Now that the China trade deal is getting inked, what’s next? Karl Eggerss discussed this on the Trey Ware Show.
Trey Ware: 6:50 now, Trey Ware, KTSA money, money, money, money, money. We go to the money man, Karl Eggers, creatingricherlives.com joining me every Monday at this time to talk about what we can expect with our money. And Karl, in the last segment I was talking to how Wall Street Journal doing a little bit of a mea culpa. I guess eating a little bit of crow, putting out a piece over the weekend about how the trade war with China, since China is going to be in DC today to sign the new first phase of the trade pact turned out to be an okay thing. All the people who were saying the sky is going to fall, we’re all going to die. The economy’s going to go into a recession. It’s not going to work out. The President is dead wrong to get into a trade war. Now they’re having to walk all of that back and say, you know what, it worked out.
Karl Eggers: Yeah. How many times over the last few months have you and I talked, and we were saying that China needed this deal more than the US.
Trey Ware: Absolutely.
Karl Eggers: And every time President Trump would say something that deterred or deferred this trade deal back. It was Negotiating 101. And we knew when he came into office, this is how he operated. We knew he did that with Mexico, China. And so that wasn’t a big surprise. It was a relief that it got done and it’s being signed. And that’s why, partially why the market is rising is because of that.
And it’s, look again, I watched the show last night just about some of China’s ghost cities. They build all these cities, they’re sitting there empty. They kind of build it to get their economy going, but they don’t have anybody occupying these stores, these malls, these hospitals. It’s amazing. So a lot of this, is they kind of front end loaded, if you will. And so they really need this trade deal.
Trey Ware: You know the other side, too is him being a businessman. The President that is, he understands negotiation and he understands getting people to the table. Which was what the China thing was all about. Getting them to the table and they’re going to be there today to sign phase one.
I believe he’s doing the same thing with Iran right now. Iran is the number one cause of Middle Eastern chaos. They have been sowing that. Solemani was the chaos maker. He’s out of the picture now. The regime is teetering on collapse and and a pro democracy movement, a pro-world type of economy coming back into place in Iran. And actually having Iran as a trade partner down the road, whether that happens in the next two years or the next five or seven years is really an important thing. And President Donald Trump has been setting this whole thing up to isolate them, to bring down that regime that’s there, to bring them into the economy of nations and have another trade partner there. I think a lot of this has to do with that as well.
Karl Eggers: Well, he used tariffs with China. He’s using sanctions with Iran.
Trey Ware: Right.
Karl Eggers: And you know, it’s almost as if some of these countries would rather kind of lob missiles back and forth then to deal with sanctions. And the sanctions are very, very powerful. And they’re going to have to fall in line because again, all these other countries are moving along with their economies. And Iran is going to suffer greatly if they don’t.
So the next thing to watch Trey, over the next few weeks here is going to be these corporate profits coming up. The stock market’s been rising. Corporate profits have been pretty flat the last couple of quarters, and the market’s telling you they expect them to rise to justify these prices. So let’s see what these companies say, especially given the real strong Christmas holiday with all the online shopping and everything going on. So let’s watch those profits over the next few weeks. That’s going to be real critical.
Trey Ware: Sound like a great idea. Thank you Karl. I appreciate it. As always, every Monday at this time, Karl Eggers creatingricherlives.com joining me here on KTSA.