Category: Global Economy

Canada, US confirm new deal with Mexico updating NAFTA

By Megan Henney, Ken MartinPublished September 29, 2018Trade WarFOXBusiness

President Trump says he rejected a meeting with Canadian Prime Minister Justin Trudeau; insight from White House trade adviser Peter Navarro.

The United States and Canada confirmed Sunday they had reached a deal on a “new, modernized trade agreement,” which is designed to replace the 1994 NAFTA pact.

In a joint statement the two nations said the new deal would be called the United States-Mexico-Canada Agreement (USMCA).

Canadian Prime Minister Justin Trudeau said following a cabinet meeting, “It’s a good day for Canada.”

Trudeau plans to address the media on the deal on Monday.

President Trump tweeted about the deal on Monday morning, calling it a “great deal for all three countries” and that it will open markets to farmers and manufacturers.

“Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico,” Trump tweeted. “The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world. The USMCA is a historic transaction!”

The agreements reportedly boost U.S. access to Canada’s dairy market and protect Canada from possible U.S. autos tariffs.

Trump’s administration has said Canada must sign on to the text of the updated NAFTA by a midnight Sunday deadline or face exclusion from the pact. Washington has already reached a bilateral deal with Mexico, the third NAFTA member.

If Canada did not sign a new deal, Trump had threatened to impose steep tariffs on all automotive imports.

In late August, the U.S. and Mexico negotiated a new pact to replace NAFTA, snubbing Canada in the process. President Trump has also repeatedly suggested that he might leave Canada out of the new agreement — which would be called the “United States-Mexico Trade Agreement.”

Trump blames NAFTA for the loss of American manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade. Markets fear its demise would cause major economic disruption.

Negotiators from both sides spent two days talking by phone as they tried to settle a range of difficult issues such as access to Canada’s dairy market and U.S. tariffs.

As part of any agreement, Canada looks set to offer increased access to its highly protected dairy market, as it did in separate pacts with the European Union and Pacific nations.

Officials have blown through several deadlines since the talks started in August 2017.

Permanent link to this article: http://discerningthetimes.me/?p=9399

Kremlin Backs Turkish Plan to Dump the Dollar and Trade in National Currencies

Erdogan announced Turkey was preparing to conduct trade through national currencies with China, Russia and Ukraine as ties with the U.S. continue to crumble

Reuters

Aug 13, 2018 2:11 PM

The Kremlin said on Monday that Russia favored bilateral trade with all countries in their national currencies, rather than the dollar, but that the idea needed detailed work before being implemented.

On Saturday, Turkish President Tayyip Erdogan announced that Turkey was preparing to conduct trade through national currencies with China, Russia and Ukraine.

The Turkish lira sank to a fresh record low of 7.24 to the dollar in early Asia Pacific trade Monday, as investors continue to worry over the state of the economy and deteriorating ties with the United States amid a diplomatic row over a jailed American pastor.

Asked about Erdogan’s proposal, Kremlin spokesman Dmitry Peskov said Russia had been pushing for such an arrangement with all countries. He said the issue had been raised on more than one occasion during bilateral talks between Turkey and Russia.

Erdogan said on Monday he expected attacks on Turkey’s economy to continue but predicted the lira would return to “rational levels” soon, after the Turkish currency hit a record low of more than 7 to the U.S. dollar.

Erdogan, who has described the lira’s fall as the consequence of a plot rather than economic fundamentals, also said that spreading false news about the economy was treason and recent U.S. actions were a stab in the back against Ankara.

Germany has an interest in a stable Turkish economy and is monitoring the situation closely, a government spokesman said, when asked about the meltdown of the Turkish currency, which has lost more than 40 percent against the U.S. dollar this year.

A spokeswoman for the German finance ministry said there had been no crisis talks among members of the G20 industrialised countries on the situation.

Turkey’s lira has declined sharply this year, largely over worries about President Tayyip Erdogan’s influence over the economy, his repeated calls for lower interest rates, and strains with the United States.

The spokeswoman said it was too early to comment on the exposure of German companies to the economic situation in Turkey, and declined to assess the latest developments there.

 

 

Permanent link to this article: http://discerningthetimes.me/?p=9324

Lira collapses as Erdogan tells Turks: They have ‘their dollars,’ we have ‘our god’

  • Turkish lira hits all-time low versus the U.S. dollar.
  • The country’s economy is viewed as imbalanced due to rampant inflation.
  • The United States has also threatened to impose “big sanctions” over a U.S. pastor.

David Reid | @cnbcdavy

Published 5:17 AM ET Fri, 10 Aug 2018 Updated 11:16 AM ET Fri, 10 Aug 2018 CNBC.com

The Turkish lira has collapsed to an all-time low against the dollar, but the country’s leader has brushed aside concerns, telling Turks “we have our God.” The Turkish President Recep Erdogan then followed those comments up Friday by urging Turks to sell dollars and gold and buy lira.

At around 8:00 a.m. ET Friday, the lira had fallen to $7.081, an almost 11 percent loss for the session. It has since pared some losses. As recently as April one dollar bought about four Turkish lira.

The first wave of selling came early Friday after a Turkish delegation returned from the United States with apparently no progress on the detention of a U.S. pastor. The evangelist, Andrew Brunson, is charged with supporting a group blamed for an attempted coup in 2016.

