Stocks take a dive a - Trump's Worst Economic Idea

No good can come of steel and aluminum tariffs.By
Editorial Board
February 28, 2018, 7:00 AM GMT+8
From



Not helping. PHOTOGRAPHER: JEFF SWENSEN/GETTY IMAGES


Does anyone, anywhere, support President Donald Trump's plan to impose tariffs on steel and aluminum imports?



As Bloomberg News recently reported, Trump is considering broad duties of as much as 24 percent on imported steel and 10 percent on aluminum, with the aim of protecting national security and pressuring China to reform its trade practices.

This is a terrible way to achieve either ambition. The likely outcome would be to raise prices, hinder growth, jeopardize jobs, burden taxpayers, encourage retaliation, and heedlessly destabilize the system of global trade. Not to be alarmist, but it could even raise the cost of beer.

The idea is so comprehensively misguided that it has induced a rare consensus in Washington. Most of Trump's cabinet opposes the idea, as does nearly every mainstream economist. Farm groups call it a "short-sighted mistake." Manufacturers call it "disastrous." Trump's own Economic Report of the President, which he has no doubt read carefully, warns that such barriers could "distort the free allocation of capital."


Surely steelmakers, at the very least, would be grateful for this added protection? Not so fast: Many producers are worried about the inflation, input shortages and supplier disruptions that could result, just as the industry's prospects are otherwise improving and a big infrastructure push is on the way. (Tariffs would only raise the cost of that worthy endeavor.)

Nor does the Pentagon think much of the national-security rationale. Total military demand for steel and aluminum amounts to only about 3 percent of domestic production, meaning that reliance on imports isn't a notable danger. Imposing broad tariffs, however, could have a "negative impact on our key allies," as Trump's defense secretary delicately put it.

China, meanwhile, won't be much affected by these measures. It's already subject to more than two dozen antidumping and countervailing duties on basic steel products, and hence provides less than 3 percent of total U.S. imports. About the only practical effect of broad new tariffs would be to invite retaliation on American exporters.

None of this is unfamiliar; none of it should be controversial. For decades, the U.S. government has tried now and then to protect the steel industry -- and those efforts have consistently harmed consumers, undermined manufacturers, inhibited growth and impeded innovation, all without obvious benefits. The most recent such initiative -- the so-called safeguards imposed by the George W. Bush administration in 2002 -- raised costs and destroyed roughly 200,000 jobs.


There's a better way. A different trade dispute has caught Trump's attention -- concerning intellectual property, and China's approach to transfers of corporate technology. On this issue, the administration is reportedly working with allies to jointly pressure China at the World Trade Organization. This is exactly the right approach: orderly, above board, and intended to minimize conflict. Given time, it may well work.

The same cannot be said for the president's tariffs. If he proceeds with this idea, he'll be harming the economy, not helping it.

2018-03-02- 02:20 

Best Asia Real Estate Editors Comments:

This will add significantly to Inflation in America which will hurt the average American. 

Inflation can be your friend or your enemy depending on where you put your money. 

Tangible investments such as Real Estate, Precious and semi precious metals, Diamonds, precious stones, Art, Antiques and rare coins will all rise.

Very bad move by trump Instead of making America competitive he has started a trade war.

I predicted much higher inflation in 2018 . Now it is happening.

2018-1-1 Predictions for 2018

Lawrence B. M. Bellefontaine has been making Asian and World economic and investment predictions with uncanny accuracy for the past 37 years.

Chinese Tourist Prediction:

In 2008, while speaking on behalf of the Indonesian government at a huge conference for 200 Chinese travel agents in Beijing he predicted that, "Chinese tourists would be the number one tourist to Bali". At the time they were 18th. 
His fellow hoteliers and travel agents laughed at this prediction. The Indonesian tourist bureau scolded him for making such a prediction.In 2017 that prediction came true.

"Chinese tourists would be the number one tourist to Bali"

Bellefontaine, Bejing, 2008

Bellefontaine speaking to 200 Travel Agents in Beijing 2008

 Bali Real Estate Crash Prediction:

In 2014 after Bali never having a real estate downturn in modern history he shocked most of his huge following on his Bali News & Views Blog when he predicted the worst downturn in history after a government minister warned foreign investors, who were utilizing nominee agreements, a grey area of law, that they were illegal. 

