An Explanation of Why the “VERY BIG DEAL with China” was No Big Deal

why the US China Trade deal is meaningless

In my last free newsletter, to which you can subscribe here, titled, “Donald Trump Has Become the New Jerome Powell”, I explained why the “VERY BIG DEAL with China” was no big deal at all, even before the deal was announced. I stated the following about US President Trump’s tweet the preceding day about an imminent and pending VERY BIG DEAL with China: “the reason I’m so confident that there is no [real] trade deal on the table at the current time that is close to being consummated is that only two weeks ago, the only potential deal that was available was a deal called a Phase 1 deal, meaning that a trade deal would consist of multiple phases, so at best, only a partial deal was possible within a few weeks’ time.” Just to ensure there was no ambiguity in my opinion about Trump’s coming big deal announcement, I stated, “any announcement of a ‘VERY BIG DEAL’, as Trump described it, would be completely duplicitous, as a very watered down deal is the only deal that is possible in the imminent future.”

I published this story on the evening of the 12th in the US and in the late morning of the 13th in Asia. About sixteen hours later after I declared Trump’s preliminary announcement as a complete farce solely designed to juice US markets higher, and that the announcement of a big deal would be a hollow boast of all flash and zero substance, the headlines that followed, in independent US media about this same topic, all mimicked my earlier declaration. Other news sites, after the deal was announced, rushed to publish articles titled, “Why China Trade Deal Remains a Farce” and “The Farce of the Deal” that basically reiterated the very points I had published much earlier in the day, while mainstream news sites like The Diplomat lauded the deal by declaring “The US-China Trade Deal is Finally Here”.

There are some indicators that will expose the market’s beliefs behind such headlines, such as the price behavior of the US stock market following the announcement of the “trade deal”.  If the market really believed that the trade deal was significant and real, as reported by mainstream media, then the US stock market would have skyrocketed higher if market participants truly believed the mainstream media headlines. Instead, the market went nowhere, and if it declines this week, this behavior will further confirm that market participants also believe the trade deal announcement was a farce. For truthful and real market analysis first, before  any other news site, follow my blog here.

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