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looking beyond borders

foreign policy and global economy

Archive for the tag “Central Banks”

The Secret History Of The Banking Crisis

The new central bank network created since 2008 is of a piece with the new networks for stress testing and regulating the world’s systemically important banks. The international economy they regulate is not one made up of a jigsaw puzzle of national economies, each with its gross national product and national trade flows. Instead they oversee, regulate and act on the interlocking, transnational matrix of bank balance sheets. This system was put in place without fanfare. It was essential to containing the crisis, and so far it has operated effectively. But to make this technical financial network into the foundation for a new global order is a gamble.

Read Here – Prospect

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The World’s $100 Trillion Question: Why Is Inflation So Low?

Central bankers and investors are grappling with a $100 trillion question: why consumer price inflation remains so low in most parts of the world even as economic growth quickens. Compounding the riddle, question marks are now emerging over the one part of the global inflation picture that had been moving higher — producer prices.

Read Here – Bloomberg

Secular Stagnation: The Dismal Fate Of The Global Economy?

China has many levers to pull economically, and stagnation and lower potential growth are relative. But the global hunt for economic growth by central banks will be a persistent source of volatility in financial markets. Without the ability to jump start their economies using traditional monetary policies, central banks will use unconventional policies more often in attempts to remain competitive globally and search for increasingly elusive growth spurts. Larry Summers may have been more correct than he knew.

Read Here – The National Interest

China Stock Plunge Hits World Stocks, Dollar; U.S. Stabilizes

World stock markets plunged on Monday, after a near 9 percent dive in China shares and a sharp drop in the dollar and major commodities sent investors rushing for the exits. After dropping more than 1,000 points, or almost 7 percent, at Wall Street’s open, the Dow Jones industrial average eased losses but was still off more than 1 percent at midday. The Standard & Poor’s 500 index was down by a similar margin after the U.S. benchmark earlier dropped nearly 10 percent below its record.

Read Here – Reuters

Emerging Asia Can’t Just Rely On China

If you think Federal Reserve Chair Janet Yellen is stressed, spare a thought for Agus Martowardojo. On Tuesday, the governor of Indonesia’s central bank had to choose between cutting interest rates to support growth or hiking them to prop up his currency. He ultimately decided to split the difference and do nothing. Martowardojo’s dilemma is emblematic of the increasingly chaotic situation in the world’s emerging markets.

Read Here – Bloomberg

The New Asian Bank Becoming A Reality

China says that 30 countries have been approved as prospective founding members of the Asian Infrastructure Investment Bank (AIIB).

Read Here – Xinhua

If It’s Gold, It’s Asia

Courtesy: World Gold Council

Alternate Diplomacy

Chinese president Xi Jinping has certainly kept China experts busy since he came to power in 2012. Xi has made major changes to Chinese policies, domestic and foreign. These policies have been quite different from those of his predecessors, keeping China scholars occupied explaining their meaning and implications.

Read Here – The Diplomat

Who Is The Bigger U.S. Creditor?

Differing views have been expressed in the debate on who is going to be the biggest US creditor. However, it is certain that China and Japan will remain as the top 2 creditors for the foreseeable future.

Read Here – Global Times

Man-Made Stagnation

The near-global stagnation witnessed in 2014 is man-made. It is the result of politics and policies in several major economies – politics and policies that choked off demand. In the absence of demand, investment and jobs will fail to materialize. It is that simple.

Read Here – Project Syndicate

 

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