Since 2014 Bali real estate prices have dropped as much is 50%.

Singapore Real Estate Crash:

In the same year he predicted that Singapore real estate prices, which had soared with unconscious Chinese buying over several decades was about to end and that a real estate downturn had begun.

Since then Singaporean real estate has had almost four years of consistent downturn.

Nostradamus of Bali:

His predictions have been so accurate that a very jealous major news letter publisher in Bali once called him the "Nostradamus of Bali".

As he explains, I am not a Nostradamus. “I don’t make any predictions based on supernatural visions of the future. I base my predictions first on 40 years of real estate and tangible investment experience, 21 years of living in Bali, 13 years of being president and director of 135 staff, TripAdvisor Hall of Fame award winning hotel”

He stresses that “predictions and investment decisions should be based on three major sources of information.

(1) Fundamental analysis of what is the current and future expected supply and demand?

(2) Technical analysis. Is the market oversold or overbought?

(3) Economic conditions. What are the current economic conditions and what are the economic conditions expected in the future?”

Predictions for 2018:

During a recent Christmas, New Year ski vacation in Canada, he digested daily input from Canadian and American television news stations.

Upon his return to Bali  and after  reviewing the current conditions in Bali and Asia he says, "I have the first very clear view of whats ahead for the past few years". 

World’s Economies - One of Best years This Century.

As he states going into 2018 we have the foundation for one of the best economies worldwide this century.

With unemployment rates in countries such as Canada, America, Germany, 

Europe, and even Asia at near record low levels this means that everybody that wants to work is working. 

People have much more money and confidence to purchase everything from homes to consumer items.

Higher Inflation Ahead: 

He warns that, “record low unemployment may lead to higher inflation”. The Canadian government has just raised the minimum wage by almost 24% and large companies in America may follow suit.

He explains “Companies cannot provide substantial wage increases unless they’ve raise the price of their goods”. 

As he points out “Also in the last six months oil prices have risen over 50% which means that gasoline and all oil related products will also rise.”

U.S. dollar will fall:

One of Bellefontaine’s major predictions for 2018 is that the U.S. dollar, which had started a downturn before Christmas will continue to fall in 2018 against many currencies such as the Euro, Canadian Dollar, Singapore Dollar, Australian and New Zealand dollars.

This is also bullish for items that benefit from a falling dollar such as commodities, precious metals and Bali real estate which is often priced in American dollars.

He goes on to say that “we may have a scenario like 1980 when overnight surges in oil prices coupled with a great economy led to hyperinflation of over 10%. 

When prices start to rise for consumer goods people start to adopt the attitude I better buy it now before it goes up. Therefore, huge demand in a short time for consumer goods”.

Possible Much Higher Inflation in 2018:

Therefore, his first prediction for the world economy is an increase in inflation in 2018.

Historically when inflation heats up governments around the world will begin to raise interest rates. This will cause those who were standing by waiting to buy real estate to jump in before interest rates go up anymore.

He reiterates that “inflation is like the tide it raises all boats.

It will cause tangible investments, (investments that you can touch and feel) such as commodities, real estate, precious metals, art, diamonds, numismatic coins etc., to increase at a rapid rate.

He warns that “Inflation can be your friend or your enemy. If you keep your money in a bank account earning 1 to 2% when inflation is 3 to 5% you will lose 2 -4%.

“Inflation can be your friend or your enemy”

Bear Market in Bonds:

He cites the fact that “One major bond trader has just issued his first bear market signal for bonds in decades because as interest rates rise investors will want to sell their current bonds to buy higher interest bonds”.

Last Stage of Major Bull Market in World Equities:

Bellefontaine is predicting that, “In the first half of 2018 there could be a dramatic rise in world equities, especially U.S., Canadian and European stocks as the little person or small-time investor enters the market for the first time in a long time”. 

He warns that “US equities indexes are already at the upper end of historic length of periods for stock markets. 

The bull market that he predicted back in February of 2009 may end in the second half of 2018 or early part of 2019”.