President Donald Trump said in July that the U.S. would place “large sanctions” on the country for the pastor’s detention. On Friday, Trump appeared to back that position up by posting on Twitter that he would double the level of tariffs on steel and aluminum to 20 percent and 50 percent respectively.

So far there has been no confirmation to CNBC of the policy from the United States Department of Commerce.

Late Thursday, and prior to Trump’s tweet, Erdogan said he would stand up to pressure from the United States.

“There are various campaigns being carried out. Don’t heed them,” Erdogan said Thursday. “Don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now,” Erdogan told supporters.

On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars and gold and buy the lira to help fight a “national struggle”. In response, the currency renewed its sell-off. In his speech in the northeastern city of Bayburt, Erdogan added that he would decisively defend the country against economic attacks.

The lira’s three-month implied volatility gauge hit its highest since late 2008. Implied volatility shows the market’s opinion of the currency’s potential moves. If the implied volatility is high, the market things the currency has potential for large price swings in either direction.

European bank concern

The euro dropped 0.5 percent against the dollar on Friday morning, following reports that the European Central Bank (ECB) is concerned over the impact of a weak Turkish lira on European banks.

According to the Financial Times, the lira’s depreciation could hurt European banks such as Spain’s BBVA, Italy’s UniCredit, and France’s BNP Paribas in particular.

Speaking to CNBC’s “Squawk Box Europe” Friday, Timothy Ash said the FT report was “sensationalist” as any losses incurred by the banks would be by local subsidiary branches who had invested using Turkish lira and not U.S. dollars.

He added however that while banks in Turkey remained in reasonable shape, the country did have a problem with its balance of payments that has occurred because the economy had been allowed to overheat.

“Ultimately now, there is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making. Whatever they do, the market doesn’t believe them,” Ash said.

Economic pressure

Turkey’s economy is seen as particularly fragile due to its high level of debt that is priced in dollars. The more the lira weakens, the more expensive that debt becomes. The latest estimates from the International Monetary Fund (IMF) show that the total amount of Turkish debt payable in other currencies is more than 50 percent of the country’s gross domestic product.

Inflation in the country has been rampant with consumer prices rising almost 16 percent in July alone. While the country’s central bank has raised interest rates in the past to support the currency and quell inflation, the most recent meeting in July saw the Turkish central bank unexpectedly hold its benchmark interest rate at 17.75 percent. Erdogan has repeatedly insisted that rates should not be raised too high, triggering suggestions that the central bank doesn’t act with full independence.

Berat Albayrak, Turkey’s finance minister, is set to reveal “a new economic model” later Friday.

Permanent link to this article: http://discerningthetimes.me/?p=9319

Antifa, Democratic Socialists And The New World Order All Want The Same Thing: “No Borders, No Wall, No USA At All”

August 12, 2018 by Michael Snyder

No matter how globalism is repackaged, it always smells the same way in the end. For decades, the globalists have subtly (or sometimes not so subtly) been moving us toward a world in which national borders have essentially been made meaningless. The ultimate goal, of course, is to merge all the nations of the world into a “one world socialist utopia” with a global government, a global economic system and even a global religion. The European Union is a model for what the elite hope to achieve eventually on a global scale. The individual nations still exist, but once inside the European Union you can travel wherever you want, economic rules have been standardized across the Union, and European institutions now have far more power than the national governments. Liberty and freedom have been greatly restricted for the “common good”, and a giant horde of nameless, faceless bureaucrats constantly micromanages the details of daily life down to the finest details. With each passing day the EU becomes more Orwellian in nature, and that is why so many in Europe are completely fed up with it.

Unfortunately, this is precisely what Antifa, the Democratic Socialists and others on the radical left want to bring to America.

Our high schools and colleges have become hotbeds for “progressive” beliefs, and they are producing millions of young people that have completely and utterly bought into the globalist program. A lot of older Americans simply do not understand that many of these young people want to do away with the United States entirely. To many of us, such a notion is unthinkable, but the idea that the U.S. Constitution and the U.S. government should be done away with is really starting to catch fire among certain circles.

For example, on Sunday Antifa activists were boldly chanting “no border, no wall, no USA at all”

Open borders protesters and members of the left-wing anarchist group Antifa chanted death to America during a counter-protest in Washington, DC, on Sunday.

In a video by Breitbart News’ Ian Mason, Antifa members and open borders activists can be heard and seen marching down streets throughout Washington, DC, demanding an end to the United States.

“No border, no wall, no USA at all!” Antifa and open borders activists chanted.

This is what they actually want.

They want a world without national borders, and they want a world in which the United States has been absorbed into a global socialist entity.

And as far as Antifa is concerned, they would be happy to achieve this goal by peaceful means, but they have also publicly embraced violence if that is what is necessary.

On Sunday, Antifa demonstrators in D.C. were also openly advocating the “overthrow of the United States government”

Antifa and other left-wing groups gathered at Freedom Plaza in downtown Washington, DC, on Sunday carrying signs that reveal one message loud and clear: Remove racist President Donald Trump and Vice President Mike Pence from office and overthrow the United States government.

People passed out “Trump Pence Must Go” stickers and carried signs and banners displaying anti-Trump slogans, including, “Drive Out Trump Pence Fascist Regime.”

