Richard Hanania be like
spoiler
Donald Trump said the US would lower its tariffs on India to 18 per cent after Prime Minister Narendra Modi “agreed” to halt purchases of Russian oil, ending months of trade friction between the countries.
The president said he spoke with Modi on Monday and had discussed “many things”, including trade, ending the war in Ukraine and the possibility of India buying more oil from the US and even Venezuela.
“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” Trump said in a Truth Social post on Monday.
Trump has accused India, which imports about 90 per cent of its crude oil, of helping fund Moscow’s war machine in Ukraine. In August, he slapped a 25 per cent punitive levy on India over its purchases of Russian oil on top of the 25 per cent “reciprocal” tariff, raising total duties to 50 per cent — among the highest levels in the world.
On Monday, US officials, including Washington’s new ambassador to New Delhi, Sergio Gor, indicated that since India had agreed to stop buying Russian oil, the punitive 25 per cent levies would be removed, bringing down the overall tariffs on the country from 50 to 18 per cent.
Long-running trade talks that started last year stumbled after Trump imposed the extra oil-related duties, dealing a blow to the world’s fastest-growing large economy and deepening a rift between Washington and New Delhi.
The deadlock soured ties between Trump and Modi, who the US president has referred to in the past as a “great friend”.
The president said on Monday that India would reduce its “Tariffs and Non Tariff Barriers” on the US to zero, while also committing to a “Buy American” policy worth “over $500 BILLION DOLLARS” of American goods, including energy, technology and agricultural products.
“Wonderful to speak with my dear friend President Trump today. Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement,” Modi posted on X soon after Trump’s announcement.
Analysts were sceptical that India would buy as much from the US as Trump claimed, given that total bilateral trade between the countries amounted to $212bn in 2024.
India bought just $41.5bn worth of goods from the US last year, he said, “so there’s no way it’s going up to $500bn, particularly when Trump is only talking about goods trade”, said Pratik Dattani, founder of the Bridge India think-tank.
He added that while India had already started to reduce oil purchases from Russia, they were unlikely to be eliminated entirely, given the country’s relationship with Moscow. India had become the biggest buyer of cheap seaborne Russian crude since the full-scale war in Ukraine started in 2022.
Nicolas Köhler-Suzuki, adviser for trade and economic security at the Jacques Delors Institute in Paris, said Trump’s claim that India had agreed to work towards reducing all tariffs to “ZERO” was unlikely in the extreme.
“It seems highly doubtful that India has agreed to reduce tariffs to zero, particularly on agricultural goods, given India’s long-standing approach to trade negotiations going right back to the Doha Round,” he said, referring to World Trade Organization talks launched earlier this century.
The conclusion of a deal between the EU and India last month, following a similar agreement between India and the UK, was likely to have added pressure on Trump to cut a deal with New Delhi.
Trump said in his post that Modi had agreed to stop buying Russian oil — a bone of contention for Washington — and would instead “buy much more” from the US “and, potentially, Venezuela”.
“One must be cautious in the absence of deal text, but the word ‘potentially’ could end up doing a lot of work,” said Kevin Book at consultancy ClearView Energy Partners.
Since the imposition of US tariffs in August, employment-intensive sectors such as gems, textiles and shrimp bore the brunt of India’s pain.
However, some of India’s most important export industries had been exempt from Trump’s tariffs, including pharmaceuticals — which account for almost half of US generic drug supplies, according to the Indian Pharmaceutical Alliance — and consumer electronics.
While India is not a top global exporter, it has among the highest trade deficits in goods with the US, having reached more than $45bn in 2024. It historically has had high average tariff levels of its own in order to protect domestic industries, a policy that rankled the Trump administration.
“The deal is anticipated to provide notable tariff relief for New Delhi and represents a key achievement for the Trump administration’s trade diplomacy,” said Basant Sanghera, managing principal at the Asia Group.
“The deal will also inject much-needed momentum in the wider bilateral partnership after months of headwinds. India’s patience has paid off — for now,” he added.
The same question can be asked about Treasuries and USD assets too and yea it's valid, it's a fiscal transfer.
The excuse made is "USD is highly liquid unlike INR or NGN etc", sure but that doesn't change the fact that you are giving the US real resources in exchange for its own financial claims.
Unfortunately, everyone places first world currencies above third world ones.
I am firmly in the nothing ever happens camp, de-dollarization will not happen via gold hoarding but by countries altogether refusing to export to the U.S. (beyond 'balancing' the trade), sanctions of sorts. That won't happen unless there is an ideologically aligned states willing to do it or if there is an alternative power willing to supply their currency.
