On the Trey Ware Show this morning, Karl explains why China needs a trade deal more than the U.S.
Trey Ware: Our friend Karl Eggerss from eggerscapital.com joins us and we talk about what’s going on with money, with the business community, and of course, with the stock market. Good morning, Karl.
Karl Eggerss: Good morning, Trey.
Trey Ware: Great news from the President, or he says there’s great news coming. He says they’re making a lot of progress on the China negotiations. That we have been stronger now than we have been in about 35 years and possibly ever and there’s more good news to come. As we have chronicled here, as you and I have talked about it, that’s probably going to be pretty good for the market. They’ll probably respond pretty positively knowing that he is delaying any further increases to these tariffs, huh?
Karl Eggerss: Yeah, and all along we said that China needs this deal more than the United States, and I think you’re seeing that play out because when it was rumored that President Trump would delay this tariff deadline, our market kind of went up just a little bit. When you saw this actual news come out overnight, China’s stock market went up 6% in one night. Huge gains. Clearly investors are saying, “Boy, this is great for China if this gets delayed.” Again, that tells me that everybody believes this deal needs to get done more for China than the U.S. Again, we’re in a great negotiating spot.
Trey Ware: That and you consider that the underpinnings of the economy are still very strong. There’s some concern about the global economy, but our U.S. economy, as we continue to get numbers in, the underpinnings are still good.
Karl Eggerss: Yeah, I mean, people say unemployment looks pretty good. I look at it and say, “Instead of saying we have 4% unemployment, how about we have 96% employment?” Let’s look at it from that angle. We do see some things slowing down a bit, but it’s very normal given economic cycles. Again, there’s a very big difference between a slowdown and some kind of major recession or financial crisis. Slowdowns are going to happen, and what it actually did was that little bit of slowdown put the Federal Reserve on the back burner. Now the Fed’s out of the way and this market … It’s all about the Federal Reserve and the fact that they’re on hold, not going to raise interest rates any more, investors love that because, as you know, people borrow money to buy cars, homes, real estate. They borrow money to buy stocks, to run their businesses, so when they see interest rates flatlining for a little bit, that’s welcome news.
Trey Ware: Can you imagine what would be happening right now with the economy and the stock market if we didn’t have all these investigations sucking so much oxygen out of the media atmosphere? If they were really talking about what’s going on with the man and woman on the street? If we didn’t have so many of these politicians on the left and we didn’t have so many of these so-called celebrities who are bashing the President at every turn … If they were actually talking about the reality of what’s happening on the streets with the men and women out there and with the increase in wages that we’ve seen, can you imagine the positive momentum? I mean, there’s a lot of positive momentum now in the face of all of that. If all of that was removed and wasn’t there, the positive momentum would be incredible.
Karl Eggerss: Well, look. There’s other countries that have people with business backgrounds running their countries. We … The United States have that now, but for the longest time we’ve had politicians running our country and all they seem to do is stir the pot, because they know nothing else to do but make things more confused and spend other people’s money on useless things. When you get a businessperson in there, they look at it and say, “This makes no sense. How could you run the government in this way? We need to eliminate this, we need to get rid of this.” All of these things are such huge distractions on what can be a huge, huge global economy that booms. Not only in the United States, but everywhere. I mean, President Trump’s telling people, “Look, we need to deal … This is going to be good for China and the U.S.”
Trey Ware: Let me give you an example. In a tweet this morning, just a little while ago, he says, “Oil prices are getting too high. OPEC, please relax and take it easy. The world can’t take a price hike. It’s too fragile right now.” I mean, that’s not a politician. That’s just a guy who understands the economy and the effect of high oil prices on the economies of the world, and he’s just saying to OPEC in a very relaxed way, not some big time politician’s speak, but, “Hey, you guys take it easy over there. The world can take another price hike right now. It’s too fragile. Take it easy.”
Karl Eggerss: They’re not used to common sense, Trey. It’s as if you and I are looking at this going, “Wouldn’t we say the same thing if oil prices were lower?” Yet everybody’s like, “My God. Politicians really say that?”
Trey Ware: Well, yes.
Karl Eggerss: Yeah. Again, I think that’s why he got elected is because obviously there’s a lot of part of him that’s not relatable to the average joe, but there’s also a very big part of him that is relatable in terms of just plain speak.
Trey Ware: The frank, frank discussion is what this country’s needed for a long time. Karl Eggerss, eggerscapital.com . Thank you, Karl.
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