Dennis Gartman Steps In Number Two

Last week in Kitco News, Mr. Gartman wrote a piece on his perspective of the Trump election win. He says, "Trump's potential tariffs would be massively deflationary." He compares it to the disastrous tariff bill in 1930. How wrong can one be? Not only is he way off base about tariffs, but he sides with the wrong reasons that made the Great Depression. He adds his opinion that protectionism caused the depression when it was the central bankers to which the status quo love. The Federal Reserve misdirects like a magician. They used their influence along with a partnership of the elites to fend off responsibility for the crash. They are the real culprit for the lost economic decade.
The Smoot - Hawley Tariff Act of 1930 added tariffs, but mostly in the agricultural industry. The global community retaliated with their own protectionist measures which caused a slump in world trade. With that said, the real death blow was caused by two central bankers doing their market manipulations. Their actions crushed the bond and currency markets.
In the US, the Federal Reserve raised interest rates which hurt investment and added expenses to all companies. Their timing could not have been worse. By strengthening the dollar, we lost market share in exports. In England, the British closed the gold standard. This action caused chaos in international currencies. These two actions were way more devastating than the tariff bill, but the power to write history whitewashes the central bankers mistakes.
Three Reasons Gartman Is Wrong
First off, tariffs cause imports to be priced higher. This hurts our consumers who lack choice. Trump is providing a cushion for domestic producers who can provide the consumer with a choice. If the consumer can buy a US product for the same price as an import, they will buy American. There will be a period of higher inflation, but prices will stabilize back to the law of supply and demand. As for the global community retaliating, let them. We only export 14% and it is items that will be purchased anyway. We sell food. You buy if you are hungry. We sell tech because we invented it. The global community has no choice. We can even stop outsourcing by making domestic production more feasible. We were once a self-reliant nation. We can do it again.
Secondly, producers will need workers to make the products that we use to make. This means jobs with better wages and our GDP will rise. We stop our decline in our standard of living. This provides more local and state revenues to meet long put off projects. This creates more jobs and services.
Finally, our national deficits shrink because those taxes on imports are revenues for our government. What was once a negative with money flowing out of the country becomes a positive with money flowing into our nation.
Dennis is out of touch. He forgot the words of wisdom from Rodney Dangerfield who said, "Always look out for number one, but don't step in number two."