Any de-dollarization process must account for the fact that countries and business actors will still issue debt securities, bonds, and other instruments in dollar form to meet their capital needs, both regular and emergency, owing to the volume and liquidity provided by the “flexible capital account” standard of the United States. Read More Here
With a $1.6 trillion deficit this year, $35 trillion in overall debt, and $1 trillion in interest payments this year, if the U.S. dollar is no longer the primary global reserve currency and there is suddenly a true rival to the U.S. currency, then the entire American financial system comes crashing down. Read More Here
The US Federal Reserve and the European Central Bank have made clear that they intend to roll back quantitative easing by reducing their bond holdings. But the other driver of central banks’ balance-sheet expansion for the past 15 years – the provision of abundant reserves to the financial sector – remains up for debate. Read […]
After two years of quantitative easing, central banks have begun to shrink their balance sheets, and liquidity seems to have vanished in the space of just a few months – revealing acute financial-system vulnerabilities. Read More Here
Just as a fixation on core inflation can mislead central banks, as it has done with the US Federal Reserve, the power of a “core leader” like China’s Xi Jinping is a recipe for misdirected and ultimately unsustainable policy regimes. Read More Here
For decades, relative global stability, sound economic-policy management, and the steady expansion of trade to and from emerging markets combined to keep costs down. But now all these conditions have been overturned, and the world is settling into a dangerous and destabilizing new regime. Read More Here
The crisis triggered a wave of structural reforms that undoubtedly strengthened East Asian economies to the point where they were relatively unaffected by the Great Recession in 2008 and 2009 great financial recession. Read More Here
The US dollar has long played an outsized role in global markets, but central banks aren’t holding the greenback in their reserves to the extent that they once did. Read More Here
With fiscal policy having gained fresh prominence, governments must carefully calibrate their policies in the pandemic’s aftermath. Read More Here
Prices of non-fungible tokens remain high for now and may continue to increase for some time, but a crash will come. With central banks set to tighten monetary policy in an effort to rein in inflation, new and untested asset classes are likely to be punished harder than more reliable ones. Read More Here
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