What will the Trade War do to Inflation? Seniors?

Klinker

Everything that comes from China (which is most things) is about to cost 25% more.  How will this effect the economy in general?  How will Seniors living on fixed incomes deal with these increases?


John

The seniors will buy less.


Interesting also, if China stops buying U.S. Treasury notes.


John

I think this would result in the old, "stagflation." Where prices increase and wages remain the same or even reduced. Wages/income would be reduced due to layoffs, lower farm income, fewer sales of Chinese produces (LG tv, for instance) and other effects of the trade war.

Some businesses that imported steel are experiencing declining sales due to higher cost of imported Chinese steel. Boeing will lose sales to China


Roberto

Doubtful it will “effect” the economy at all. 


Klinker
Robert_Casotto said:
Doubtful it will “effect” the economy at all. 

 How could it not?  This is literally a tax added to almost every item that comes from China which, in a lot of stores, is all of them.  Plus, many of the components of items manufactured in the US are being taxed as well.  If businesses eat the tax, that will be a huge hit to employers.  If businesses pass on the tax, it will be a huge hit to consumers and drive inflation.

With that in "mind", please enlighten me.  How can this not effect the economy?


tjohn
Klinker said:


Robert_Casotto said:
Doubtful it will “effect” the economy at all. 
 How could it not?  This is literally a tax added to almost every item that comes from China which, in a lot of stores, is all of them.  Plus, many of the components of items manufactured in the US are being taxed as well.  If businesses eat the tax, that will be a huge hit to employers.  If businesses pass on the tax, it will be a huge hit to consumers and drive inflation.
With that in "mind", please enlighten me.  How can this not effect the economy?

 Casotto is just being a nudzh.  It should be affect, not effect.


BG9
Robert_Casotto said:
Doubtful it will “effect” the economy at all. 

Really? I read the tariffs will average a cost of $500 per family. Is that a doubtful effect?

Also, we're a debtor nation. What happens if our primary banker, China, stops buying our treasury bonds?

Assuming, prices go up, will it be accurately and quickly reflected on the 3rd quarter CPI which seniors depend on for their Soc Increase? The Soc Sec COLA increase is based on the 3rd Quarter average CPI, July to September.


ml1

who knows how long any of this will last.  Trump's m.o. has been to create some sort of crisis, walk it back, and then congratulate himself on Twitter for solving it.


peteglider
 What happens if our primary banker, China, stops buying our treasury bonds?

 Interest rates will soar, the economy will tank


Dave

... and China will lose its greatest market.  Trade wars are lose-lose propositions and totally Trump territory given his financial 'acumen'. 


Mike

What will all the Dollar stores change their name to?


mrincredible

Billionaire seniors will be just fine, thanks for asking.


sbenois

Cooler heads will prevail.


Negligible impact from the tariffs themselves.  Huge impact from irrational market reaction.  Gynormouse impact if China bites the bullet and says the six  magic words: we are dumping your  treasury bonds.


Screaming buys out there right now.


Mike
sbenois said:
Cooler heads will prevail.

 I'd like to believe you but I'm not sure which cooler heads you are referring to.  Can you name any?


Sweetsnuggles
Formerlyjerseyjack said:
The seniors will buy less.


Interesting also, if China stops buying U.S. Treasury notes.

 I’ve been wondering why China has not started divesting treasuries.  Doing so will obviously inflict pain on both countries, but I think it would hasten the demise of the dollar as the default currency.  @cramer usually has the best feedback on such issues. 


Sweetsnuggles
Red_Barchetta said:
What will all the Dollar stores change their name to?

 I’m surprised that their stock has held up this well.  Time to short. 


cramer

Quoting from a subscription service:

"Walmart's WMT indication that tariffs could tack on extra costs for consumers could be a big help to discount retailers later this year.

"We will do everything we can to keep prices low but increased tariffs lead to increased prices," Walmart CFO Brett Biggs said in a Thursday morning interview. "It's very item and category specific. There are some places where as we get tariffs, we will take prices up."

While it wasn't specified what items might see tariffs, the projected rise in prices (which is still uncertain) could drive consumers to lower cost alternatives like Dollar General (DG

Of course, one might assume that the supply chains for discount retailers would likely be impacted similarly to Walmart, with cheap goods often being sourced from China. Given their already tight margins, that could be catastrophic.

However, Dollar General's top relationships, including Hans Brands (HBI) , Bridgford Foods (BRID) , and SpartanNash (SPTN) are all domestic.  Overall, the company said it imports about 6% of its merchandise from China, which is not overly significant in the context of things and the comapny noted its efforts

For example, Dollar Tree (DLTR) directly imports 40% to 42% of its products from China, making it much more vulnerable.

"As we have noted previously, DLTR is regarded as the 'poster child' for tariff impact, given its prescribed $1 single price point at the Dollar Tree banner," Credit Suisse analyst Judah Frommer wrote in a note to clients on Thursday, highlighting the direct impact.

Costco (COST) could similarly see significant impacts given the company's wholesale strategy is impacted much more strongly by artificial price increases invoked by tariffs, but I don't doubt the management of the company that has shown itself more than capable to navigate such situations."



bub
peteglider said:


 What happens if our primary banker, China, stops buying our treasury bonds?
 Interest rates will soar, the economy will tank

 The Chinese hold less than 7% of U.S. treasuries.  I don't think its accurate to call them our banker.  


BG9
sbenois said:
Cooler heads will prevail.


Negligible impact from the tariffs themselves.  Huge impact from irrational market reaction.  Gynormouse impact if China bites the bullet and says the six  magic words: we are dumping your  treasury bonds.


Screaming buys out there right now.

They may dump some to subsidize their industries that are hurt by tariffs. Just like Trump will now increase the subsidies to farmers. The difference is China has our treasuries to subsidize whereas we will have to further borrow to cover our increase in the national debt.


BG9
bub said:


peteglider said:

 What happens if our primary banker, China, stops buying our treasury bonds?
 Interest rates will soar, the economy will tank
 The Chinese hold less than 7% of U.S. treasuries.  I don't think its accurate to call them our banker.  

Yes, just tell China FU, you're not our banker, we don't want you to be our banker, dump our treasuries and don't buy any more.

What happens will be a learning experience.




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