Europe threatens to tax the United States to the tune of 300 billion dollars ; Russia receives 65 billion dollars following OPEC oil production cuts ; J.RICKARD'S : "The dollar is a source of global instability".Europe Threatens to Tax the United States to the tune of 300 billion Dollars
US President Donald Trump recently declared his intention to hit European car imports with a 20% tariff if Brussels does not remove taxes and other trade barriers on US goods.
Brussels replied that the United States will be sanctioned by a new series of retaliatory tariffs worth 300 billion dollars, if the Trump government applies these new customs duties on European cars.
Donald Trump said that the “EU was as bad as China” in terms of how European countries trade with the US. It also rejected arguments that its attacks on the EU were counterproductive.
The $300 billion identified by the EU is roughly equivalent to the value of US imports of cars and spare parts, which reached $330 billion in 2017.
At a summit in Brussels, EU leaders warned that the bloc would respond to all US attacks. European Commission President Jean-Claude Juncker will meet Trump in Washington to find a solution to this conflict, according to CNBCRussia receives 65 billion dollars following OPEC oil production cuts
Following an agreement with OPEC to reduce oil production, Russia has obtained more than 4 trillion rubles (about 65 billion dollars), according to the Russian Direct Investment Fund (RDIF).
In December 2016, OPEC, Russia and other major producers agreed to reduce production by 1.8 million barrels per day (b/d) for six months. The agreement has been extended twice. During this period, the price per barrel rose from $54 to over $80.
According to the agreement, Russia was obliged to reduce its production by 300,000 barrels per day according to RT.
After the major oil producers and OPEC members achieved the desired price increase, they agreed in June 2018 to gradually increase production for fear of a supply shortage in the market. OPEC+ countries will increase production by one million barrels per day, of which 200,000 b/d will come from Russia.J.RICKARD'S : "The dollar is a source of global instability"
The dollar constitutes about 60% of world reserves, 80% of world payments and nearly 100% of world oil transactions.So, the strength or weakness of the dollar can have a huge impact on global markets.
The dollar has risen +12.5% over the past four years on the Fed's index, and this is bad news for emerging market (EM) debtors who have borrowed in dollars and now have to dip into their own currencies to pay off debts that are much more onerous due to the strength of the dollar.
Much of this appreciation in the dollar is attributable to the U.S. Federal Reserve's policy of raising interest rates and tightening monetary conditions by reducing the balance sheet. Meanwhile, Europe and Japan continued their policy of easy money, while the UK, Australia and others remained neutral.
A new debt crisis has already begun. Venezuela has not repaid part of its external debt, and disputes with creditors and the seizure of certain assets are ongoing. Argentina's reserves were seriously affected and to support its currency the country turned to the IMF for emergency financing.
Ukraine, South Africa and Chile are also highly vulnerable to leakage from their national reserves and default on their dollar-denominated external debt.
The only question now is whether the new crisis will be contained in Argentina and Venezuela or whether contagion will take over and trigger a global financial crisis worse than in 2008.
Source: BUNKER GOLD&SILVER