per cent].

“If you’re a glass-half-empty person, you look at the bond market and say it’s pointing to a recession,” Mr Bassanese said.

“If you’re a glass-half-full person, you’d say the bond market is simply saying that central banks will come to the party and do what’s needed and put enough stimulus in the market that’s necessary [to prevent a recession].”

In the US, consumer spending was still strong, the labour market was still firm and the US is also a large enough domestic market to not be too buffeted by the trade war, he said.

“They [central banks] are simply taking out insurance. They’re trying to stave off a recession … they’re firing their bullets now and the bond market is just pricing in those future cuts.

“And the sharemarket is holding up because they believe that central banks will do enough to ward off a global recession.”


“Trump’s re-election is the key motivator for making the economy work, and he’s in a jam where he polls well on fighting China, but fighting China is hurting his base.“It’s volatile. Whatever the state of play is now will not be the state of play next week.”

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caught like the lettuce in the sandwich...

The West Australian Government has been left walking a fine line in navigating the state's economic reliance on China in the midst of a trade war between the superpower and the United States.

Key points:
  • A warning on China from Liberal Andrew Hastie sparked criticism from the Premier
  • China is WA's biggest trading partner by far, taking almost half of its total exports
  • Experts say WA's commercial relationship with China may not be possible in future


China has been WA's largest trading partner for the past 13 years, with half of the state's exports going there. WA exports more goods to China than all the other states and territories combined. 

On the flip side, Chinese visitors were also WA's largest spenders in 2018.

Tensions flared yesterday after the head of Federal Parliament's intelligence committee, WA Liberal MP Andrew Hastie, warned China's ambitions could threaten Australia's freedom.

In the piece, he compared the handling of China's rise to the failure to contain the advance of Nazi Germany and said the nation needed to acknowledge the challenges ahead otherwise "choices will be made for us".

Mr Hastie made the comments, reflecting some of the most serious condemnations of China made by any Morrison Government member, in an opinion piece in The Sydney Morning Herald.

WA Premier Mark McGowan accused Mr Hastie of damaging the state's relationship with China.


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I believe that Liberal MP Andrew Hastie's comments did not come off the cuff... He would have been briefed by the PM's office to rattle the cage without implicating our PM, Scummo. It's the way it's being done...

elephants in a small china shop...

The Mid-Range Nuclear Forces Treaty, for all time buried by Washington and Moscow, is a new chapter in the history of global security that is beginning. Defense expert Philippe Migault returns to the end of the FNI.

The Treaty on the Intermediate Nuclear Forces (INF), or Washington Treaty, symbolic of the end of the first Cold War, signed on December 8, 1987, between Ronald Reagan and Mikhail Gorbachev, officially becomes obsolete today.

The United States, which withdrew from the treaty on February 1, 2019, arguing that Russia had failed to comply with the treaty, had in fact given the Kremlin until August 2 to give guarantees of compliance with clauses of the text.

Predictably - Russia announced on February 2 that it was suspending its participation in the treaty - Russian authorities refused to comply with US injunctions over their 9M729 missile accused of violating the agreement. If Moscow has not officially withdrawn from the treaty, it does not consider itself less liberated from its obligations, which amounts to the same thing.

Obviously, Washington and its NATO partners will not fail to blame Russia. Georgia 2008, 2012 protests, Ukraine 2014, interference in US presidential elections, Skripal case, "poisoning" of Navalny opponent ...: The pitch is exemplary clarity. The USSR is back. Besides, Hillary Clinton had predicted it. At the heart of the summer, with media in search of sensational and whose few defense experts are on vacation, the Western press will of course relay this storytelling without thinking more.

Yet the end of the FNI treaty has little to do with all of this. It is the culmination of a string of violations of international law by the United States on the one hand, and on the other hand, a process of increasing exasperation of Russia with, as a corollary, to the international agreements assumed, such as the annexation of Crimea, answer of the shepherd to the shepherdess.

