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“Donald Trump triggers prospect of global trade war over ‘reciprocal’ tariff plan – increasing risk of tensions and inflation.
“Donald Trump has ordered his team to start calculating duties by early April – increasing fears of a global trade war that could also accelerate US inflation.”
“US inflation surge dampens Fed rate cut odds.
“US inflation came in well ahead of expectations, prompting the market to dramatically reprice the prospect of rate cuts. Potential tariffs add upside risk to inflation in coming quarters.”
https://think.ing.com/snaps/us-inflation-surge-dampens-fed-rate-cut-odds/
“The world is underestimating the risk of a US recession…
“Last year, US federal government borrowing reached close to 7pc of GDP… Recessionary levels of borrowing at full employment are helping to pump up domestic economic activity and fuel a bubble in stocks.”
https://www.telegraph.co.uk/business/2025/02/13/the-world-underestimating-risk-us-recession/
“Americans are finding it harder and harder to pay off their debt…
“The share of households becoming seriously delinquent (a missed payment for 90+ days) on their auto loans and credit cards are at 14-year highs… “The news about auto loan delinquencies is troubling,” Matt Schulz, chief credit analyst at LendingTree, said…”
https://edition.cnn.com/2025/02/13/economy/us-household-debt-credit-q4/index.html
“‘No signs of slowing’: US egg prices soar as avian flu rips across farms.
“US egg prices are soaring to record highs as farmers are forced to slaughter millions of chickens in an attempt to halt the spread of bird flu, which has ripped through the nation’s poultry barns in recent months.”
https://www.ft.com/content/6badcd10-c9b6-4067-8943-7199ad332cbb
“Top bank regulator halts Basel endgame implementation amid tariff uncertainty [Canada].
“Canada’s top bank regulator has indefinitely paused implementation of a key plank of the post-financial crisis reforms and is considering other relief measures to help banks manage any fallout from a trade war threatened by the United States.”
“‘Let’s not forget the pain of the 2008 crisis in pursuit of growth,’ warns Andrew Bailey [Governor of Bank of England]…
“In a thinly veiled response to chancellor Rachel Reeves’s push to loosen the constraints brought in over the past 17 years, Andrew Bailey said that it was important not to forget the damage to the economy caused by the implosion of the global financial system.”
“Anti-government protest halts air traffic in Belgium.
“Thousands of Belgians took to the streets on Thursday in protest over the new government’s planned pension reforms in the first day of a multi-day strike that halted all air traffic in the country… The strike was also expected to disrupt public transport and postal services…”
https://www.reuters.com/world/europe/anti-government-protest-halts-air-traffic-belgium-2025-02-13/
“Germany’s economy will probably shrink for a third year in 2025, according to the German Chamber of Commerce and Industry.
“A survey of about 23,000 companies across all sectors and regions of the country showed that “significantly more firms continue to expect worse business than better,” the lobby group — known as DIHK — said in a statement on Thursday.”
“Germany’s economic crisis is weighing on Central Europe.
“The stagnation of the continent’s leading economy is catching up with the region, which has long served as its subcontracting base. The Czech Republic in particular… “When Germany catches a cold, the rest of Europe falls ill,” said Guy Maugis, president of the Franco-German Chamber of Commerce and Industry.”
“Munich car attack jolts German election as politicians amp up migration rhetoric.
“An attack on a trade union demonstration on Thursday by an Afghan asylum seeker is rocking the campaign race for Germany’s election on Feb. 23 that has already been shaped by fierce debates over migration.”
https://www.politico.eu/article/munich-car-attack-germany-election-migration/
“Austria’s political crisis deepens as far right fails to form government…
“The ÖVP first attempted to form a three-party coalition with the Social Democrats and the liberal NEOS, then a two-party coalition with the Social Democrats – but both efforts collapsed.”
https://www.bbc.co.uk/news/articles/c78x3klx4rjo
“German navy rattled by Russian sabotage on new corvette…
“The inspector of the German navy, Vice Admiral Jan Christian Kaack, confirmed successful acts of sabotage on several German ships, including the newest corvette Emden, which has not yet been commissioned. “This is an attempt by Russia to test Germany’s defence capabilities.””
“Moldova shuts down Russian cultural centre following military drone incursions…
“Moldovan authorities announced on Thursday that overnight, between Wednesday and Thursday, multiple drones crossed into Moldovan territory following a large-scale drone attack on Ukraine’s Reni port, near the borders of Moldova and Romania…”
“Chernobyl nuclear plant hit by explosion, IAEA says…
“An explosion caused a fire overnight at the site of the former Chernobyl nuclear power plant in northern Ukraine, the International Atomic Energy Agency (IAEA) said Friday.”
https://www.dw.com/en/chernobyl-nuclear-plant-hit-by-explosion-iaea-says/a-71603488
“Russia and Ukraine Trade Blame for Disrupting IAEA Staff Rotations at Zaporizhzhia Nuclear Plant…
“Moscow’s troops seized the facility, Europe’s largest nuclear power station, in the first days of its invasion of Ukraine. Since then, both sides of the conflict have repeatedly accused the other of risking a potentially devastating nuclear disaster by attacking the site.”
