Off The Cuff: The Party’s Over

In this week’s Off The Cuff podcast, Chris and Mish Shedlock discuss:

• Next Up: A Currency War With China?
• Recession Warning
• A War With Iran, Too?
• More Cracks In Europe

The self-delusional “Everything is awesome and getting better!” narrative that has pushed markets ever higher for the past years is suddenly unravelling. The current China tariffs will undo any remaining salubrious impact of the Trump tax cuts, a global recession appears underway, and — seriously — are we about to go to war with Iran??

As Chris opines:

The only way I can interpret this that’s even slightly market friendly is for the “market” saying, Well, yes, tariffs are a tax, but they’re not a permanent tax. Because remember how much the markets rallied because Oh, my God, tax cut! Well, this is the opposite of a tax cut; this is a tax levy.

And it also is a very, very regressive tax because its hitting a lot of the stuff that comes from China. Yeah, China makes some high-end stuff, some really tasty lithium batteries and some awesome alternative energy stuff. But they also make socks and shoes and underwear and toothbrushes and pretty much every Happy Meal plastic toy.

So this is really going to hit, I think, more of the middle class. So it’s really directly a tax on the middle class.