You can see some of the protest signs that demonstrators were displaying right here.

Of course Antifa represents a relatively small (but growing) portion of the overall population.

But a movement that represents a whole lot more people is the Democratic Socialists. Thanks to her recent stunning victory in New York, Alexandria Ocasio-Cortez has become their new standard-bearer, and she is publicly calling for the abolition of ICE

Democratic New York congressional candidate Alexandria Ocasio-Cortez explained her belief that abolishing the Immigration Customs Enforcement (ICE) agency is “common sense” during an interview on CNN with John Berman on Thursday morning.

“I think now, we’re starting to realize that ICE — part of that suite of legislation has a structure that allows for civil rights and human rights abuses,” Ocasio-Cortez stated. “And, you know, it may seem like a radical position, but I actually think it is very, very common sense. You know, we should not be separating children from their families.”

But if we don’t have anyone enforcing or protecting our borders, then it would essentially mean that we don’t have any borders at all, and that is precisely what they want.

For Democratic socialists like Ocasio-Cortez, a lack of money is never a concern. They believe that we can completely open up our borders and allow millions upon millions of new immigrants to come pouring in, and that we can also afford to provide free healthcare, free college education, free basic housing and a whole host of other social benefits to them and to everyone else that is already living here.

And even though we are already 21 trillion dollars in debt, somehow we supposedly have the resources necessary to pay for all of this.

I know all of this sounds crazy, but this is what they want, and they are passionate about getting it.

Today, the radical left completely dominates our system of public education, and that is why so many of our young people have become radical leftists. And many of these “true believers” openly talk about a “revolution” in the United States.

Even big stars such as Michael Moore are speaking about “a real insurgency” these days. In his new film, Moore claims that Donald Trump will be “the last president of the United States”, but he doesn’t give any specific details.

So what exactly did Moore mean by that?

Somebody needs to ask him that question.

Sadly, these leftists ultimately don’t want more liberty and freedom.

Instead, they want a world that they can “transform” into their own image. They want a world where free speech is highly censored on the Internet, where your money is taken and “redistributed” to someone else, and where even the smallest details of your daily life are micromanaged “for the good of humanity”.

Ultimately, what they crave is tyranny.

They better be careful what they wish for, because someday they might end up getting it.

Permanent link to this article: http://discerningthetimes.me/?p=9317

Iran’s Rial Nearing Collapse Ahead of Renewed Sanctions

By JNS July 31, 2018 , 5:33 pm

The rich rules over the poor, and the borrower is the slave of the lender. Proverbs 22:7 (The Israel Bible™)

In just four months the value of Iran’s currency, the rial, has dropped by half—now it takes 102,000 rial to buy a dollar—Agence France-Presse reported on Monday. In March, the rial’s value had dropped to the point that it cost 50,000 rial to buy a dollar.

The latest reported drop of the rial comes ahead of expected sanctions to be imposed by the United States on Iran on Aug. 6.

The unofficial rate was confirmed by an anonymous trader to AFP.

The government set an official rate of 42,000 rials for a dollar in April and threatened to crack down on those trading currency on the black markets. But Iranians still wanted to buy dollars, either to preserve their wealth, or even as an investment, as the rial continued to fall.

Bloomberg reported that the continuing devaluation of the rial, already damaged by “from years of sanctions, mismanagement and corruption,” is nearing collapse.

The disparity between the official and actual rates of the rial has allowed importers to “profiteer” by importing goods at the official exchange rate and then selling them priced in rials at the higher unofficial rate.

In a statement released on Monday, Iran’s central bank blamed the economic uncertainty on “plots by the nation’s enemies to create unrest in the economy.”

Last week, the government replaced Valiollah Seif, the governor of the central bank, effectively blaming him for the nation’s economic straits.

Iran has been taking action against those taking advantage of the rial’s fall.

The police have been chasing black-market traders from their bases of operation. The government has also announced the arrests of 29 people for what it calls “disturbing” the nation’s economy and its “money and currency systems.”

Permanent link to this article: http://discerningthetimes.me/?p=9298

Here comes Bilderberg — with talk of populism, U.S. leadership and the ‘post-truth’ world

By Jennifer Harper – The Washington Times – Tuesday, June 5, 2018

In 24 hours, the 66th Bilderberg Meeting begins in scenic Turin, Italy, — a cue for those wary of powerful secrets and/or conspiracies to go into watch mode, seeking proof that a master shadow government is at work and a new world order is afoot somewhere — or words to that effect. Organizers of what is generally described as a “secretive” gathering say 128 learned folk plus economic and political titans from 23 nations are headed for the three-day event — rumored to be staged at the NH Lingotto Congress Hotel, a sleek, historic and moderne spot with views of the Alps and a spectacular rooftop attraction which once involved race cars. The hotel is definitely sold out at the moment.

The event is closed to the squawking press in order to encourage “openness and dialogue” say the ultra-discreet Bilderberg organizers.

They are a helpful bunch, though, supplying a list of the key topics for discussion this year. And here they are, verbatim from the source: populism in Europe, the inequality challenge, the future of work, artificial intelligence, the U.S. before midterms, free trade, U.S. world leadership, Russia, quantum computing, Saudi Arabia and Iran, the “post-truth” world and current events.