My read of the situation is that most developing countries (except China) will work harder to maintain exports and capital flows from the U.S. in order to sustain imports from China/Gulf and other exporters.
I am not saying gold price won't go up further, I don't know the future. But I can say, while central banks have large balance sheets, they too will get squeamish when more and more of whatever currency they buy Gold with (usually USD, not much liquidity for gold outside USD) is needed as the price goes up. And once the stock of USD (in form of reserves) is exhausted, then what? The Central Bank is stuck holding massive amounts of gold. Will they give this gold to other countries so they can use it to import from the country? I do not think so. Will they give it to the public? Then the public will be holding hoards of gold. If they do decide to sell, they are selling for local currency.
I think the hoarding gold for sanctions (sanctions can be considered kind of a voluntary default on debt by the US) risk is somewhat valid. But that again has the problem, your flows (capital, remittances, trade flows) are currently aligned with the U.S. directly or indirectly.
My point is de-dollarization is a trade and capital flow problem than 'hoards of Treasuries' problem.
One way would be purely local currency arrangements, let's take India and China. China says 'I will accept Indian Rupee (INR) at 90 for 1 CNY up to say, 835 Billion CNY' (that's how much India imported from China mostly by obtaining Dollars from elsewhere in 2025). Now, India can take Rupees it can freely issue and give to China, the PBOC or whatever Gov entity will hold INR. There you go, no need for India to obtain Dollars from elsewhere.
Rookie Trader’s Rapid 84% Wipeout Shows Depth of China Gold Bust
article
From hedge funds to homemakers, the leverage-loving Chinese traders behind gold’s record rally are now nursing big losses after one of the fastest market reversals in years.
For Merry Chen, a 42-year-old homemaker in Hangzhou, the foray into precious metals lasted less than a week. With no prior experience in derivatives, Chen opened a futures account last Monday on the advice of friends.
The initial results were promising: she gained 60% on her 1 million yuan ($144,000) investment in just 48 hours. But Friday’s sharp drop wiped out those gains and triggered a forced liquidation, leaving her with a 750,000 yuan loss, down 84% from the peak.
“I never imagined it could be this intense,” said Chen, who plans to close her account. “It felt like a trip to a casino in Macau.”
Chen’s losses are emblematic of speculators who had piled into precious metals before the Friday crash triggered widespread losses and forced liquidations of leveraged futures positions. While part of the trigger was the nomination of Kevin Warsh to lead the US Federal Reserve, which sent the dollar higher, many had long warned the metals markets were too overstretched.
Spot gold fell as much as 10% on Monday, and is down almost a fifth from an all-time high. Silver plunged as much as 16%, following a record intraday loss in the previous session..
The sharp reversal gave trend-following commodity trading advisor models at Chinese quantitative hedge funds — which typically hold commodities for 3 to 20 days — scarcely any time to adjust, according to Lv Chengtao, a partner at SHQX Asset Management. That came as non-ferrous and energy futures have also retreated, he said.
As a result, many CTA managers’ net asset values would likely have been under pressure Friday and Monday, he said.
Since such CTA holdings are often spread across a wide array of commodities and their leverage is typically lower than 300%, the drawdowns since Friday have been controllable so far, sparing most of them from forced liquidations, he said.
Still, some such funds suffered drawdowns of more than 10%, according to an executive with a Shanghai-based quantitative fund, whose firm cut most of its precious-metal futures positions last week to limit losses. He asked not be named discussing a private matter.
The decline is coming ahead of the Lunar New Year holiday, when CTAs tend to cut positions by 30%-50% to reduce risks because offshore trading continues during the week-long break, and that process of reductions has started already, according to a Shanghai-based quant fund.
Chinese banks also took measures last week to limit risks for retail investors in gold-accumulation products. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. were among those that plan to either raise the minimum deposit amount or implement quota controls.
The gold rally has been building for a number of years as central banks expanded their holdings as an alternative to the dollar. It accelerated in 2025 as global investors piled into the so-called debasement trade. Chinese speculators, including individual investors and large funds venturing into commodities, added more fuel to the gains in recent weeks.
One of China’s most well-know investors exited the trade in December. Shanghai Banxia Investment Management Center, a macro hedge fund managing more than 5 billion yuan, sold all its gold holdings in December, even as the asset is expected to hover at elevated levels rather than falling significantly, according to founder Li Bei.