Obviously, since we are on RT, the critical reader will not fail to point out that of course, the fault is once again the Americans. But who can reasonably deny that it is the latter who, imagining they can endorse not "the dividends of peace", but those of "the end of history," have behaved for a quarter of a century like elephants in a china shop, sacking the strategic balance they have, the first, ardently defended?


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MOSCOW, Jan. 23 (Xinhua) -- The Russian 9M729 land-based cruise missile, contrary to the allegations of the United States, does not fall under the Intermediate-Range Nuclear Forces Treaty (INF), senior Russian officials said Wednesday.

"Russia has fulfilled and continues to strictly observe the provisions of the treaty and does not allow any violations," said Lt.-Gen. Mikhail Matveyevsky, Chief of the Missile Troops and Artillery Branch of the Russian Armed Forces.

He spoke at a news briefing on the cruise missile for military attaches and Russian and foreign media, saying that the United States uses the missile to accuse Russia of violating the 1987 treaty and threatens to abandon it.

"The 9M729 missile could not be tested at the prohibited range of 500 to 5,500 km, as it was developed for other purposes," Russian Deputy Foreign Minister Sergei Ryabkov said at the briefing.

According to Matveyevsky, the missile, which was demonstrated at the briefing in the Moscow region, is a modernized version of the 9M728 cruise missile, part of the short-range Iskander-M missile system.

The 9M729 missile is 53 cm longer than its predecessor and its maximum range decreased by 10 km to 480 km, which is below the minimum 500 km range set by the treaty, Matveyevsky said.

Under the INF Treaty signed between the Soviet Union and the United States, the parties committed themselves to liquidating their ground-based medium-range and shorter-range missiles, the launchers of such missiles, as well as the associated auxiliary facilities and equipment.

By June 1991, the Soviet Union destroyed 1846 medium- and shorter-range missiles, as well as 106 launchers and 239 Oka missiles with a range of 400 km as a gesture of goodwill, Matveyevsky said.

Meanwhile, Ryabkov said that the United States is testing drones and other systems banned by the INF treaty.



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torpor in the land of seven sundays a week...

Australia's foreign policy discussion — such as it is — often seems to roll along in a torpor that is out of sync with what is actually happening in the world.

Only the more extreme rhetoric, or biggest threat, or, dare one say, sharpest three- or four-word slogan seems to penetrate through the fog, while the bigger picture of what is at stake either gets lost, or quickly forgotten once the headline issue has been dealt with.

There has been plenty of this abroad in this week when the one big story that looms up wherever you look is China.

A week ago, the story was all about whether the United States wanted us to have missiles in Darwin.

It took a few days of bumbling to knock that on the head, but once it had been ruled out, the broader messages US Secretary of State Mike Pompeo and US Secretary of Defence Mark Esper were delivering seemed to get lost.

These were messages about the preparedness of the US to escalate strategic tensions in the Asia-Pacific by pushing for ground-based missiles, and the United States' willingness to drop Australia right into heightened diplomatic tensions with Beijing by clearly exhorting Australia to back Washington's stance against China.

That these messages seemed to get lost after a couple of days might be explained by the fact there were even more alarming China-related stories erupting: the upgrading of US/China trade tensions into a currency war; and an increasingly ugly situation in Hong Kong.

The decision of the Chinese to devalue their currency on Monday in response to increased US trade sanctions shook financial markets, with ramifications for the value of the Australian dollar and the value of Australian investments.

Equally, what is happening now in Hong Kong — with an escalation of aggressive warnings to protesters this week by Beijing — seems to make the prospect of a significant crackdown there now very likely.

Yet what has captured the debate — or at least the headlines — is the comparison a government backbencher, Andrew Hastie, has made between China and the French failure to recognise the threat from Hitler's Germany in 1940.

'See above' isn't leadership

There was immediately an outcry about any comparisons to the Nazi regime, and very little discussion of the strategic argument Hastie was making.


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see also:

still feeling the howard effects of ming...

beating the democrats to it...

Democrats Vow to Go Tough on Trade. But Trump Beat Them to It.