The organization is not shy about revealing who’s coming to discuss these things. The attendee list is definitely global and accomplished — full of economists, historians, government officials and academics, among other designations. The names are always interesting. The U.S. contingent includes Henry Kissinger, David Petraeus, Colorado Gov. John Hickenlooper, Wall Street Journal columnist Peggy Noonan and veteran political analyst Charlie Cook. Motley protesters are usually a fixture at the event, but they have not quite surfaced yet. The mission, however, is clear.

“Thanks to the private nature of the meeting, the participants are not bound by the conventions of their office or by pre-agreed positions. As such, they can take time to listen, reflect and gather insights. There is no desired outcome, no minutes are taken and no report is written. Furthermore, no resolutions are proposed, no votes are taken, and no policy statements are issued,” Bilderberg says in its mission statement.

A new survey released Tuesday finds that 68 percent of the public feel worn-out by the volume of news they are exposed to on a regular basis.

“If you feel like there is too much news and you can’t keep up, you are not alone. A sizable portion of Americans are feeling overwhelmed by the amount of news there is, though the sentiment is more common on the right side of the political spectrum,” write Jeffrey Gottfried and Michael Barthel, analysts for the Pew Research Center, which conducted the survey.

“While majorities of both Republicans and Democrats express news fatigue, Republicans are feeling it more,” the analysts said. “Roughly three-quarters (77 percent) of Republicans and Republican-leaning independents feel worn-out over how much news there is, compared with about 6-in-10 Democrats and Democratic-leaning independents (61 percent).”

News fatigue also follows certain patterns, they found.

“Some demographic groups — most notably white Americans — are more likely than others to feel exhausted by the news,” the analysts wrote. “Nearly three-quarters (73 percent) of white Americans express fatigue with the amount of news, much higher than among both Hispanic (55 percent) and black Americans (55 percent). Women are also somewhat more likely than men to feel worn-out (71 percent vs. 64 percent, respectively).”

There’s also a tolerance factor at work. The less you follow the news, the more fatigued you become, the poll revealed.

“While a majority of those who follow the news most of the time (62 percent) are feeling worn-out by the news, a substantially higher portion (78 percent) of those who less frequently get news say they are fatigued by the amount of it that they see,” the analysts said.

Permanent link to this article: http://discerningthetimes.me/?p=9219

Drought Conditions In The Southwest Are So Bad That They Are Already Being Compared To The Dust Bowl Of The 1930s

 

 

May 23, 2018 by Michael Snyder

The worst drought to hit the Southwest in decades continues to grow even worse, and many are already comparing this current crisis to the Dust Bowl days of the 1930s.  Agricultural production is way down, major rivers are running dry, and horses are dropping dead from a lack of water.  The epicenter of this drought is where the states of Utah, Colorado, Arizona and New Mexico all come together, but it is also devastating areas of north Texas, Oklahoma and Kansas as well.  Portions of seven states are already at the highest level of drought on the scale that scientists use, and summer won’t even start for about another two months.  If we don’t start seeing some significant rainfall, it won’t be too long before massive dust storms start devastating the entire region.  The mainstream media is finally beginning to wake up and start reporting on this crisis, and some reporters are choosing to make a direct comparison between this drought and the Dust Bowl conditions during the Great Depression

Drought conditions are so severe across much of the Southwest that they rival those during the disastrous Dust Bowl period of the 1930s, when severe dust storms killed livestock and caused crops to fail.

Oklahoma State Climatologist Gary McManus said some climatological stations in the western part of his state have recorded less than 2 inches of rain since October.

“Some of those stations are pegging the driest 7-to-8 months on record for those locations,” McManus said.

If you are not familiar with the Dust Bowl period, you should be able to find a good documentary online to watch.  It was one of the most painful periods in American history, and we could be right on the verge of a repeat.

Those that have followed my work for an extended period of time know that I have been warning about a return of Dust Bowl conditions, and now it is actually happening.  The flow of the Colorado River is way, way down, and in some areas the Rio Grande has already dried up completely

The drought has hit the Colorado River hard. Forecasters say the river will carry only about 43 percent of its average amount of water this year into Lake Powell, one of two big reservoirs on the system.

In New Mexico, stretches of the Rio Grande — another one of North America’s longest rivers — have already gone dry as biologists have been forced to scoop up as many endangered Rio Grande silvery minnows as possible so they can be moved upstream.

As urban populations have surged, the Southwest has already been dealing with unprecedented water stress, and now this crisis is going to take things to an entirely new level.

Meanwhile, this drought has been hitting farms really hard.  Winter wheat production in some areas will be about half of what it was last year, and this summer some wheat farmers may have to abandon their fields entirely

Yield potential for hard red winter wheat in southwest Kansas and northwestern Oklahoma is roughly half that of a year ago as exceptional drought conditions take a toll on the crop, scouts on an annual tour said on Wednesday.

Some farmers may be forced to abandon their wheat fields due to blisteringly dry growing conditions, adding to woes for those already suffering from declining global demand for U.S. wheat, scouts on the Wheat Quality Council tour said.

The United States has fallen to the No. 2 world exporter, behind top shipper Russia, and U.S. farmers this season planted the fewest wheat acres in a century. Kansas is the top wheat- growing U.S. state and Oklahoma is the fifth-largest producer.