Central banks including Russia’s have been selling gold, and the metal’s price is overvalued compared to its long-term equilibrium level, she said in an interview with the Securities Times’ Wechat account late last month. The opportunity costs of holding gold are very high, she said, citing a potential bull run of Chinese blue chip stocks.
With concerns over the independence of the Fed and geopolitical unrest from Venezuela to Iran making headlines, the gains in metals had become a symbol of growing distrust among investors in the US dollar.
“There’s a simple logic to it,” said Jeff, a freelance investor from Hangzhou who said his holdings of spot and physical gold accumulated over the years are now worth about $1.5 million. “The world is chaotic, so buy some gold.”
He was cautious enough not to trade leveraged gold futures, and felt even more convinced after his escape before silver’s record plunge on Friday. He invested about $500,000 in silver futures contracts and dumped all at $110 an ounce last week, yielding a 100% return.
Now, he’s looking for an opportunity to buy in for the long run, betting demand for precious metals will be underpinned by prospects of a weaker dollar, the China-US rivalry, as well as developments in artificial intelligence. Beyond Comprehension
Charles Wang, a fund manager in Shanghai, is looking at gold stock exchange-traded funds for buying opportunities. He personally invested about 3 million yuan in gold futures earlier, with three-times leverage, before selling his holding at around $3,500 an ounce and making a 30% return.
“I couldn’t wrap my head around it, so I decided to sell,” Wang said.
He bought some gold stock ETFs on Monday for products he manages, and he can gauge gold miners’ earnings prospects based on average metal prices of the past year rather than fixating on short-term price swings of the commodity.
More are adopting a cautious approach. Lu, who runs a 200 million yuan CTA fund in China, said that before the recent rally in gold, his fund gradually liquidated its positions.
“Anything above $4,800 is beyond my comprehension, hence not money I should earn,” said Lu, who asked that only his last name be used. “I’m in no hurry to jump in the market. It’s still a gambling-driven market right now, not an investment-oriented one.”
Someone has to hold the bag :P
“There’s a simple logic to it,” said Jeff, a freelance investor from Hangzhou who said his holdings of spot and physical gold accumulated over the years are now worth about $1.5 million. “The world is chaotic, so buy some gold.”
This line tells you everything about this mentality. They are buying gold because they expect others to buy gold during 'chaos'.
China needs to give Yuan for 'free' or for local currencies of other countries. Otherwise, it doesn't change the mechanism much.
Countries will export to whoever they can easily export to and obtain capital inflows from whoever will give it to them (the West) to import from China and others.
IMF managing director Kristalina Georgieva late last year called on China to fix “imbalances” in its economy, including deflation that she said had “resulted in significant real exchange rate depreciation”.
She's very happy with imposing internal devaluation ("real exchange rate depreciation") on all countries but China. However, the real solution for China's deflation is something that she can't say out loud too much, more Government spending.
can't the artifacts be explained by video compression? i think it's compression, the bitrate is shit and when he moves around it becomes apparent.
edit: "greatest minds" when he is spewing textbook macroecon lol. also, blaming clinton not for deregulation or austerity but 'getting votes from poor people by giving them homes on debt', never the bank's fault for giving such loans and making lots of money while it lasted.
edit 2: omg the glaze is crazy. epstein straight up yapping with the physics stuff, even less real detail than when he was talking finance.
edit 3: some biological essentialism, ofc. eugenics.
edit 4: bannon's glaze for him wasn't just for the interview, he actually thinks Epstein was a 'smart' 'brilliant' devil. 
True, my view is that if they are forcing me to save I would rather save in something reliable and gamble with whatever remains from my actual salary.
But I understand some people won't have much remaining savings. Nothing against anyone either way.
Cities are financially constrained (unlike the Feds) so if the city wants to fund something useful for the public (like free bus), they have to issue bonds if in deficit, they are actually borrowing money.
Of course, taxing the rich is always preferable as it reduces interest payments for the financially constrained city which may be forced to cut spending if interest payments become too much. But even borrowing by issuing bonds can be a solution (it's better mobilization of rich peoples' hoards) if higher taxes on hoarders isn't possible (due to political situation) since tax revenues tend to go up over time depending on economic activity (because of Federal Govt deficits and bank credit creation) and inflation so the debt service becomes lower. All of this depends on the interest rate. Though taxing the rich is always better looking at it from city's perspective, the rich peoples' hoards are better used by the city/state Government (except for the police and all).
I was reading this book yesterday and found something new, Chapter 23 by Michael Hudson where Canadian provinces went so far as to borrow in foreign currencies with lower interest rates but with exchange rate risk and ended up paying 25% rates effectively.
article for free
Bulgaria became the 21st member of the Eurozone on Thursday, completing a long-sought step in its European integration despite years of political instability and pro-Russian campaigning against the move.