As one article points out. “But the proverbial bull is also celebrating a milestone of its own: The bull market in U.S. stocks turns nine years old on Thursday, March 9. 

The current bull market, defined by prices that continue rising without being interrupted by the 20% decline that would signify a bear market, began for the S&P 500 exactly nine years ago, in the depths of the recession in 2009. 

Since then, the benchmark index has gained 249%, with just four official corrections—defined as a decline of 10% or more—the last of which happened in the beginning of 2016, according to Yardeni Research.

At 106 months old, this bull market is not the oldest in modern history (post-World War II): That title goes to the bull market that lasted from the fall of 1990 to the early spring of 2000, or 113 months, according to CFRA and S&P Global, before spectacularly flaming out in what has since become known as the dot-com bust. 

That record dot-com bull market, which is also the best-performing, with a 417% gain, lasted just more than a year longer than the current bull market’s age. No bull market has ever made it to its 10th birthday.”

2018 Predictions for World’s Real Estate Markets:

One of Bellefontaine’s specialties the last 40 years is real estate. He is currently President, Dir. of 13 yr. old PT. B.A.L.I. who in the last few months launched a major high-tech website mirroring the largest real estate website in America. 

He has a 90% + accuracy record on predicting major shifts in the worlds real estate markets since 1982, over 35 years.

As he says, "one of the easiest markets in the world to predict his real estate because it doesn't change overnight. Real estate cycles usually last a minimum of three years and upwards to 20 to 30 years and the fundamental analysis of the markets is very easy".

As he says, “I came out of semi retirement because I believe that many Asian real estate markets, especially Bali, are going to surge in the next 3 to 10 years”.

Regarding the world’s real estate markets, America which he predicted would crash in 2007 and then predicted would start on another bull market in 2009 He says, “are getting old and mature”.

He is concerned about the fact that prices are starting to get to the point where not too many people cannot afford them, which is the first acid test for any real estate market.

So, although there may be one last sharp upturn in American real estate it may be short in length. Also, the markets may be killed when interest rates start rising substantially by the Federal Reserve in America to curtail higher inflation which is just around the corner.

So, for American real estate he is recommending holding at this point and look for an exit point sometime in 2018 or 2019.

He says, “the same is true of Canadian real estate which increased dramatically in recent years, primarily because of Asian buying”.

After just returning from a Canadian ski vacation he states, “Canadian real estate is now at the point where you cannot achieve positive cash flows.” He believes, “the Canadian market which he actually recommended and purchased for himself in 2009 is at the very last stages of a bull market and very dangerous”.

Many of the Western real estate markets are also in danger, especially Britain who because of it’s exit from the European economic Council is now seeing prices begin to fall in places such as London, which again is way overpriced.

Bellefontaine recommends selling in Canada, America, and London and buying in greener pastures which include several areas in Asia.

Most of Australian Real Estate Will Fall in 2018:

In the last couple years Bellefontaine became increasingly bearish on Australian real estate for the same reason that he became bearish on Singapore real estate three years ago. The buyers were not Australians but Chinese speculating on Australian real estate who did take into consideration whether they obtained a positive cash flow. 

The Australian government has along with the Canadian government recently put in new laws to curtail speculation by foreign investors. Foreign investors will feel less comfortable will find other greener pastures.

Singapore Real Estate Bear Market May End in 2018:

One of Bellefontaine’s most dramatic recent calls was predicting the end of a multi-decade bull market in Singapore real estate back in 2014. Since he predicted the downturn Singapore real estate has dropped as much as 30%.

But as he says, “there are signs that buyers are beginning to enter the market” although he still does not recommend Singapore real estate, due to low positive cash flows and a less than attractive economy. 

Although Singapore has constantly been rated as one of the best places to live in the world in the past recently it is becoming increasingly unbearable as far as fees and taxes for expatriates. 

For example, if you want to own and drive a car in Singapore you must pay almost SG 100,000 just to get a permit and then pay an exorbitant import price for a top-of-the-line car. Last year many taxes have been raised dramatically in Singapore to compensate for the loss of real estate taxes in a bear market. 

As Bellefontaine says, “frankly I don’t know why anybody would want to live in Singapore, all it is one big shopping mall with few natural features to attract those wanting to retire”.

