"He said that, but he meant this......" -- We may hear that quite a bit over the next 4 years

Steven Mnuchin will head the Treasury Department as part of the incoming administration. RICHARD DREW/A

"He said that, but he meant this......"  --  We may hear that quite a bit over the next 4 years

ref :- General

Just a quick thought on Presidential Inauguration Day ...... Steven Mnuchin  ,incoming Treasury Secretary, has been trying to clarify what President-elect Donald Trump (as he still is, just) meant when he said the other day that the dollar was too strong. Mr Trump's words caused something of a reversal for the US unit and taken with his obvious protectionist enthusiasm they leave the popular assumption of continuing dollar strength a little less certain.

Mr Mnuchin has effectively said "yes, the dollar's too strong right now, and that's what Mr Trump was referring to, but medium to long-term a strong currency is important". Oh, right .... if you say so. The first part of the equation is simple enough : an over-strong currency gives an unfair trade advantage to the US' competitors, particularly the Chinese as Mr Trump will no doubt keep reminding us. The second part is an acknowledgement that in the wider scheme of things a strong currency is desirable for any nation that values its role as a destination for incoming foreign investment  --  which it must if it's running a current account deficit.

We're sure that Mr Trump understands that basic priciple ...... it's just that , whatever Mr Mnuchin might say, there's no obvious sign that it has formed any part of his thinking up to now.

Even Trump supporters, in fact especially Trump supporters if they have to deal with the fallout, must be worried about his propensity to shoot from the hip without perhaps giving full consideration to the wider picture  --  a problem made all the more awkward by a twitter habit that must surely be restrained somehow now that he's entering the Oval office. Mr Trump was obviously appealing to his blue-collar base in manufacturing and exporting that has suffered in recent years. His trouble in calling for a weaker dollar though is that a weak currency is merited by weak economies, and by comparison with its developed world competitors, the US as a whole is certainly not that.

Don't expect anything likely to strongly influence markets today  --  even "The Donald" might baulk at upsetting accepted protocol in his inauguration speech. Like all new Presidents, he'll try for the inspirational. In fact. new Press Secretary Sean Spicer hinted that the new President might verge on the philosophical. If that's true, we will certainly be seeing a side to him that we've not seen before (or even suspected existed). But Mr Spicer also said that Mr Trump will get right down to business after he's officially become POTUS.**  

We assume that he's unlikely to give us any details about his reflationary fiscal policy (it's all been a bit quiet on that front), so it's Trade that will get his immediate attention. That means withdrawal from the TPP (Trans-Pacific Pact) , some robust remodelling of NAFTA (North American Free Trade Agreement) and plenty of ruffled feathers right from the off.

Hail to the Chief .....

  

** We're still smiling at the old news that Mr Trump suggested that his Secret Service nickname should be "Humble". Clearly, this is a man much misjudged and one with a well-developed sense of irony.