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looking beyond borders

foreign policy and global economy

Archive for the tag “Currency war”

Revealed: The Great Chinese Economic Transition Is Here

If China is indeed making the transition it has long said it wishes to make, it would look like what we are now seeing. Both the IMF and the World Bank have in recent months pointed to compelling evidence that the transition is well under way, and it’s one of which they heartily approve. It’s remarkable that last year consumption growth in China contributed more to GDP growth than did the growth of investment. Remarkable, too, that half of the overall growth of output was contributed by services rather than by heavy industry.

Read Here – The National Interest

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Nobody’s Talking Of A U.S.-China Currency War. Why?

Little noticed during last weekend’s milestone summit between Barack Obama and Xi Jinping was another landmark event: China’s currency hit a record high, reaching almost 6 yuan to the dollar.

In recent years, one of the few things Republicans and Democrats could agree upon was that an artificially cheap yuan damaged U.S. exports and stole U.S. jobs. The currency’s climb thus seemed like a nod from China’s president to America’s, a quiet signal that Xi understands how sensitive the issue is. During Obama’s time in office, in fact, the yuan has risen more than 10 percent in value. Talk of a currency war has faded.

Read Here – Bloomberg

The BRICS Expose the West’s Hypocrisy

Who do they think they are, these upstart economies, Brazil, Russia, India, China and South Africa?

That might sum up the feeling in the U.S., Europe and Japan as the BRICS nations consider a new development bank that might challenge the World Bank and International Monetary Fund. The move brings to mind Alice Amsden, the Massachusetts Institute of Technology economist who died last year, and her 2001 book, “The Rise of ‘the Rest.’”

Read Here – Bloomberg

How Dollar Diplomacy Spelled Doom for the British Empire

“The British Empire seems to be running off almost as fast as the American loan,” Winston Churchill thundered before the House of Commons on Dec. 20, 1946. “The haste is appalling.” As if secretly synchronized, the pillars of empire and the international acceptability of the pound sterling were crumbling in tandem. In late 1945, President Harry S. Truman’s administration had grudgingly agreed to provide the bankrupt U.K. with a $3.75 billion loan — but on the condition that the pound sterling be made fully convertible to dollars at the rate of $4.03 to the pound by July 15, 1947.

Read Here – Bloomberg

Phoney Currency Wars

OFFICIALS from the world’s biggest economies meet on February 15th-16th in Moscow on a mission to avert war. Not one with bombs and bullets, but a “currency war”. Finance ministers and central bankers worry that their peers in the G20 will devalue their currencies to boost exports and grow their economies at their neighbours’ expense.

Read Here – The Economist

China’s Next Step on Yuan Is Convertibility, Zhou Says

China’s central bank governor said convertibility will be the next step in the overhaul of the exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth.

“For the central bank, I think the next movement related to the yuan is going to be reform of convertibility,” Zhou Xiaochuan said at a conference in Beijing on Nov. 17. “We are going to realize it, we are moving in this direction, we need to go further, we will have some deregulation.”

Read Here – Bloomberg

How to Negotiate Peace With Honor in Global Currency Wars

Brazil’s president, Dilma Rousseff, and her finance minister, Guido Mantega, are attacking the U.S. Federal Reserve for embarking on a third round of quantitative easing. By aggressively buying bonds, the Fed aims to push interest rates lower, and that will nudge the dollar down as well.

This will hurt Brazil and other developing-country exporters, Mantega says, and what’s more, it’s meant to. To him, the U.S. has declared “currency war.”

Read Here – Bloomberg

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