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"The Biggest Deal Ever Reached" |
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Dear Reader, |
President Trump, yesterday: |
"He's leaving very soon, I'll miss him." |
The president refers of course to the Hon. Jerome H. Powell, Federal Reserve chairman. |
Is the president hearing whispers you and I are not? I do not know. |
Yet I am confident — extremely — that the president will freshly denounce Mr. "Too Late" Powell early tomorrow afternoon. |
That is when the Federal Reserve will announce its decision on the federal funds rate. |
And it is highly unlikely the Federal Reserve will announce a rate reduction… despite the president's multiple pleas for rate reductions. |
CME Group's "FedWatch" gives 97% odds that Mr. Powell and mates will hold rates steady tomorrow. |
The Federal Reserve does not like to give the stock market unexpected jolts. And so the Federal Reserve will maintain the federal funds rate between 4.25-4.50% tomorrow. |
I will devour these very words if mistaken — without salt. |
Trump Notches a Trade War Victory |
Meantime, the president recorded another trade war victory this weekend. In this instance, trade war victory over the European Union. |
President Trump has labelled it "the biggest deal ever reached." Under which: |
The European Union will impose no tariffs on many United States exports. |
The United States will impose 15% tariffs on most European Union exports. |
The United States will maintain its present 50% tariff on European Union steel and aluminum exports. |
The European Union will purchase $750 billion of American energy products, largely liquefied natural gas. |
The European Union commits to purchasing "hundreds of billions of dollars worth of military equipment" from the United States. |
The European Union will invest some $600 billion in the United States economy (though admittedly, the European Union may never fulfill the pledge). |
Many Europeans believe the American president gave Europe a good, hard roughhousing. |
He won all, they believe… and conceded not one thing. |
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Jim Rickards: "One Executive Order changes my entire 'Birthright' thesis…"
| | In his original 'Birthright' presentation, Jim Rickards conservatively projected this $150 trillion mineral boom to transpire over 4 years… But Trump has just completely accelerated this timeline. What happens next will shock most Americans. Jim just recorded an urgent interview with all the new details. | Watch his full analysis of The American Birthright: Phase II HERE. |
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A "Dark Day" for Europe |
Thus reports CNN: |
President Donald Trump may rate Sunday's trade agreement with the European Union as the "biggest deal ever," but for some within the 27-nation bloc, it feels a lot more like economic appeasement. |
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French Prime Minister François Bayrou called Sunday a "dark day" for the region in a post on X. "An alliance of free peoples, gathered to assert their values and defend their interests, resolves to submission," he wrote… |
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Hungarian Prime Minister Viktor Orban said… that Trump had steamrolled the EU in negotiations, comparing the US president to a heavyweight boxer against [European Commission President] von der Leyen's "featherweight"... |
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Bernd Lange, chair of the European Parliament's trade committee, said the deal is "not satisfactory"... adding that "concessions have clearly been made that are difficult to accept." |
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Why did Europe agree to the clipping? |
I hazard the answer reduces to European fear. |
Fear, that is, that the United States is turning from Europe… and redirecting its gaze towards the Indo-Pacific region. |
A trade accord with the United States — even a submissive trade accord with the United States — tethers the United States to Europe. |
It yokes American fates to European fates. |
Thus Europe is willing to sink to its knees… and kiss Mr. Trump's gaudy ring. |
Europe Needs the United States |
As I have argued before: |
The entire European project shelters beneath the mighty wings of the American eagle. |
The central imperative of the 1949 North Atlantic Treaty Organization was — famously — to keep the Americans in… the Russians out… and the Germans down. |
Let the United States tend to our defense, Europe said. |
It can then repurpose its swords into plowshares. |
It can erect lavish welfare states to maintain its citizens in a sort of opulence. |
Beneath the comfortable American security blanket, Europeans have acquired an extravagant taste for butter — for costly butter. |
If the United States withdraws its guns, Europe will be forced to manufacture its own. |
And Europe cannot afford these guns if it maintains our extravagant butter purchases. |
Most importantly, the mighty United States has quieted ancient European quarrels. |
Should the United States release Europe from its protective fold? Europe may rediscover these quarrels. |
It may discover that Europeans are not primarily Europeans — but primarily Frenchmen, Germans, Italians, Belgians, Spaniards and Dutchmen. |
Its airy-fairy dreams of a unified and borderless Europe may therefore die the death. |
And Europe may learn that history has not in fact ended. |
It may discover instead that history has it by the tail. |
Hence the European horror at a potential American exodus. |
It's Not About Russia |
Many European leaders like to yell about the threat from Mr. Putin's Russia. |
They shriek that the Ukrainian hors d'oeuvre will not satiate Mr. Putin's vast territorial hungers. |
They argue he will next gobble Poland and the Baltic states. All of Europe will appear ultimately upon the dinner plate. |
Yet I do not believe the yells are sincere. Consider: |
Over three years in, Russia has chewed off perhaps 20% of Ukrainian land. |
Russia can take in mere bitefuls — it appears incapable of mouthfuls. |
Is this a nation that can take a rich European meal down its gullet? |
I do not see how it is possible. |
Thus the Europeans want the Americans in for separate reasons. |
Europe fears it may revert to feuding constituent parts… should the Americans walk away. |
As I have argued before: |
Europeans do not fear Russians. |
They fear themselves. |
Brian Maher |
for Freedom Financial News |
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