Speaking about retirement Bellefontaine points out that, “the largest demand for real estate throughout the world the next 5 to 10 years will be from baby boomers”. Boomers such as himself, born between 1940’s five and 1957 represent 25% of the world’s population and they are now retiring.

They will no longer need their big three-bedroom houses in places such as Sydney, America, Canada etc. because there is just the two of them. They now have opportunity to take their hard-earned cash and retire to a place where it’s a lot less expensive such as Bali, Vietnam, Thailand etc.

As he points out in his seminars if you look at Asia, which includes China, the largest country in the world, you can easily see that Bali is a short distance from every major country including Australia. 

There is an estimated 3 Billion people living within 5- 6 hrs from Bali. Twenty five percent of those are baby boomers about to retire.

If only 1 % of them decide to retire in Bali that will be almost twice the current population of Bali. 

As Bellefontaine points out, "you don't have to be a rocket scientist to figure this one out. Bali is about to have relations largest increases demands in history the next five years".

This makes Bali a perfect spot for Asian expatriates to retire, where the cost of living is 50% to as much as 70% less than their own country. Not only can they can enjoy good clean air, fresh vegetables, warm year-round temperatures but most importantly the wives will not ever have to do any domestic chores again with housekeepers costing as little as $250 per month.

As Bellefontaine points out, “the main reason that he moved to Bali 21 years ago was the local Balinese people who are friendly and honest. 

He even had his 79-year-old mother move to Bali and retire on one of Bali’s very attractive retirement visas. She ended her days living in complete comfort in her own private home, 10 minutes from the beach and a fraction of the cost it would cost in her former hometown of Victoria, Canada.

Best and Worst Real Estate Markets in 2018.

Below is a quick analysis of where Bellefontaine predicts will be the best and worst real estate markets in 2018 and the next 3 to 5 years.

(1) China’s major cities real estate prices will probably not grow much and may fall after years of extraordinary increases.

(2) Hong Kong, which Bellefontaine calls, “the bitcoin of the real estate markets because of it’s soaring prices with no reason” may for the first time in decades begin to crash, because nothing makes financial sense.

(3) Australia who also has enjoyed a robust real estate market for years has already seen the beginning of a downfall with places on the west coast of Australia in Perth dropping as much is 20% to 30% in a few short years. He predicts that now, “perhaps Perth prices have levelled off they may start to increase very slowly”. Not so attractive for investors.

(4) On the other hand, he’s predicting that most major Australian cities such as Sydney, Melbourne, Brisbane will see significant declines in prices in 2018 because they are simply overpriced for the market.

(5) Singapore which he accurately predicted would crash three years ago may have bottomed out and may only see minor increases in 2018.

(6) Thailand, Lagos. Cambodia, and Vietnam should have good real estate markets in 2018 and beyond.

(7) Indonesia with the fourth largest population in the world has an internal demand from simple population growth and should see continued increases in prices in most areas. Jakarta, its capital city may not see much increases due to over supply at this time but should not see a downturn.

(8) Bali, which has just endured the first downturn in modern history going back as much as 70 years or more has already had a four-year downturn. 

With continued increases in tourist arrivals, especially from the Chinese who last year were up 57% Bali should see a robust real estate market this year. 

Bellefontaine is predicting, “the beginning of a major 5 to 10-year rise, again primarily because of huge new demand from baby boomers” who will seek out Bali for its low cost of living, low cost of domestic help, fresh air, warm weather and friendly people. Bellefontaine believes that, “properties such as beachfront properties may see 10% to 15% increase in 2018 and a 50% to 200% increase in the next 5 to 10 years.

Bellefontaine recommends, “you start your search by attending one of his seminars coming up soon and learning everything about Bali from locations to buy what to buy where to buy etc.

You may also start your search with their very high-tech website bestasiarealestate.com which allows you to search areas without a keyboard. 

As he concludes so long as you can still buy a three bedroom 500 m² villa with private swimming pool for as little as $159,000 which rents out for $3,000 to $4,000 per month there are still excellent opportunities in Bali. 

Three bedroom 500 m² villa with
private swimming pool for as little as $159,000

Lawrence, his family and staff would like to wish everyone a very happy and prosperous new year.