  • Democrats have long been critical of NAFTA and China, but President Trump has stolen that playbook and gone further.
  • Now they are trying to figure out how to differentiate themselves from Mr. Trump — without ceding their position as the party that will defend workers.

US to drop off the ATO?...

WASHINGTON (Sputnik) - US President Donald Trump said on Tuesday that the United States may pull out of the World Trade Organization (WTO), following what he claims are years of mistreatment at the hands of the organization.

"We will leave if we have to", Trump said during a campaign rally in Pittsburgh. "They have been screwing us for years, and it's not going to happen any longer".

Trump said the United States does not need the WTO if the organization fails to address loopholes that favor certain nations.

"They view certain countries like China, India, many countries - they've viewed them as growing, they are growing nations. [...] Well, they have grown, and they had tremendous advantages. We are not letting that happen anymore", he said.

Trump has repeatedly reiterated his criticism of the WTO, claiming that the US is disadvantaged as a member of the global bloc. The US president has also repeatedly called the WTO a "catastrophe" and a "disaster" for the US.

Trump recently directed US Trade Representative Robert Lighthizer to secure changes in the group that would prevent developing countries from utilizing regulatory loopholes.

The White House pointed out in a memorandum that China and many other countries continue to style themselves as developing countries “allowing them to enjoy the benefits that come with that status and seek weaker commitments than those made by other WTO members”.

Shortly after issuing the memorandum, Trump said in a statement that the WTO is "broken" when the world's richest countries claim to be developing countries and get special treatment to avoid WTO rules.

The memorandum points out that seven of the ten wealthiest economies in the world - as measured by GDP per capita on a purchasing-power-parity basis - currently claim developing-country status: Brunei, Hong Kong, Kuwait, Macao, Qatar, Singapore, and the United Arab Emirates.

China, the world's second-largest economy, has been identified by the United States as the most significant abuser of WTO regulations. Since joining the WTO, China has insisted that it is a developing country, according to the memorandum.

Discussions about reforming the WTO have been going on for years and the organization's 164 member states are yet to reach a consensus. They are divided into two camps, with one group of states - including Russia - advocating for the organization's further development, and another calling for developing a new format for the bloc.


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get used to hopeless...

Australia and the rest of the world will need to get used to the trade war between the United States and China, Prime Minister Scott Morrison has said.

Key points:
  • Scott Morrison said he had been hopeful of a resolution to the trade spat after June's G20 meeting
  • But he said he expected that countries would need to absorb and accommodate ongoing tension
  • Mr Morrison will visit the G7 Summit in France this weekend


The two superpowers continue to engage in their tit-for-tat tariff fight, with US President Donald Trump announcing earlier this month a new range of taxes on $US300 billion ($443 billion) in Chinese imports such as mobile phones.

Mr Morrison's pessimistic warning on the ongoing trade tensions comes ahead of his visit to the G7 Summit in the French coastal town of Biarritz this weekend.

He said negotiations between Washington DC and Beijing were continuing, but not as hoped.

"I was more confident going into the [2018] G20 meeting in Argentina, in Buenos Aires, and they did make quite a bit of progress there, but things really fell back after that," Mr Morrison told Channel Seven.

"There was an attempt to bring that back forward [at this year's G20] in Osaka, but we've seen what's happened since then. 

"So I think we're going to have to get used to this for a while, this level of tension, and we've just got to accommodate that, we've got to absorb it, we've got to see the opportunities in it, of which there are many."


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still at it...

Wall Street plunged Friday after President Trump “ordered” US companies to seek alternatives to doing business in China.

The Dow Jones Industrial Average dropped more than 400 points moments after Trump launched into a Twitter tirade lambasting China for intellectual property theft and fentanyl shipments to the US.
“We don’t need China and, frankly, would be far…better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP,” Trump said in a series of tweets.

“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” Trump said.

Both the S&P 500 and Nasdaq joined in the bloodbath, shedding 1.6% and 1.8%.

Trump also directed Fed-Ex, Amazon, UPS and the US Post Office to “search for & refuse” fentanyl shipments from China and other countries.

