Skip to main content

The World In Which We Live: Ongoing Trade War Edition

It wasn't supposed to last this long. Or so it was thought.

"Trade wars are good and easy to win!" the tweet read. I'm not seeing much good and no one appears to be having fun.

I suppose a trade war is good when you have no skin in the game, ie your living expenses are covered by taxpayer dollars and you know how to write down losses, but for those of us on the ground in this trade war, real pain is being inflicted. Ask the farmer who is losing money (although in a bit of welfare, there are subsidies being discussed). Ask the customer paying more and more for the same items. Ask the business owner paying more for said items and passing that cost on to the customer you just spoke to.

The current trade war is the economic equivalent of the second Iraq War: a war of choice, led by amateurs. Sure, US-based intellectual property is being stolen, but the companies whose IP is being stolen are multinational corporations who operate in China willingly. I'm yet to meet an independent software developer whose IP is being stolen, and if I did, I"m certain there wouldn't be a trade war to protect it and pursue damages.

"Trump is repricing access to the American consumer," some say. That's a fair assessment, but at what cost? Will there be an easing of price once the dispute is settled and the tariffs lifted, or will prices remain the same because this went on so long that no one remembers a time when costs were 25% lower?

This is the world in which we live. Hedge accordingly.

Comments

Popular posts from this blog

Quote Of The Day, Taleb Edition

It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes. This is apparent from a social pathology: psychopaths rally followers. - Nassim Nicholas Taleb

The World In Which We Live: Praetorian Edition

Serial child rapist and all around weird guy has died while in custody. Alleged cause of death is suicide by hanging, but needless to say, not everyone is buying it. And by "not everyone," I mean a great many people, some famous and well-respected in their fields, who preface their opinions with "I'm not a conspiracy theorist but...". Go to Twitter in you need further evidence.

The question of how did a man on suicide watch (with one failed attempt under his belt) successfully commit suicide in one of the most secure holding units in America?

As has happened so many times throughout history, the parties responsible for protecting were off duty or stood down. I call this the Praetorian Pattern.

The Praetorian Guard was a unit responsible for guarding the Roman emperor. Formed by Augustus to act as personal protection, the unit lasted for three centuries, during which time it developed a pattern of intrigue and interference with Roman politics, capable of underm…

Quote Of The Day, Picasso Edition

I do not seek. I find. - Pablo Picasso