“US defence secretary signals dramatic shift in American military policy away from Europe, warning allies about ‘stark strategic realities’.
“The US Secretary of Defence Pete Hegseth tells allies that, with Donald Trump as US president, it is “unrealistic” to think Ukraine can return to its pre-2014 borders and America must focus on the threat posed by China and securing its own borders.”
“US could send troops to Ukraine if Russia doesn’t seek peace with Kyiv, Vance says.
“Vice President JD Vance warned on Thursday that the United States could send troops to Ukraine and hit Russia with further sanctions if Vladimir Putin doesn’t negotiate a peace deal in good faith.”
https://edition.cnn.com/2025/02/14/politics/jd-vance-us-troops-russia-ukraine-intl-hnk/index.html
“Pentagon says North Korean missiles that can hit US may soon be in production…
“Guillot’s comments are likely to bolster arguments by missile defence advocates to bankroll President Donald Trump’s pledge to create an all-encompassing “Iron Dome” umbrella to protect the US from attack.”
“China’s war games near Taiwan could be used to conceal attack, US says.
“China’s military exercises around Taiwan have become so extensive that they could soon be used as a “fig leaf” to conceal an attack on the island, according to the top US military commander in the Indo-Pacific.”
https://www.ft.com/content/3a31c037-f74c-4e33-9720-0fdc32f5133b
“Tensions with the West are fuelling China’s anxiety about food supplies…
“…as the contest with America and other Western countries has intensified, China has become ever more preoccupied with maintaining food security, stressing that it is a vital component of national security. In 2023 China published a book of Mr Xi’s thoughts on the topic. Last year the country introduced its first food-security law.”
“She said no: marriages in China plummet to record low…
““Collapsing marriage rates reflect a convergence of social forces: a declining population of young adults, a darkening economic outlook for recent graduates, changing attitudes towards marriage, and escalating gender polarisation between men and women,” said Carl Minzner…”
https://www.theguardian.com/world/2025/feb/12/china-marriage-statistics-plummet-record-low
“Iran is rearming its missile program and a ship of supplies just arrived from China, Western sources say…
“The sodium perchlorate could allow for the production of sufficient propellant for some 260 solid rocket motors for Iran’s Kheibar Shekan missiles or 200 of the Haj Qasem ballistic missiles, according to the intelligence sources.”
“Arab mediators scramble to save Gaza ceasefire as Israel bolsters troop numbers…
“The crisis… escalated sharply after Trump responded to Hamas’s delay by threatening “hell is going to break out” unless it released all of the Israeli hostages it was holding on Saturday.”
“Syria’s leader, Russia’s Putin make first contact since al-Assad’s fall…
“Rebels led by al-Sharaa’s Hayat Tahrir al-Sham group ousted Moscow’s close ally in December after a lightning offensive, and questions have remained over the fate of Russia’s two military bases in the war-torn country.”
“Sudan says plan for first Russian naval base in Africa will go ahead…
“If the agreement is implemented, Russia would join the US and China in the region; they have bases to the south in Djibouti. The announcement came during a visit by the foreign minister, Ali Youssef Ahmed al-Sharif, to Moscow…”
https://www.theguardian.com/world/2025/feb/13/sudan-first-russian-naval-base-in-africa-go-ahead
“Iran Forges Deeper Ties With Sudan in Boost to Wider Influence.
“Iran and Sudan agreed to cooperate in the fields of mining, banking and livestock production, the Sudanese Foreign Ministry said, stoking concerns the Islamic Republic is widening its influence on the fringes of the Middle East.”
“Dispatch: Children reduced to skin and bones in war-torn Sudan’s forgotten famine…
“The Telegraph gained rare access to the Nuba mountains, a remote area of Sudan controlled by an indigenous rebel group known as the Sudan People’s Liberation Movement-North (SPLM-N). Some four million people are now sheltering here and hunger is everywhere you look.”
“Fighting in Africa’s mineral-rich DRC killed over 3,000 in less than 2 weeks. Here’s how your phone plays a part…
“…the war-riven country is endowed with vast mineral wealth, including the world’s largest reserves of cobalt and coltan – both critical to the production of electronics… “Access to natural resources is at the heart of this conflict,” Jean Pierre Okenda, an analyst…”
https://edition.cnn.com/2025/02/12/africa/fighting-drc-congo-minerals-phone-intl/index.html
“Richest nations ‘exporting extinction’ with demand for beef, palm oil and timber…
“Most wildlife habitats are being destroyed in countries with tropical forest, according to the study which looked at how wealthy countries’ demand for products such as beef, palm oil, timber and soya beans is destroying biodiversity hotspots elsewhere.”