Shares of Amazon dropped 1.9% while FedEx and UPS shares were off 2.6% and 2.4%, respectively, as of 11:35 a.m.

Apple, which makes many of its products in China, dropped 3.8% to $204.20 a share.

Trump’s remarks came following China announcing that it plans to impose $75 billion of tariffs on US goods, including agricultural products and small aircraft as well as resume tariffs on US autos. The tariffs are set to go into effect in two stages on Sept. 1 and Dec. 15, mimicking the schedule the US plans for instituting tariffs on Chinese goods.

Trump said he will be responding to China’s tariffs this afternoon.



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more world delusion from trump...

...Wanting to strike a deal 'very badly'

At the G7 summit in France, US President Donald Trump said he believed China was sincere about wanting to reach a trade deal.

He said this was because of, what he described as, increasing economic pressure on Beijing and job losses there.

It comes after both sides rapidly escalated their tit-for-tat trade war over the weekend, by threatening to impose further tariffs on each other's goods.

"I think they want to make a deal very badly … I don't think they have a choice," Mr Trump said.

"China called last night our top trade people and said, 'Let's get back to the table', so we will be getting back to the table and I think they want to do something.

They have been hurt very badly but they understand this is the right thing to do and I have great respect for it."

However, there is some disagreement on whether this phone call between US and Chinese officials actually occurred.

Beijing's foreign ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place.

Hu Xijin, editor of the state-controlled Global Times newspaper, tweeted: "Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days."

"The two sides have been keeping contact at technical level, it doesn't have significance that President Trump suggested.

"China didn't change its position. China won't cave to US pressure."

However, Chinese Vice-Premier Liu He, who has been leading the talks with Washington, said on Monday that China was willing to resolve the trade dispute through "calm" negotiations and opposed any increase in trade tensions.

Market rebound

Despite the mixed signals from the US and China, investors focused on the positive and their trade anxiety subsided.


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Trump lives in his self-created world of make-believe, because he has a couple of big stick (defence and debt)... The US don't have a choice but to negotiate "better"... Their own exporters to China are hurting... 



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a superduper something...


Has China just given the world a sneak look at its new wedge-shaped supersonic spy drone?

Key points:
  • The supersonic drone has been identified as the DR-8, or Wuzhen-8
  • Observers say it resembles a Cold War-era US spy drone
  • It is among the weapons systems which are expected to be on display to mark the 70th anniversary of the foundation of modern China 


Photos and videos posted on Chinese social media over the weekend revealed an array of supersonic and stealth weapons and equipment rolling into central Beijing for a rehearsal ahead of a parade to mark the 70th anniversary of the nation's founding.

The 24-hour rehearsal ended on Monday morning, and observers on social media said the "biggest surprise so far" was what looked like a new drone — the latest example of flashy military equipment being developed and showcased by Beijing.


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The thingster in the picture looks more like an inflated 18-footer (possibly about 30 feet long) sailing dinghies as seen rocketing on Sydney Harbour during the season. One can see them in posh back streets, all covered up to hide their secret shapes, logo and masts. One should also note that what is on the Chinese trailer is "very" lightweight (not much more than 400 kgs), considering the trailer only has two sets of ordinary single wheel bases. 



Presently internet downloads are "interruptus intermintentus" between your Singapore Cloudflare and the USA. This has happened before...


smoothering some corners...

National Unity in Syria and Venezuela

by Thierry Meyssan

As we alone announced at the beginning of the month, a decisive step towards peace was made simultaneously in Syria and Venezuela on September 16th. The two nations no longer force themselves to negotiate with terrorists, but their governments have undertaken to build a new regime in conjunction with their patriotic opposition.

The future of Syria and Venezuela are being played out simultaneously and in parallel. This is normal, because the origin of these conflicts is not local, it is the strategy of the Pentagon of destruction of the state structures, first in the "Enlarged Middle East", then in the "Basin of the Caribbean" "(Rumsfeld / Cebrowski doctrine [1]).

