Gold News: Taking Stock of a Potential Trade War

Today in gold news, international markets are processing their thoughts on Donald Trump’s lunge into trade war territory.  So far things are going as you’d expect: interest rates rising for US Treasuries, fears of inflation. Wait a minute! Were those in the script?  

Somehow, when President Trump said trade wars are easy to win, he left out rising prices for consumers and decreasing demand for US debt.  But markets are indicating trade wars aren’t easy to win this morning after a weekend of analyzing the last tweetstorm.  Seems someone was awake in Econ 101 when they taught that higher costs mean, well, higher prices.  It’s all well and good to defend local jobs. Keeping prices realistic means more people are employed closer to where consumption happens.  The downside is consumers were paying a lower price before, and now they’re going to pay a higher price.  That’s the definition of inflation.  

Things get worse you piss off whoever the suppliers are. And the market is spooked – with tariffs now targeted for solar panels, steel, aluminum and a few other basic materials, overnight came a poke at European car makers. Sometimes these big questions don’t have easy answers, and some wars are more difficult to win than others.  Ask Presidents Kennedy or Johnson about Vietnam, or Obama about Afghanistan.

 Today’s featured article discusses the risks and rewards of trade wars in the current environment, and where we can expect China and Europe to hit back. 

Related: Here’s How Gold Reacts to Trump’s Trade War Talk

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated with a business degree, then worked with Macy's. After Macy's he spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined a well-known financial planning firm as a financial advisor, helping regular people understand their finances and meet their life goals.

Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where he worked first for a small manufacturing consulting company, then a major university. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach.

Since then, Mike has trained over 200 individuals, spoken at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

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