Somewhere around 60 percent of all winter wheat in Texas is being graded “poor” or “very poor”, and Kansas is on pace to have its smallest winter wheat crop in nearly 30 years.

So what is going to happen this summer if we don’t see some substantial rainfall?

Many fear the worst.  In fact, one top expert is warning that agricultural losses in the state of Texas alone this year will be in the “billions”

Home to one of the nation’s most fertile farming areas—crop production in the Texas region alone generates about $12 billion in economic activity—observers say the drought could punish the agricultural sector, affecting everything from cotton to cattle to farming-equipment sales.

“It’s going to be in the billions in terms of crop loss,” said Darren Hudson, director of the International Center for Agricultural Competitiveness at Texas Tech University in Lubbock.

A lot of people don’t get too emotional about crops dying, but when horses start dropping dead that is another thing entirely.

At the top of this article I told you that horses have been dropping dead in the Southwest from a lack of water, and it isn’t just a few.

In fact, one media outlet recently reported the discovery of almost 200 dead horses around a dried up watering hole…

Off a northern Arizona highway surrounded by pastel-colored desert is one of the starkest examples of drought’s grip on the American Southwest: Nearly 200 dead horses surrounded by cracked earth, swirling dust and a ribbon of water that couldn’t quench their thirst. Flesh exposed and in various stages of decomposition, the carcasses form a circle around a dry watering hole sunken in the landscape, CBS affiliate KPHO-TV reports.

And please keep in mind that this is just May.

What are things going to look like once we get to July and August?

This is what a severe drought looks like.  We haven’t seen anything like this since the Dust Bowl of the 1930s, and to be honest the Southwest is completely unprepared for what is about to happen.

Let us pray that rain comes soon, because without sufficient precipitation things could go from bad to worse very rapidly.

Permanent link to this article: http://discerningthetimes.me/?p=9200

Steven Mnuchin Will Head to China as Trade Tensions Mount

By Alan Rappeport and Ana Swanson

April 24, 2018

WASHINGTON — With trade tensions mounting between the United States and China, President Trump said he would dispatch his Treasury secretary, Steven Mnuchin, and other top economic advisers to Beijing next week to try to forestall an all-out trade war.

On Tuesday, Mr. Trump said he was optimistic that the United States could reach a deal with China. But he warned that if the Asian nation did not live up to its promises to open its markets, his administration would proceed with the tariffs he has threatened to impose on as much as $150 billion worth of Chinese products.

“I think China is very serious, and we’re very serious,” Mr. Trump said between meetings with President Emmanuel Macron of France. “We have no choice but to be very serious.”

Mr. Trump said that the United States delegation was making the trip at China’s request and that he was heartened by recent remarks by its president, Xi Jinping, suggesting that he was prepared to open his country’s economy to more foreign investment and ease restrictions on imports of American cars.

The two economic giants have been locked in a tit-for-tat battle over tariffs, with the United States threatening to tax Chinese products like TVs and medical devices and the Chinese retaliating with tariffs on pork and threatening to impose additional penalties on soybeans and other American goods.

Mr. Mnuchin is expected to be joined on the trip by Larry Kudlow, the director of the White House’s National Economic Council, and Robert Lighthizer, the United States trade representative. The delegation comprises a wide range of views on trade, with Mr. Mnuchin and Mr. Kudlow, a former CNBC economic commentator, more receptive to free trade and resistant to draconian tariffs, and Mr. Lighthizer encouraging the president to take a harder line. Peter Navarro, a trade adviser and the author of the book “Death by China,” may also travel with the group, but an administration official said the details were not yet finalized.

Chinese officials have increasingly turned to Mr. Mnuchin as their primary contact in trade talks, which some observers say may stem from China’s perception that he is more sensitive to their concerns. After the formal “economic dialogue” between the United States and China stalled last summer, Mr. Mnuchin has held regular discussions with his Chinese counterparts, including Liu He, China’s new economic minister.

The Chinese view Mr. Mnuchin and Mr. Kudlow, who both previously worked on Wall Street, as potentially more moderate voices who would be more reluctant to start a trade conflict that could damage American businesses and cause stock markets to plunge. They hope the two men will be more sympathetic to offers to open up China’s financial market and reduce its trade surplus by making purchases of American natural gas and other products, people briefed on the deliberations said.

Mr. Navarro and Mr. Lighthizer, meanwhile, have criticized China’s offerings and insisted that the Chinese make more sweeping changes to its economy, including removing industrial subsidies and rolling back government intervention in the economy.

The stakes of the trip are high after months of increasing strain between China and the United States. Fears about a trade war between the world’s two biggest economic powers emerged in March after Mr. Trump unveiled tariffs on global imports of aluminum and steel. The threat of tariffs on up to $150 billion of Chinese imports followed.

Next month, the Treasury Department is expected to release a plan to further restrict Chinese investment in American companies, including industries such as semiconductors and artificial intelligence that are sensitive for national security reasons. The rules could also restrict American partnerships with Chinese companies abroad.

China has not taken such threats lightly. In recent weeks it has hit back with its own threats, raising concerns among farmers and businesses in the United States that the escalating dispute could be a drag on the economy and blunt the effect of the tax cuts Mr. Trump signed into law in December.

