Farmer Diaries

 It stands for Trump’s always chickens Out. Unfortunately, for the orange one, the truth is that he has a tendency to chicken out. The 50% tariff on European goods lasted an entire weekend actually it was announced on Friday by Sunday it was over.  The date was shifted from first of June to 15 of July. Rumours are that no one can talk to Donald Trump. He knows what he wants to do and he does it independently Of the consequences. The truth is probably that at the end of the day he doesn’t really care, it’s not something he loses sleep over. For him it’s about the show, being in the press every single day, ideally using the entire bandwidth. His biggest problem, is that those who have tried to negotiate are treated worse than those who held their position to Donald Trump. China did not say a single word and the tariff went from 145 to 30% they did not negotiate. On the other hand, others did try to have a serious conversation with the White House.  They found out the White ...

 This is gonna sound unhinged, I was at a dinner three nights ago in London, where the conversation at one point veered towards my friends family ranch in Argentina. He indicated that his parents had sold their 60,000 Hectare ranch. To some American billionaire. What surprise me was that my friend told me that several Massive ranches had changed hands in Argentina recently. What surprise, my friend, was that these were not just acquired as real asset investments rather these ranches were being equipped with ultra luxurious housing and independent power supplies.  granted, it’s a bit Rich for me to say such a thing considering our own farms, power needs and how they’re being met.  our farm currently operates on nearly 3000 acres of land, so 60,000 hectares is so much larger. It’s like comparing millions and billions. To give a sense of proportion, the main Ranch house is 6 miles from the closest public road. granted, all the information my friend has is now secondhand, but...

 Japan has the highest debt to GDP ratio at nearly 220%. In comparison America just passed 100% level a few months ago, a first since 1945. Europe is Hovering between 120% and 150% if you take consideration all the unfunded pension liabilities in Europe. The past month has been traumatic for the Japanese bond market, the reason no one knows about it is that the Japanese bond market is largely a domestic. Japanese pension funds are obliged by law to invest nearly 97% of their assets under management in Japanese government bonds. A price shift occurred at the beginning of May when the 40 year benchmark bond price rose from 2% to 3%. This 100 basis point increase translates into a decrease in the value of a bond purchased on May 1 of 20%.  what happened? Not too complicated to figure out the Japanese government and the Japanese Parliament. We’re talking of massive increase in debt to speed up spending to stimulate the economy. At one point, the whole exercise becomes a shell game...

 This time it took Donald Trump literally 72 hours to change his mind and revert again the increase in tariffs because the Europeans were quotation mark “not negotiating”. Donald’s fundamental problem is that he’s made promises that he’s negotiating with “200 countries” on new tariff agreements his biggest problem of course is that it’s four leading trading partners Have indicated that they are not actually currently negotiating with the “orange one”. China, Canada, Mexico, Japan, and the European Union account for nearly 90% of all of America’s imports. When all of them indicate that they are not currently in negotiations With the White House, clearly Donald Trump is lying. Not that it really matters because the disciples of Trump believe everything he says without questioning. However, after saying for nearly a month that he’s about to close another deal, eminently, and then nothing happens. He starts looking like an idiot. fundamentally, none of this matters. Trump doesn’t actua...

 For some reasons, my last two entries have been remarkably full of typos, not entirely sure how that happened but there you go sometime the ghost is in the machine

 six weeks ago, my neighbour had problems with one of his transformers that were provided by the local power company. The immediate solution was to acquire the use of a temporary power station that would provide the necessary electricity for him to run about a third of its farming operations. last night, we had a beer or maybe three at our local and he was telling me that until a week ago the timing for placement transformer to arrive was supposed to be June 1 of this summer two days ago, he got notice that the delivery date for the transformer had become empty, in other words the power company had no idea when the transformer would actually be available. During Covid, we became acutely aware on our farm of the risks of supply chain Disruption something that we had never considered beforehand, when suddenly filters for tractors could not be had for love or money. It forced us to consider our inventory of consumable products for all our power equipment from tractors To ATVs and of c...

The fact that the US stock market have recovered all their losses after Trump set aside most of his tariff was a knee-jerk reaction because American investors just don’t know where to put their money. The truth of the matter is that already US corporations have been hurt both from uncertainty and depressed earnings either because of international boycotts of their products or because terrace even is smaller than 150% are still over 30%. This will impact earnings which is the driver for stock market valuations pundits  can say what they want but the truth is when earning step price of shares dip also. As an example Tesla, it has seen it share price drop precipitously not because it’s price earning ratio has changed very much but because it’s earning have dropped by 71% that was the result that created a loss in the stock market of nearly 45%. there is another factor which is important and has been disregarded the past 20 years, which is the potential return for similar and equivalen...

 In the late 90s the blackberry pagers took over the finance world, and eventually their phones dominated the business landscape.   Then 2008 happened, first was the iPhone and the financial crisis and then the CEO thought they could ignore competition. 2008 was important because it showed the bankers the limitations of the blackberry,  First the web browser was terrible and more importantly your employer knew exactly what you did in every minute of use.  Many bankers were fired for cause because of how they used their phone, maybe not appropriate but a convenient way of kicking out bankers.  In 2007 every banker on Wall Street or in the City was using a blackberry as his constant companion, by 2009 the blackberry was often spending the evening and weekend in the office, as most bankers had a second private phone with great applications. The crime that Blackberry committed was then try to emulate the iphone badly with terrible products that didn't function....

 What  I hear from my friends in high and low places is that the UK/US trade deal is there to be made...eventually.   It helps that the US has a trade surplus with the UK, it's unclear how the negotiations will really proceed when they start, right now there's a framework, for the UK this is important America is its single largest trading partner. The Americans reached a "deal" with the Chinese where they are reducing tariffs down to 30% for 90 days.  The problem is that to get the trade engine going again will take about 90 days...so if you are an importer of Chinese goods what do you do?  For TEMU and others like it, it's instant relief although they go from zero to 30%. What to make of the White House is a different conversation than what we expect from the headlines.   Does it matter? Yes and no, the engine of trade is now full of sand, and will remain so.  Will anyone trust Trump and the Americans?   I don't know but only a foo...

 let’s be clear the importance of United Kingdom in trading United States is mostly irrelevant to the wider world.  First America has a trade surplus with the UK second the UK accounts for less than 3% of total trades in the US. For Donald, it’s a major win.   his first trade agreement but what did he get.  UK import tariffs with the US stand at 1%.  let’s say that they agree to cut tariffs by half…meaningless really.   this victory was all political with very little substance. That’s fine. These things have happen too however, the real key to US trading policy Our Canada, Mexico, China, Japan, and Korea these account for the bulk of American trade. oh, and Europe too