Last week, Pres. Trump said US markets might have to endure some short-term pain if the trade war with China escalates. But never fear, in the long run, everything will be great!
We have to do things that other people wouldn’t do. So, we may take a hit, but you know what, ultimately, we’re going to be much stronger for it.”
Peter Schiff agreed there is going to be short-term pain. And we’re also going to suffer some long-term pain.
Peter wasn’t focusing so much on the trade war, but a scenario certainly exists where Chinese retaliation could lead to some serious long-term pain for the US economy. It could pull out the ace up its sleeve.
The stock market continued its yo-yo ways on Friday. After three straight days of healthy gains, the Dow Jones Industrials fell 572 points to end the week, closing below 24,000. The Nasdaq also plunged, dropping 161 points.
Peter Schiff has been saying for weeks this is a bear market. Well, now even Pres. Trump has said investors may see some short-term pain in the stock market. But the president says it will all be worth it because we will get long-term gain, referring to the benefits we’ll reap when we win the trade war. In his most recent podcast, Peter said that’s not how it’s going to play out.
We’re going to have short-term pain and then the pain is going to get worse in the long-run.”
The big problem is, nobody is really ready for any pain at all.
The trade war is heating up. Could it jump-start a breakout in gold?
Some analysts think so.
China fired a salvo in what could become a full-blown trade war on Monday. The Asian nation slapped tariffs of up to 25% on 128 US products including frozen pork, wine and steel pipes in retaliation for US tariffs levied on Chinese steel and aluminum.
China, Japan and some other countries have a nuclear option they could use in the pending trade war.
If deployed, it could serve as the pin that pops the stock market bubble. At the same time, it could put the US government in a nasty spot as it tries to fund its profligate spending and upward spiraling debt.
What is this nuclear option?
It looks like Donald Trump is launching a full-blown trade war. Not to worry though. According to the president, a trade war is “easy to win.”
When a country is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Peter Schiff has a little different take. He said in his podcast last week winning a trade war isn’t so easy. In fact, America can’t do it.