But Mr. Xi has also signaled that he is open to negotiating with Mr. Trump. He said this month that China would reduce its tariffs on autos, which Mr. Mnuchin called “a big step in the right direction.”

While some trade experts warned that China has failed to deliver on such promises before, Mr. Trump insisted on Tuesday that he was encouraged about the possibility of a deal.

“President Xi made a speech four days ago where he said that China is going to be opened up,” Mr. Trump said. “Because it’s not opened up right now. They trade with us. We can’t trade with them.”

Some China analysts were not so impressed by Mr. Xi’s speech. “I thought it was a bunch of warmed-over repetition of things we had heard before,” said Scott Kennedy, a China analyst at the Center for Strategic and International Studies. “For me, the concern is that the level of mixed messaging that we’re sending the Chinese makes them expect that they can get through this with a very limited offer.”

Edward Mills, a public policy analyst at Raymond James Financial, said he still viewed negotiations that averted tariffs as the most likely outcome. That could include, for example, China promising to reduce tariffs on American cars, open up its financial sector and drop rules that require American companies to partner with Chinese firms in many industries. But the negotiations could drag out for months, damaging business relations.

Mr. Trump “hasn’t actually identified what he wants as the end game” of the negotiations, Mr. Mills said. “I think that is something that gives a lot of flexibility to Mnuchin and the president to declare a number of things as a victory.”

Some veterans of trade talks with China caution that Mr. Trump’s approach could backfire.

“I think that it’s very dangerous to get into a tit-for-tat war in trade, because even if your goal is to be moderate and proportional in response, one thing can lead to another and it can get out of control,” Jacob J. Lew, the Treasury secretary under President Barack Obama, told CNBC last week.

However, Paul H. O’Neill, who was President George W. Bush’s first Treasury secretary and traveled to China for talks in 2001, said it was a good sign that the American delegation was making the trip. Negotiations with Chinese officials tend to be well choreographed, he said, so it is likely that the dimensions of a trade agreement are starting to take shape.

“There’s already been endless conversations, and tweets, from our side,” Mr. O’Neill said in an interview. “They are shadow dancing with each other, but behind the scenes where we can’t see what is going on, apparently they are making some progress.”

Permanent link to this article: http://discerningthetimes.me/?p=9147

Drought Returns to Huge Swaths of U.S., Fueling Fears of a Thirsty Future

  • April 17, 2018
  • By David Montgomery

Residents line up in February to fill plastic water bottles and containers at a natural water spring on the site of a local brewery in Cape Town, South Africa. As a waterless Cape Town has become a potential reality, its story has sparked new concerns over the growing scarcity of the planet’s most basic resource.

AUSTIN, Texas — Less than eight months after Hurricane Harvey pelted the Texas Gulf Coast with torrential rainfall, drought has returned to Texas and other parts of the West, Southwest and Southeast, rekindling old worries for residents who dealt with earlier waves of dry spells and once again forcing state governments to reckon with how to keep the water flowing.

Nearly a third of the continental United States was in drought as of April 10, more than three times the coverage of a year ago. And the specter of a drought-ridden summer has focused renewed urgency on state and local conservation efforts, some of which would fundamentally alter Americans’ behavior in how they use water.

In California, for example, officials are considering rules to permanently ban water-wasting actions such as hosing off sidewalks and driveways, washing a vehicle with a hose that doesn’t have a shut-off valve, and irrigating ornamental turf on public street medians. The regulations, awaiting a final decision by the California State Water Resources Control Board, were in force as temporary emergency measures during part of a devastating five-year drought but were lifted in 2017 after the drought subsided.

Water restrictions, either forced or voluntary, are nothing new to states and communities where battling drought is often a part of life. In Amarillo, Texas, the city’s water department stresses conservation with the message, “every drop counts,” and urges customers to do “at least one thing a day to save water.” A similar mantra — “squeeze every drop” — is part of the water-saving culture in Oklahoma City, where officials enforce mandatory lawn-watering restrictions and impose higher rates for excessive water use.

Years of studies by government and environmental groups have warned that future demand for water is threatening to outstrip availability, particularly in the drought-plagued West and Southwest, unless policymakers take steps to reverse those trends.

“More and more cities around the world are running into limits on how much water they have available to meet their needs,” said Peter Gleick, co-founder of the Oakland-based Pacific Institute and an expert on water and climate issues.

To understand the potential dangers, U.S. officials might look halfway around the world, to parched Cape Town, South Africa, where residents this year faced a crisis that seems straight from science fiction. After three years of drought, the city of 4 million spent months united in a struggle to fend off Day Zero, when Cape Town was projected to become the world’s first major urban center to run out of water.

Residents skimped on dishwashing and laundry, took minishowers, washed their hands with sanitizer, flushed the toilet with leftover shower water, and made numerous other sacrifices to daily routines. The objective: to cut individual water consumption to 50 liters a day, or 13.2 gallons, far below the U.S. average of 80 to 100 gallons. Hundreds queued up for daily water rations as the city deployed law enforcement officers — widely dubbed “the world’s first water police” — to enforce restrictions.

The day of reckoning was originally expected to fall in mid-April, but was postponed to May and then to June.

