Why is Donald Trump upsetting the Chinese Bear?

Video transcript:

Today is Monday 12th December 2016 and we are commenting on Donald Trump’s deliberate attempt to cause some consternation with the Chinese government.

President-elect Trump has during the Presidential election campaign accused China of being a currency manipulator and taking advantage of International trade.

China is quoted today as being "seriously concerned" after Donald Trump expressed doubts about continuing to abide by the ‘One China’ policy.

Under this policy, the US has formal ties with China rather than the island of Taiwan, which China sees as a breakaway Province.

Following on from taking a call from the President of Taiwan and subsequent tweets last week, In a TV interview yesterday, Mr Trump stated he saw no reason why this one China policy should continue without key concessions.

He said:

“"I fully understand the 'One China' policy, but I don't understand why we have to be bound by the 'One China' policy unless we make a deal with China, having to do with other things, including trade."

He added:

“The US was being hurt by Chinese currency devaluation, tariffs, the building of a ‘massive fortress’ in the South China Sea, and a failure to help over North Korea's nuclear ambitions”.

Foreign ministry spokesman Geng Shuang told reporters that the ‘One China’ policy was the basis for relations with Washington, while China's Global Times tabloid dubbed Mr Trump "ignorant as a child".

Trump is clearly posturing. He is deliberately attempting to produce a negotiating arrangement by destabilising existing arrangements and this may indeed prove the template for future negotiations.

This strategy, if anything, can destabilise markets and so we suspect that the early stages of a Trump Presidency will indeed provide some significant swings in both markets and in the value of the dollar and therefore gold and silver prices.

On that note, gold is up $2 so far today and silver is up 1.25% or 21 cents at $17.07.

So do you think Trump’s strategy is a deliberate one and if so will it work or do you think he is just making ‘schoolboy errors’ we’d appreciate your views.

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Disclaimer:

Illuminati Silver owners come from a background of Banking, International Wealth Management and Economics. Having now retired from these worlds we are not qualified to give investment advice. Therefore, this and other productions must not be deemed to be giving such advice and merely represent the personal views of its owners.