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looking beyond borders

foreign policy and global economy

Archive for the tag “currency”

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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Welcome To The Brave New Multi-Polar World

It’s a story about the tail that wagged the dog that didn’t bark that isn’t in Kansas anymore. The dog that didn’t bark is commodity prices, and the tail that wagged is the Chinese yuan.

Read Here – Asia Times

How India’s Cash Chaos Is Screwing Over Their Neighbours — Oops!

Nepalese citizens hold an estimated $500 million in the banned notes, most of them sent back as savings by the more than one million Nepalese nationals working in India, says Chiranjibi Nepal, governor of the country’s central bank, the Nepal Rashtra Bank. Yet seven months after the ban, India has yet to exchange those notes with valid ones. Talks are on with India’s central bank, he says. As for Bhutan, its nationals hold $16 million in defunct Indian notes, says Dasho Penjore, governor of the country’s central bank, the Royal Monetary Authority.

Read Here – Ozy

Will Trump Destroy The Dollar?

Under President Trump, it is possible, for the first time in a generation, to imagine a concerted attack on the central bank. Conceivably, the United States could repeat the story of the mid-1960s and ’70s, when a 15-year period of central-bank independence was brought to an end by presidential bullying. Back then, Lyndon B. Johnson summoned the Fed chairman, William McChesney Martin Jr., to his Texas ranch and shoved him around the living room while proclaiming that low interest rates were imperative in a time of war.

Read Here – The Atlantic

The Battle Of Three Centuries

Twenty years ago next month, the British government gave the Bank of England the freedom to set interest rates. That decision was part of a trend that made central bankers the most powerful financial actors on the planet, not only setting rates but also buying trillions of dollars’ worth of assets, targeting exchange rates and managing the economic cycle. Although central banks have great independence now, the tide could turn again.

Read Here – The Economist

Has Summer Brought A New Optimism About The Russian Economy?

Markets have soared: the ruble is the best-performing emerging market currency this year, up over 20 percent since late January against the dollar, and equities have posted double-digit gains. Russian markets have benefited from a range of macroeconomic and technical factors—a moderate pickup in oil prices, a search for yield by investors punished by low or negative interest rates in the industrial world, and a sense that the worst effects of the sanctions are in the past.

Read Here – cfr,org

What Good Is A United Europe To America?

With less than a month until British citizens vote on whether the U.K. should stay in or leave the European Union, Americans could be forgiven for being preoccupied with their own political dramas. Still, President Obama conspicuously weighed in on the British debate in April, writing in The Daily Telegraph “with the candour of a friend” that the vote’s outcome would be “of deep interest to the United States.”

Read Here – The Atlantic

Russia’s Great Shift Downward

For Russia’s battered economy, 2016 already looks miserable. The ruble has slumped to record lows as oil prices have fallen 11 percent since Jan. 1, to around $30 a barrel. The government, which gets nearly half its revenue from oil and gas, is scrambling to plug a 1.5 trillion-ruble ($19.2 billion) hole in its budget.

Read Here – Bloomberg

Is China The Next Mexico?

Of course, it is hard to compare anywhere else to China given the sheer scale of the People’s Republic and its transformation. And yet, much like Mexico in the 1990s, China has long been ruled by a one-party dictatorship that has outgrown its ideological purity (all lip service aside) in favor of a widely acclaimed technocratic pragmatism. If there is a social contract in China, it boils down to the government telling its people: You all pretend to be communists, and so will we; but we’ll actually allow you to become wealthier by not being real communists, so long as you don’t rock the boat and play along.

Read Here – Zocalopublicsquare

Pakistan’s Debt Dynamic

An oft-overlooked aspect of Pakistan’s debt situation is the political economy. There is an inherent asymmetry between the ‘benefits’ derived from new debt undertaken, and the burden of its repayment. There are two facets worth considering. First, those segments who tend to ‘benefit’ from the debt contracted (the elite) are usually different from those who bear the incidence of the debt burden (the less affluent).

Read Here – Dawn

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