The draconian conservation campaign had enabled Cape Town to proclaim at least partial success in March when it pushed back Day Zero to sometime in 2019. But the executive deputy mayor, Ian Neilson, said the city is still in crisis mode until it completely replenishes its water supplies.

Cape Town Scenarios in the U.S.?

The picture of a coastal metropolis going without water once seemed inconceivable. But as a waterless Cape Town has become a potential reality, its story has sparked new concerns over the growing scarcity of the planet’s most basic resource.

U.S. government and environmental experts generally agree that no major city is in imminent danger of the kind of scenario confronting Cape Town. But residents in some small communities have struggled, and at the same time, U.S. experts worry that protracted global warming, worsening droughts, vanishing groundwater and growing populations will erode future supplies and make Americans increasingly vulnerable throughout the 21st century.

One critical water resource threatened by shortages is the Colorado River System, which includes parts of seven states and provides water for up to 40 million people. In the absence of “timely action to ensure sustainability,” the U.S. Bureau of Reclamation said in a 2012 assessment of the river basin, “there exists a strong potential for significant imbalances between water supply and demand in coming decades.”

Lake Mead, a reservoir sprawling 120 miles behind the Hoover Dam in Nevada, is less than half full after years of drought. The reservoir, which is part of the Colorado River System, serves nearly 25 million people in Nevada, Arizona and California.

Burgeoning population growth is also straining water resources. The Texas Water Development Board has authorized $6.2 billion in financing for 48 municipal and regional projects after state water planners warned that the population of the second-most-populous state would grow by 70 percent over the next 50 years. Available water supplies were projected to fall by 11 percent during that same period without new investment.

The Environmental Protection Agency, in a January 2017 snapshot of the impact of climate change, predicted that the Southern Plains will face more “extreme heat” in the future, saying that the number of days of 100 degrees or hotter will quadruple by 2050.

“Increasing temperatures and more frequent and severe droughts,” the EPA said, “are expected to heighten competition for water resources for use in cities, agriculture and energy production.”

Adding to America’s water insecurity is a decadeslong decline in groundwater resources, which supply half of the nation’s residents and nearly all of its rural population, according to the U.S. Geological Survey.

Sustained groundwater pumping has steadily taken its toll on aquifers throughout the country, lowering groundwater levels by hundreds of feet in some places. Water levels in the High Plains aquifer system, which underlies parts of eight states, have dropped by more than 100 feet in places, largely as a result of extensive irrigation, according to the USGS.

“As more wells and deeper wells have been drilled to access groundwater, it exacerbates the groundwater level decline and there is often no way to get that back,” said Breton Bruce, a scientist with USGS in Denver. “Basically, we are pumping groundwater faster than it recharges.”

Large sections of the United States are all too familiar with drought and its devastating impact on both surface and groundwater. Over the past decade, Texas and California endured — and are still recovering from — record multiyear droughts that plunged lake levels, killed millions of trees, and cost billions of dollars in lost crops and livestock. Georgia went through four droughts from 1998 to 2016. Arizona has been confronting drought throughout the 21st century.

Two small communities, East Porterville in California and Spicewood Beach in Texas, drew national attention during their states’ droughts after their wells ran dry and outsiders came to the rescue with water deliveries. As many as 30 other Texas communities came close to running out of water during the drought, according to press reports.

“Things were grim. I didn’t get water for 20 months,” recalls Jim Burr, a peace justice and 33-year resident of Terlingua, a small community of about 800 people in the remote Big Bend region of Texas. After his 16-foot-deep well ran dry during the height of the last drought, Burr was forced to dig another that extended 45 feet deep.

The E.V. Spence Reservoir near the town of Robert Lee in West Texas ran so dry in 2011 that there were fresh water stations for residents. Texas droughts are expected to have long-term environmental and financial impacts. Many state officials worry about how U.S. cities will handle extreme drought.

Water Policy Is Fraught With Conflict

The latest wave of droughts has descended on more than a dozen states across the country. The largest band stretches across the Southwest and includes parts of southern California, Utah, Arizona, Colorado, New Mexico, Kansas and the panhandles of Texas and Oklahoma. Pockets of drought are also in the Northern Plains, including parts of Montana and the Dakotas, and the southeastern states of Georgia and South Carolina.

Brian A. Fuchs, associate geoscientist and climatologist at the National Drought Mitigation Center at the University of Nebraska-Lincoln, said the Southwestern drought that started in October is “the most intense significant drought area that we have going on right now.” The ultimate impact, he said, depends on how long it lasts. For now, he added, “the jury is still out.”

“It’s one of those situations where time is definitely going to tell,” he said. “If we see conditions continue to worsen over the next six months without any improvement, the situation is going to be a lot more significant than where we’re at right now.”

Most of the states on the front lines of the current drought already have spent decades shoring up their defenses, operating on a proven regimen that whenever one drought ends, another is lurking not far in the future. But at the same, the search for effective state water policy also has been fraught with conflict, often displaying the competing interests of agriculture, property owners, big cities, small communities, energy developers, conservationists and environmentalists and a host of others. Solutions never come easy.

“Water is fundamental to all the interests,” said Luke Metzger, executive director of Environment Texas, “and, at times of scarcity, it can be a feeding frenzy, where all the interests are competing for a finite supply.”

