Trade wars always have a currency effect, but I think currencies are probably going to be less affected by the trade war than the actual productivity of the countries and their sales. –John Mauldin
As the trade situation intensifies between the US and China, it’s time to think about the ripple effects of a decoupling. For example, will a trade war turn into a currency war, where nations drive down their currencies to counteract US tariffs?
Will China use its cache of US treasuries as a weapon, driving US interest rates up? Many are circulating this theory, but John and others say no, that would be fiscal suicide for China.
Regardless of your view, I’ve always felt it important to consider a variety of viewpoints. While I am always confident, I’m often wrong. Any honest market analyst should admit to this.
Some prefer to sit in a soundproof box, sticking to their opinions. That makes for great newsletter sales, but it is not my style. I want to hear from others whom I respect and who constantly challenge my assumptions.
As investors, it’s better to be right in your portfolio than on paper—or in a video or newsletter. It’s OK to change your mind in the face of new evidence and arguments.
There is no better opportunity to challenge your assumptions than by tuning in (online) to our upcoming Strategic Investment Conference beginning May 12. We are bringing a slew of geopolitical, economic, and investment analysts with opposing views. You’ll hear their best arguments along with their evidence, so you can make the best decisions for your portfolio and your future.
You can learn more here—John Mauldin and I will be your humble co-hosts. We hope to see you there.
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I caught up with John earlier this week on camera. Click the image below to watch our interview where we discuss:
Tariff exemptions for industry giants like Apple
How US production shifted to higher-value goods
Margin calls that panicked bond markets
The boy who cried “bond vigilante”
Should we eliminate the trade deficit?
A transcript of my interview with John is available here.
And thank you, Global Macro Update readers, for your support.