Sofia has failed to form a stable government for nearly five years. Large protests in November led to the collapse of the latest cabinet and raised the prospect of an eighth election in as many years. Allegations of corruption and mismanagement, the absence of a 2026 budget and sustained fear-mongering by pro-Russian forces have all tainted the moment of euro adoption.
“I warmly welcome Bulgaria to the euro family,” said European Central Bank president Christine Lagarde.
“The euro is a powerful symbol of what Europe can achieve when we work together, and of the shared values and collective strength that we can leverage to confront the global geopolitical uncertainty that we face at the moment.”
What might otherwise have been a celebration of European values has proved more divisive in the Balkan country. Support for the euro stands at about 40 per cent, while opposition exceeds half the population, according to two Eurobarometer surveys conducted in 2025.
Public scepticism is driven in part by fears that retailers will round up prices during the currency conversion, as occurred in other countries after euro entry. The prolonged absence of a stable government has also undermined official efforts to defend the changeover.
Disinformation watchdogs say opposition has been amplified by a sustained campaign from pro-Russian political forces and co-ordinated messaging on social media. Parties such as the far-right Revival, along with Bulgaria’s pro-Russian president Rumen Radev, have called for a referendum on the euro.
Anti-euro activism has been led chiefly by Revival, which has organised protests across Bulgaria, some featuring Russian flags and clashes with police outside EU institutions. During one demonstration in Sofia, supporters attempted to set fire to part of the European Commission’s delegation, chanting slogans such as “No to the euro” and “We want to keep the lev”. The messaging centres on claims that joining the euro would erode national sovereignty, undermine Bulgarian identity and benefit political elites.
Goran Georgiev, an expert on Russian disinformation at the Centre for the Study of Democracy in Sofia, points to a “decades-long push by the Kremlin and its proxies to block Bulgaria’s accession first to the EU and Nato, and later to Schengen and the Eurozone.
“Bulgaria’s euro-Atlantic integration succeeded despite this, and despite systemic problems such as corruption and the lack of an independent justice system,” he said. “The reforms pledged at EU accession in 2007 are still the ones the country struggles to deliver.”
Outgoing prime minister Rosen Zhelyazkov acknowledged “challenges” ahead but said the euro would have a “long-term positive effect” on the economy. Bulgaria’s inflation rate of 5.2 per cent in November “had nothing to do with the euro”, he added.
The switch from the lev to the euro is expected to have limited immediate economic impact, as the national currency has been pegged to the Deutsche mark and later the euro since the 1990s to guard against hyperinflation.
Eurozone membership, however, gives Bulgaria a seat on the European Central Bank’s governing council for the first time, granting it a direct voice in monetary policy.
Now Bulgaria is locked in, no more option to break the currency board.
Don't like what Troika did to Greece and PIIGS? You are spreading pro-Russia propaganda.
You don't like that Eurozone member country debt have credit risk and are closer to American states than actual countries? Russian propagandist.
In Shreve, Crump & Low, a jewellery store in Greenwich, Connecticut, a Laurent Ferrier “Grand Sport Tourbillon” watch can set you back as much as $210,000. Business is brisk.
“We’re very blessed in Greenwich,” said managing partner Bradford Walker. The Swiss luxury watches, natural diamonds, sapphires and emeralds the shop specialises in are all selling well. “Demand has actually increased over the past six months.”
In the city of Bridgeport, a 30-minute drive away, demand is also rising — but for a different kind of product. People here are flocking to the city’s food pantries and soup kitchens as the high cost of living bears down on lower-income families.
“I’m living day by day,” said Jamaica-born Roselyn Macdonald, as she picked up eggs from a food bank in The Hollow, a poor immigrant neighbourhood of Bridgeport. Macdonald is unemployed and struggling to pay her bills.
‘We’re very blessed in Greenwich,’ says Bradford Walker, managing partner of a jewellery store © Pascal Perich/FT
Volunteers prepare food for people in need in Bridgeport © Pascal Perich/FT
This is the tale of two cities — a pair of communities just 30 miles apart that have experienced such contrasting fortunes they could be in different countries.
Together, they symbolise America’s K-shaped economy — a split screen where asset-owning classes have become ever wealthier while lower-income households have seen their living standards stagnate or decline.
This bifurcation has pushed the issue of affordability to the top of the US political agenda, threatening the Republican party’s prospects in next year’s midterm elections and weighing on Donald Trump’s presidency.
