In the first post sundance points to a the bad news for Germany in a Reuters article--Recession risks rise for Germany as industrial orders plunge:
But then he goes on to ask: Why? And it's not exactly rocket science. Trump has forced China into a currency devaluation, and that has had serious consequences for a major economy like Germany's that's heavily export dependent:
China has: (1) less income; and (2) less value within their own currency.
Where does this dynamic show up?…. Anytime China is going to buy something.
China’s currency devaluation makes their exports cheaper; however, at the same time it makes any of their imports more expensive. As a consequence China buys less… and that now exhibits in lower purchases of German stuff.
Next question, Will this translate into Trump leverage to push Brexit through? I won't pretend to be able to read Trump's mind, but nothing would surprise me less. Mike Pence--remember, the Vice President?--is in London telling everyone that the US is ready, willing, and able to do a trade deal with a post-Brexit UK. I don't believe any of this is happening in a vacuum.
UPDATE: For those who are fascinated by the Brexit "crisis"--or whatever it is--currently gripping UK news, here's a fun article: There will still be an election in the UK, and Brexit will still happen.
The only Brexit is going to be stopped is Johnson losing the coming elections. Right now, it looks like he would win, so the opposition is digging in its heels trying to keep elections from happening, but this only a stalling action- the bill passed won't ever be obeyed by Johnson, so the opposition is going to have to do a vote of no confidence, and given the present Parliament, it will lead to new elections sometime in late October.
ReplyDeleteI agree. It's an interesting spectacle--parliament in open revolt against the governed populace. It reminds one of the US in some respects.
DeleteWhat is so fascinating about the present Brexit spectacle is how the media are treating this as Johnson losing the battle in humiliating fashion which is simply ridiculous- he is still the Prime Minister, and as such, has complete control over whether or not an extension is asked for or even accepted. The only way to make the Benn bill controlling is to replace Johnson as the Prime Minister. There is only one legal way to do this- a vote of no confidence and either elections or the cobbling together of a new government with the present Parliament, and that latter path seems impossible to me given that it would either require Jeremy Corbyn becoming the new PM, or Corbyn relinguishing the post to someone else while using Labour votes to pick that someone else. That simply isn't going to happen.
ReplyDeleteIn a sense it isn't that different from the current Establishment attempt in the US to talk the US into a recession. It's what Eric Voegelin described as modern gnostics' use of magic verbal formulas to attempt to change reality.
Delete