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looking beyond borders

foreign policy and global economy

Archive for the tag “Dollar”

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

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The Risks To America’s Booming Economy

The US has experienced a decade of excessively low interest rates, which have caused investors and lenders to seek higher yields by bidding up the prices of all types of assets and making risky loans. The danger is that overpriced assets and high-risk loans could lose value and cause an economic downturn.

Read Here -Project Syndicate

We Live In A Bearish World

At HSBC’s global investment seminar in New York last week, some of the top strategists from Europe’s largest bank laid out their outlook for global markets and economies.
Many strategists are not expecting the current recovery from the financial crisis to be as impressive as what has come before, while some investors aren’t expecting double-digit returns in the near term.
Additionally, strategists are losing faith that the Federal Reserve will actually raise interest rates anytime soon.
Read Here – Business Insider

China Has Lots of Treasuries, Not Much Leverage

During the last U.S. presidential election, an editorial in a Chinese state-run newspaper declared that if Washington insisted on flouting Chinese interests (by selling arms to Taiwan, for example), Beijing should “use its financial weapon to teach the U.S. a lesson.” Three years later, America owes even more to China than the $1.16 trillion it owed then. But the increase in debt holdings hasn’t translated to an increase in leverage; quite the opposite, writes William Pesak.

Read Here – BloombergView

China Wants Great Power, Not Great Responsibility

Forty-three years after Richard Nixon made his famous visit to China, that country has seemingly decided to take a page from the former U.S. president’s Treasury Department. As China lowers the value of the yuan, the country’s economic policy makers are mimicking the blasé attitude of Nixon-era Treasury chief John Connally, who dismissed international complaints about U.S. monetary policy with a curt remark: “It’s our currency, but it’s your problem.”

Read Here – Bloomberg

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

Americans Buy A Fifth Of China’s Exports

Americans bought almost $1 out of every $5 worth of goods that China exported in May, the highest share since August 2010. While Chinese shipments to trading partners including Japan, Europe and South Korea tumbled last month from a year ago, those to the U.S. climbed 7.8 percent. That helped make America the destination for 18.8 percent of China’s exports, outstripping all others.

Read Here – Bloomberg

America’s Self-Inflicted Wounds

Several recent developments reveal how political and institutional fragmentation in the United States has produced self-inflicted wounds for the U.S. abroad. In all of these instances, America’s ability to exercise economic power in the world has been deliberately curtailed through decisions made unilaterally in Washington by American political leaders.

Read Here – The Atlantic

The Rise of China as India’s Major Geopolitical Challenge

The extent of the shift becomes clearer when you look at the US-China equation. We are today dealing with a China whose accumulation of power is unprecedented in history, in both pace and extent. In 1990 the US economy was eight times the size of China’s. Today, in less than a quarter century, the two economies are roughly level. And they depend on each other. The balance of economic and political power has shifted. The balance of military power is also shifting, though at a glacial rate, much, much slower than the economic shift.

Read Here – The Wire

Going Abroad With The Yuan

The internationalization of China’s currency is underway, albeit with some important hurdles still to clear.

Read Here – The Diplomat

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