Fairfield County, where Greenwich and Bridgeport are situated, is one of the most K-shaped regions in America. In Greenwich, home to hedge funds including AQR, Viking Global Investors and Lone Pine Capital, the average gross income per tax return was $687,000 in 2023. In Bridgeport it was a tenth of that — just $70,500.
In Greenwich, the average gross income per tax return was $687,000 in 2023 © Pascal Perich/FT
Those disparities have got worse in recent years. “The gap is widening, not narrowing,” said David Rabin, head of Greenwich United Way, a local non-profit organisation.
The Republicans’ signature legislative achievement this year, the “big beautiful bill”, has in some cases made families’ situations worse. The legislation, which Trump signed in July, has delivered tax cuts for the rich while reducing federal funding for Medicaid, the taxpayer-funded health insurance programme for low-income Americans, and food stamps known as Snap.
According to the Congressional Budget Office, a non-partisan agency, households in the bottom decile of income distribution will lose about $1,600 per year as a result of the law, while those in the top 10 per cent will see a $12,000 annual gain.
National surveys underscore the divergence. The University of Michigan’s consumer sentiment index shows that people with investment portfolios feel significantly better about the economy than those who do not own stocks, with sentiment among non-stockholders sinking to its lowest point since the university began collecting such data in 1998.
This split is on show in Fairfield County. In Greenwich and other rich enclaves such as Darien and New Canaan, “people’s net worth and wealth has been increasing as home prices and the stock market have gone up”, said Mark Abraham, head of DataHaven, a Connecticut-based non-profit research organisation that studies social trends and public data.
“But the majority, people who are just starting out in their career or don’t own a home or don’t have a stock portfolio, they’re kind of treading water,” Abraham added.
Mendi Blue Paca, head of Fairfield County’s Communities Foundation, which awards grants to local charities, said chronic homelessness had been virtually eliminated in the area about six years ago, but since the coronavirus pandemic it had been “going gangbusters”.
“The shelters are overflowing, the pantries are overwhelmed,” she said. “And it’s not just people below the poverty line showing up for handouts — it’s the working poor, as well, who are now food insecure.”
With its waterside mansions, private beaches and Lamborghini dealerships, Greenwich — where the median sale price for a single-family home rose to $3.5mn in July from $3.1mn the previous year — is largely insulated from such problems.
The town has benefited from a stock market that hit near record highs this year: the HFRI fund-weighted composite index, a barometer of the global hedge fund industry’s health, was up more than 11 per cent by November, close to its best performance since 2016.
“There are lots of people making lots of money,” said Bruce McGuire, head of the Connecticut Hedge Fund Association. “The shops and restaurants up and down Greenwich Avenue all seem to be doing very well.”
But even in Greenwich, where 9 per cent of people live below the federal poverty line, the stresses are growing. Rabin said low- and middle-income families often struggled to come up with the $151,000 a year needed for rent, food and child care in the town. “Almost a third of the population here are one missed pay cheque away from disaster,” he said.
Rabin also noted that as a result of Trump’s tax and spending bill, about a quarter of the 850 people in Greenwich who usually receive food stamps were no longer eligible for them.
In Bridgeport, the effect of the bill will be far greater. A large share of the population depends on Snap and Medicaid, said Rhonda Neal, head of Bridgeport Rescue Mission, a charity. “If you cut [them], you’re affecting the working poor, the elderly and kids.”
Lunch is served at the Thomas Merton Center in Bridgeport © Pascal Perich/FT
The increased need is obvious at the Thomas Merton Family Center in Bridgeport, where a soup kitchen doles out plates of meatballs and pasta to a snaking queue of single men and married couples.
“Every day we have new faces coming here,” said the head chef, Kelemen. Four years ago, 125-150 people showed up for lunch: “Now it’s 200-250.”
Juan Cardona is a typical guest, a homeless ex-convict who lives in a tent. “Bridgeport is rough,” he said. “But the only way is up.”
Trump has described “affordability” as the “greatest con job”. But he has also stressed his administration is working hard to lower prices. In a speech from the White House on December 17, he blamed the high cost of living on his predecessor, Joe Biden, and claimed that inflation was being “crushed”.
People in Bridgeport are unconvinced. “Trump is the biggest liar,” said Robert Walsh, a homeless man who works as a pantry co-ordinator at the Thomas Merton Family Center. “He said he was going to bring prices down on his first day in office. Instead they’ve gone way up.”
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Regardless of what India is doing/going to do, it appears Trump is planning to cut tariffs unilaterally?