Boiling Pots: Currency and Trade; Climate Change; and Mass Shootings

Posted in , By David Robinson

Several critical fronts are heating up. The U.S. trade war with China has expanded, with the U.S. imposing more tariffs and China “weaponizing” its currency. Our earth is experiencing its warmest months on record. Meanwhile, mass shootings are proliferating in the U.S. Are one or more of these pots about to boil over?

We first offer some excellent background articles on the currency conflict, the major story for the financial markets. Our opinions on climate change and the mass shootings are not necessarily more informed than our readers, so we limit ourselves to a few brief observations on these profoundly concerning topics.

With interest rates falling, mortgage refinancing should be on the planning radar screen. A thoughtful client asked how one of his children should save for college, which led us to share some education funding best practices and strategies. Coffee gets another rave health review. We also hope that you will enjoy two Maine related articles, one on Monhegan Island, one of our favorite places, and the other about what makes Portland a fantastic stop for traveling beer lovers. Lastly, we hear from a psychologist, who claims that we are wired to worry too much about what is going on in the world-needed that!

  • China Devalues Its Currency: China recently permitted its currency to fall below the symbolic 7 renminbi per dollar level. The devaluation makes China’s exports more competitive. It also stimulates demand for its domestic products, as imports are now more costly. (Investopedia) On a strategic level, the devaluation sends a warning to President Trump that China is unafraid to play its cards, including waiting to see what happens in the U.S. 2020 presidential election.
  • Currency Wars Are Risky: President Trump is making noise about devaluing the dollar, but currency devaluation is an ultra-risky game to play. It might help U.S. exports but would make dollar denominated assets less attractive to own. (New York Times)
  • Goldman Sachs Sees No China Trade Deal Soon: Goldman Sachs now predicts no trade deal before the next presidential election and forecasts two more rate cuts by the Fed in 2019. (Reuters)  
  • It’s Getting Hotter! June and July were apparently the hottest months on record. (Huffington Post) Irrespective of the causes, it is next to impossible to deny the reality of global warming, which will bring immense human suffering and unparalleled economic challenges. Why isn’t planning for global warming a national policy priority?
  • Mass Shootings: We are neither psychologists nor sociologists but are concerned that these horrific crimes are becoming contagious. If disturbed individuals, with access to weapons, see others getting publicity and somehow living out their horrible fantasies, are more individuals increasingly likely to plan their own shootings? Somebody please tell me these fears are unfounded.
  • Mortgage Rates Low: Falling interest rates present borrowers with an opportunity to lower their borrowing costs. This may be a historic opportunity. (CNBC)
  • College Savings Strategies: Here are six ideas to get you started. (savingforcollege.com) We have a surprising number of clients talk with us about how to help their children afford college for the grandchildren, so some specific ideas for grandparents. (Wall Street Journal)
  • Coffee, A Wonder Drug? Coffee is an acquired taste that not everyone enjoys. But if you do there are likely to be some significant health benefits. (Inc)
  • The Magic of Monhegan: In many ways, Monhegan Island represents the essence of Maine to me. Picture it through the words of a California travel writer. (Los Angeles Times)
  • Cheers to Portland! We came across more great publicity for Portland. A travel article named Portland first in great cities for beer lovers to visit around the world. (CNN)
  • Are We Wired to Worry? This psychologist believes that we tend to overreact to bad news and lack perspective. (Washington Post)

Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.

david-robinson

About the Author David Robinson

A wealth advisor with more than 25 years of experience in the financial field, Dave serves as Robinson Smith Wealth Advisors’ Co-Chief Investment Officer and is a Co-Managing Member of the firm. As a Certified Financial Planner® and non-practicing attorney, he provides clients with deep expertise in areas including investment management and retirement planning.
Disclaimer and Disclosures: Past performance is no guarantee of future results. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Our opinions are subject to change without notice as market and economic conditions shift.