US Withdrawal From TPP TPP Exists In Name Only

The bull market in the US bond market is actually accompanied by loose money and the Federal Reserve has kept close to zero interest rate. Now the Federal Reserve has entered a cycle of raising interest rates. Although the pace of interest raising is very slow, at the end of last year, there was no increase in interest rates after the first increase in interest rates at the end of last year. Now the market is expected to raise interest rates by more than fifty percent in December. With the increase in the Federal Reserve's interest rate, the performance of bonds may be affected, and the bull market of bonds may end, and the stock market is still a bull market. We can see that the Dow Jones index, including the Nasdaq, including the S & P 500 and even Russell 2000, has reached a record high.

The trend is very bull, relatively speaking, the bond market trend is relatively weak.

Merrill Lynch said on Monday that it should be the year after 2006 that it will not have monetary easing policy, which means that the bond market that has lasted for 35 years will end.

We can see that US stocks have been rising quite well recently, including Russell 2000, which is also rising further.

The reason why the market is totally opposite to what is expected at the time of Trump's election is probably that before, people may be more concerned about the endless words that Trump delivered during his election campaign. He was considered to be an unreliable man. But after his election, those words he said were actually in the making. When he really became president, he still relies on it. Many policies still need to be dealt with as usual. In addition to leaving the TPP, they are more resolute.

That is to say, Trump is not so unreliable, at least for now.

Because of Trump's excessive trade protection, he is now strongly opposed to TPP, and he said he would withdraw from TPP, which the Japanese side would be most reluctant to see.

But skipping the US and China, and finally taking the lead by Japan to launch a TPP, is impossible.

In fact, the TPP trade agreement is led by the United States, and Japan is the second in order to contain China's agreement, which is against WTO.

Built in the WTO box.

As the largest manufacturing country in the world, it can be said that the terms of WTO are fully enjoyed. Therefore, the United States wants to draw some countries such as Japan and other Pacific Rim countries to engage in a trade agreement, which basically excludes China.

Although this is the wishful thinking of the United States, many trade without China can not be carried out, for example, the capacity of some manufacturing industries can not be pferred from China to Southeast Asia, nor does Southeast Asia have such supporting conditions.

Now when Trump comes to power,

It is to quit TPP, that is to say, the biggest leader - the United States has retired, and Japan must be powerless to advocate TPP. Without the participation of China and the United States, TPP will exist in name only.

So this time, Japanese Prime Minister Abe went to the United States to pay a visit to Trump, hoping to persuade him to stay in the TPP, but Trump's attitude was very determined to quit TPP.

So from this point of view, TPP is already in name only.

Besides, Trump has always advocated using it.

To build infrastructure, that is to say, after he takes office, he will spend a lot of spending on airports, or railways, and these public pport.

This kind of infrastructure construction to boost the other aspects of the economy and promote the overall development is actually Keynes's theory in economics.

This theory has also been out of mainstream for a long time, but now it has been reused by Trump. This is not the same way of thinking in the Obama era. Many of his policies are different from those of Trump. This may be a reason why Trump came to power.

In fact, Trump's investment in infrastructure construction should be similar to that of China's 4 trillion investment in the past 09 years, that is to say, it is to stimulate economic growth through massive government investment. This is different from that in the Obama era. The Fed adopted three rounds of quantitative easing and monetary policy to stimulate the economy, so this is two totally different ideas.

In fact, from the perspective of the pull effect, fiscal policy is actually easier to pull the economic indicators up, and monetary policy may make some virtual asset prices rise, which can activate the activity of the whole market investment.

So we can see that in the Obama era, the Fed has made the US stock market through three rounds of quantitative easing, and the Dow Jones index has also reached a new high. Then, after the stock market is active, investors have the money to spend, the consumption is activated, and the listed companies can also raise funds through refinancing, so the Obama era is such a train of thought.

Now that Trump has come to power, he has taken a new way of thinking, that is, it is driven by infrastructure investment, which is also beneficial to China. Because of his massive infrastructure construction, he needs some building materials and some construction companies, which will be beneficial to China's high-speed rail export strategy.