The situation and capabilities of the two states are very different, but their resistance to global imperialism is identical. Hugo Chávez (president from 1999 to 2013) was the voice of the peoples of the periphery in the face of the ambitions of transnational corporations. Disappointed by the Non-Aligned Movement through which, at the end of the Cold War, some members became vassals of the United States, Chavez had thought with President Bashar al-Assad to refound the Movement of free allies on a new basis [2]. To those who wondered about the time needed to carry out this ambitious task, the Venezuelan President responded by anticipating that his Syrian counterpart would take his place on the international scene. He also added, in the five-year plan from 2007-2013 that he authored, instructions to all the administrations of his country to support this distant political ally: Syria [3].

The war raged for eighteen years in the wider Middle East and for eight years in Syria. Afghanistan, Iraq and Libya are already destroyed. Yemen is hungry. Regarding Syria, a government in exile has been recognized by the United States and a handful of its allies. All the country’s assets in the West have been seized. An alternative government replaced the constitutional government with the Arab League. And the regional vassals of the Pentagon have placed themselves under NATO’s orders.

The premises of the war are already well advanced in the Caribbean Basin, particularly in Nicaragua and Cuba. Regarding Venezuela, a self-appointed president has been recognized by the United States and a handful of its allies. All Venezuelan assets in the West have been seized. An alternative government replaced the constitutional government with the Organization of American States (OAS). And the regional vassals of the Pentagon have reactivated the Inter-American Treaty of Reciprocal Assistance (Tiar).

The war is ending in Syria because the Russian military presence makes it impossible to send new troops against the country; whether they are regular US soldiers, mercenaries officially engaged by the Pentagon, or jihadists unofficially engaged by NATO allies. But the victory of the Syrian Arab army against tens of thousands of foreign mercenaries does not mean peace.

Peace is possible in Syria as in Venezuela only on the condition that society, fractured by the war on the one hand or by war preparations on the other, be repaired. In Syria, this involves the drafting and adoption of a new constitution, as provided for by resolution 2254 four years ago. In Venezuela, this will happen by creating a national unity regime associating Chávistes and patriotic opposition. In both cases, the difficulty is to remove the mercenary opposition who, paid by the United States or their allies, will stop at nothing, and to mobilize the patriotic opposition, always present in the country and concerned with preserving the nation.

With the agreement of President Trump and despite opposition from Pentagon generals and State Department diplomats, Syria and Venezuela advanced on this path on September 16th. On the same day, Iran, Russia and Turkey announced the constitution of the "Syrian Constitutional Commission" [4], and Venezuela announced the opening of a "Dialogue Table" bringing together representatives of the Government and the patriotic opposition [5]. This replaces the negotiations that the constitutional government had conducted in Barbados, in the presence of Norwegian mediators, with the representatives of the self-proclaimed President, Juan Guaidó; negotiations that he had already declared "exhausted" and that he himself had left. Identically, the Syrian Constitutional Commission has put an end to the negotiations that the government had been conducting for years with the "moderate" jihadists under the auspices of the UN.

In Syria, the principle of the National Union has gradually been imposed since the beginning of the war. In 2014, President Assad managed to organize a presidential election in accordance with international standards of democratic regimes. But this is a novelty in Venezuela where all are not yet convinced. A previous attempt at union, initiated by Pope Francis, had failed. This time, in a few hours, the negotiators managed to agree on almost everything claimed by Juan Guaidó, but he refused to act. The Chávists have ceased to practice the empty chair in the National Assembly; the Electoral Commission is undergoing reform; the deputy speaker of the National Assembly, who was detained, has been released; etc.

This considerable advance was made public during the absence of the US National Security Adviser. The replacement of John Bolton by Robert O’Brien favors a new conversation in Washington. The two men have the same ideological references, "American exceptionalism", but opposite styles: the first threatened the whole Earth with war, the second is a professional negotiator.

The European Union and the Lima Group, who do not have the pragmatism of President Trump, condemn these advances because supporters of terrorism are excluded: the "moderate" jihadists and Juan Guaidó’s Guarimberos.

Thierry Meyssan


Roger Lagassé


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