Water necessity has also led to innovation. Two Texas cities — Big Spring and Wichita Falls — have drawn accolades from environmentalists with projects to recycle waste water into potable water. In 1980, Arizona enacted what has widely been hailed as a pioneering initiative with its Groundwater Management Act, which, among other things, required new developments to prove they could assure enough water to last 100 years.

“Arizona has had a longtime history of marshaling its water forces,” said Doug MacEachern, communications administrator for the Arizona Department of Water Resources. MacEachern said the state uses less water overall today than it did in 1957 when there were at least 5 million fewer people.

California has also produced an array of water-saving initiatives, including enacting its version of a groundwater management act in 2014. The same year, Californians approved a $7.5 billion bond package on water projects that included expanding water storage, protecting rivers and lakes, bolstering groundwater sustainability and water recycling. In June, voters will be asked to spend another $4.1 billion for initiatives that include water infrastructure and flood protection projects.

“We’re running fast to try to make ourselves resilient for the long term,” said Felicia Marcus, who chairs the California State Water Resources Control Board.

In Texas, memories of destructive droughts and fears of future water shortages prompted voters in 2013 to create the State Water Implementation Fund for Texas (SWIFT) to help ensure abundant water supplies through 2070. The initiative empowered the Texas Water Development Board to authorize low-interest loans and other incentives to finance municipal and regional projects envisioned under the state’s long-range water plan.

“In general, there’s enough water for the projected future population … if we do it right,” said Janice Bezanson, executive director of the Texas Conservation Alliance. She acknowledges the potential of “case by case” shortages in small communities, but said that the state is “planning far enough in the future” to assure its cities of sufficient water resources.

The Texas plan calls for the creation of 26 new reservoirs as well as for other initiatives: recycling, an expanded push for desalination and replacing infrastructure to get rid of aging, leaking pipelines blamed for water loss. Some of the proposed new reservoirs have ignited a fierce pushback from landowners and conservationists, who say new lakes would threaten farm and ranch land, endanger wilderness areas, and encroach on wildlife habitat.

Meanwhile in Cape Town, Executive Deputy Mayor Neilson said the race against Day Zero has fundamentally redefined the city’s water strategies. Officials there, too, want to find alternatives.

The city, which doesn’t have a reliable source of groundwater, draws its supplies almost exclusively from surface water in its six major reservoirs. Neilson said officials have learned that they’ll need to diversify their water supply to other sources: groundwater where possible, along with water re-use and desalination.

And what about Day Zero? Neilson said the city is placing its hopes on good fortunes from the upcoming rainy season as well as quick steps such as building temporary desalination plants, which would eventually be followed by permanent plants.

City officials will then reassess toward the end of the year, he said.

“You start off from having years of luxury and having plentiful water,” he said. “You have certain behaviors that you develop, and you then have to teach yourself to do things differently.”

Permanent link to this article: http://discerningthetimes.me/?p=9136

‘New world order’ could stem from US-China trade battle

  • A tit-for-tat trade standoff between the U.S. and China has fueled market fears that the dispute could soon spiral into a full-blown trade war.
  • “The signal must be there is a new order emerging, and how that new order emerges will depend upon the wisdom, the patience and the understanding of the top leaders,” Andrew Sheng, chief advisor at China’s Banking Regulatory Commission, said Friday.
  • Sheng added he was hopeful of a positive outcome given that the world wants to see “a sensible and measured way of negotiations.”

Sam Meredith | @smeredith19

Published 7:12 AM ET Fri, 6 April 2018 CNBC.com    

A trade showdown between the world’s two biggest economies could be the flashpoint for a new international order, according to the chief advisor of China’s Banking Regulatory Commission.

A tit-for-tat trade standoff between the U.S. and China has fueled market fears that the dispute could soon spiral into a full-blown trade war. Washington and Beijing have been embroiled in escalating tariff threats since early March — with market participants concerned about the potential impact of an ensuing trade war.

“The signal must be there is a new order emerging, and how that new order emerges will depend upon the wisdom, the patience and the understanding of the top leaders,” Andrew Sheng, chief advisor at China’s Banking Regulatory Commission, told CNBC’s Steve Sedgwick on the sidelines of the European House Ambrosetti Forum in Italy Friday.

When asked whether he was optimistic about the prospect of political leaders finding an effective solution to the world’s problems, Sheng replied: “I think so … We are now seeing a much more complex, much more subtle (and) much more nuanced search for the new order.”

‘Sensible and measured’

Late on Thursday, President Donald Trump instructed the U.S. Trade Representative to consider $100 billion of additional tariffs on Chinese goods. The further charges were being proposed “in light of China’s unfair retaliation” against prior U.S. trade actions, Trump said in a statement.

China on Wednesday announced it would introduce tariffs on 106 U.S. products, including soybeans, cars and whiskey. The duties were introduced as a retaliatory measure against Trump, who just 24 hours prior, had unveiled a list of Chinese imports he planned to target with tariffs.

Sheng said the world was finally getting to grips with the “massive labor shock” brought about by globalization. And while Sheng said the ongoing trade dispute between the U.S. and China was a “very confusing situation,” he added that he was hopeful of a positive outcome given the world wants to see “a sensible and measured way of negotiations.”

Permanent link to this article: http://discerningthetimes.me/?p=9128