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You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
“US inflation came in well ahead of expectations, prompting the market to dramatically reprice the prospect of rate cuts. Potential tariffs add upside risk to inflation in coming quarters, but there are some encouraging signs that housing costs will slow meaningfully later in 2025 and keep the door open to the second half of the year cuts we are forecasting”
If the Fed cut SHORT term rates now or second half, LONG term rates would soar due to rising inflation expectations > which are necessarily baked in to trade war both now and later > which is already here due to the indirect effects of net energy decline intensifying geopolitical contradictions. Scott Bessent seems to understand this at least partially but apparently unable to explain it to his boss :(. On the other hand, more trade war will eventually cause inflation to plummet except… not quite as advertised.
Reading the news these days is like solving polynomials.
Jupiviv, it certainly can be, although the overarching narrative is of course very simple, namely that the global economy is reaching the limits to growth.
Tim Morgan’s penultimate offering, looking at Trump’s tariffs, is well worth a read, as it offers some helpful context:
“Looking at the economic performance of the United States in recent years, SEEDS analysis reveals that aggregate economic prosperity increased by only 2.2% between 2019 and 2024. This was below the rate of increase in population numbers between those years (+2.5%), such that the average American was slightly less prosperous last year than he or she had been back in pre-pandemic 2019…
“…systemic inflation had been severely under-reported. According to the GDP deflator, inflation across US the economy compounded at 3.7% annually between 2019 and 2024. But RRCI – the SEEDS measure of comprehensive inflation – put this at 5.7% between those years… [and] most of the reported “growth” in American GDP was sleight-of-hand, created by the spending of vast amounts of money borrowed by the government.
“…Politically, the public will continue to demand the ”growth” that no political party can deliver, and this is sure to cause an intensification of instability. And this is where Mr Trump’s tariffs fit in… If internally-generated growth has become impossible, the next best thing is to try to insulate national economies from the cold winds of involuntary economic contraction.”
https://surplusenergyeconomics.wordpress.com/2025/02/03/298-energy-not-money-the-sequence-unfolds/
I agree but any large country in a global economy trying to insulate itself implicitly assumes no other large country doing the same. If everyone does it – literally halts trade – there is no economy. The US’ position at the centre of world trade that allows it to pretend to do so as a cover for securing better (more one-sided) terms of trade. The actual result is, of course, multipolarity = geopolitical blocks/trade war.
I think Trump’s assumption is that he wields such a big stick in the US economy that trading partners can be cowed into concessions. But of course you are right – there is certainly a chance that it snowballs into a free-for-all:
“Maurice Obstfeld, senior fellow at the Peterson Institute for International Economics, warned that other countries could retaliate if Trump doubled down on various levies. “The more major countries retaliate, the more other countries will be tempted to join in,” he told AFP.”
https://www.france24.com/en/live-news/20250212-what-are-reciprocal-tariffs-and-who-might-be-affected
That sort of dog-eat-dog, survival-of-the-fittest scenario may not halt international trade per se but it would certainly curtail it by making it less efficient and more expensive, in turn heightening the risk of financial crises.
“Faster than expected” is the motto over on r/collapse. But I thought we had more time until a full blown worldwide economic recession would occur. Not decades but at least several more years.
Things are certainly amping up, uhh even faster than expected. I didn’t think Trump could do this much damage so quickly. The speed at which he is taking everything down is surprising.
Nor did I realize Elon had such a tight hold over him. Elon loves setting fires. He doesn’t know much about improving or maintaining economic ecosystems, but he can burn things down. His techno feudal plans will come into existence just like any of his big schemes did. He is very good at promising and not delivering. I don’t expect him to actually accomplish his goals, but he will surely cause maximum chaos trying.
“I didn’t think Trump could do this much damage so quickly.”
He has certainly hit the ground running, Nat. As I’ve said before, he and his administration strike me as being akin to a hand-grenade going off in current affairs, sending out shockwaves cultural, economic and geopolitical. It all feels very labile and turbulent.
For the sake of the world’s safety and America’s freedom, I can only hope Musk’s plans crash and burn.
Be on the lookout for any suspicious new cities popping up in previously desolate parts of America. That’s where his techno-feudal plans are most likely to be realized.
And it’s not just him. Thiel, Bezos, Andreessen, Zuck… All them guys are fishy as hell. Bottom line, always be skeptical of big money.
“Dispatch: Children reduced to skin and bones in war-torn Sudan’s forgotten famine…”
World Birth Rate
Births per Day: 362,453
Births per Hour: 15,102
Births per Minute: 252
Births per Second: 4.20 –
https://worldpopulationreview.com/countries/births-per-day
At least Trump and co recognise climate change as an issue. Surely that’s the implication of Greenland.
Dark days indeed. Drums of war are warming up.
It’s an all in bet, business as usual til the wars start. There’s a huge shift in where the money is flowing.
Currently the main actors are sorting their affairs, and positioning on a multi-dimensional chess board. Soon all the pieces will be in place.
It’s a mad disease affecting many. The chatter here in Australia is similar and our upcoming election will expose our country’s true character.
I’ve never been so aware of the incredible polarisation of opinion that currently exists. It’s so extreme, it doesn’t match reality.
It makes for riveting theatre until you realise we’re all on the stage.
Nicely put, Sean. I do wonder how much Trump does know about climate change…