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Posted by on Feb 14, 2017 in Dennis Gartman, Market Insight

US & Japanese Relations:  A Sensible Way Forward

US & Japanese Relations: A Sensible Way Forward

February 13, 2017

Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.

The forex market is breathing a sign of collective relief and the dollar is trading quietly on either side of the levels that prevailed and were marked here on Friday following the rather pleasant “summit” meetings over the weekend between Japan’s Prime Minister, Mr. Shinzo Abe, and President Trump. We expand upon that in our “political commentary”, but suffice it to be said that the currency question appears not even to have been brought up at the extended meetings and golf shared by the two political leaders. Instead, the relations between the US and Japan were shown to be on the most stable grounds, with President Trump making it quite clear that the US stands “100%” behind Japan in almost all instances.

Importantly, a “high ranking,” but apparently anonymous Japanese official, told the press that President Trump and the Prime Minister had designated Vice President Pence and Deputy Prime Minister Taro Aso as the ones to coordinate fiscal, monetary, trade and infrastructure policies going forward. This, we think, is a very good thing, for this will take these talks to the back channels where they should be rather than at the very front channels where the publics’ misunderstanding of these sorts of things can be avoided. Presidents and Prime Ministers are the front lines and are subject to any and all sorts of political vagaries; Vice Presidents and Deputy Prime Ministers can quietly avoid such concerns.

While on the topic of foreign dignitaries meeting with President Trump, today Canada’s Prime Minister, young Mr. Trudeau, will be in Washington to meet with Mr. Trump. The topics of trade and immigration are expected to be on the table during their talks. Sadly, Mr. Trudeau has already set a difficult “table” for the talks, having said late last week during a visit to Yellowknife in Canada’s Northwest Territories that he intends to speak “frankly and respectfully” with the President. As we have learned… but as Mr. Trudeau apparently has not learned… the term “frank” in the protocols of foreign relations means that the talks went badly. One does not talk of “frank” talks before the talks are actually begun! That is simply not done.

Mr. Trump, however, apparently has not learned the finer rules of diplomacy either, however, so we fear what might evolve out of this meeting. At least, Mr. Trudeau seems to be a strong, consistent supporter of the NAFTA and of free and/or freer trade and we shall give him credit for that before the meeting begins.

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