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looking beyond borders

foreign policy and global economy

Archive for the tag “financial markets”

U.S. Deficits Are Hurting Emerging Markets

Thanks to the dollar’s outsize global role, the first casualties of a somewhat irresponsible U.S. fiscal policy are likely to be emerging economies that have used the dollar to denominate their debts, not the United States itself. A stronger dollar and rising U.S. interest rates are increasing the burden of paying all dollar-denominated debts around the world.

Read Here – Foreign Affairs

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China’s Looming Financial Crisis

Governor of the Reserve Bank of Australia Philip Lowe’s speech last week highlighting the risks to the Chinese financial system from shadow banks – non-bank financial institutions often operating in more lightly regulated wholesale markets – has once again drawn attention to the major economic risk in China.

Read Here – Lowy Institute

China Tiptoes Toward Massive Retaliation In Trade War

As Cui, China’s man in Washington, suggests, Xi’s team is now “looking at all options.” While Trump doing his worst with tariffs is worrying, the idea of Xi pulling the plug on the dollar is positively terrifying. Trump must remember that even though he runs the biggest economy, Xi holds the deed.

Read Here – Asia Times

The Biggest Threats To China’s Economy In 2018

China’s economy begins 2018 facing what its own leaders call three years of “critical battles.” Those fights to tackle domestic debt, poverty and pollution pose a hat-trick of risks to the world’s No. 2 economy even before higher interest rates and trade war threats from the U.S. are taken into account. While the nation is starting from a position of strength, with full-year growth in 2017 poised for its first acceleration since 2010, the expansion is seen slowing in 2018.

Read Here – Bloomberg

From Bitcoin to Belize, Here Are Best And Worst Assets Of 2017

It was a great year for copper, Ukrainian stocks, palladium. Uzbekistan’s currency, Venezuelan bonds and sugar not so much. It was a great year to hold bitcoin, but a bad time to have been invested in the Uzbek soum.

Can Xi Jinping Head Off The Grey Rhinos In China’s Economy?

Common sense goes that the first step in solving any problem is recognising there is one. But if one ignores the problem and allows it to balloon to the edge of a crisis before recognising the severity of the issue, that means common sense has long gone out the window and all one is left with is a mess or even worse. That is what has happened with China’s massive and fraud-ridden financial system in which a herd of “grey rhinos” brazenly grew, charged around, and punched big holes, threatening to sink the system with a full-blown systemic crisis.

Read Here – South China Morning Post

Extraordinary Measures For Ordinary Times

The legacy of 2007 is still with us. Its most devastating and destructive effect was to put a premium on unconventional monetary measures. Unfortunately, when policymakers scrambled in search of “big bazookas” ten years ago, they set the stage for the return of an old character: a strongman willing to pull the trigger.

Read Here – Project-Syndicate

Once A Model City, Hong Kong Is In Trouble

When Hong Kong returned to Chinese rule two decades ago, the city was seen as a model of what China might one day become: prosperous, modern, international, with the broad protections of the rule of law…Yet as the 20th anniversary of the handover approaches on Saturday, that perception of Hong Kong as something special — a vibrant crossroads of East and West that China might want to emulate — is fading fast.

Read Here – The New York Times

Has Asia Learned From The 1997 Crisis?

Reform is always easier when a crisis leaves policy makers no other options. But without further change, Asia will continue to rely too much on debt instead of productivity gains for growth. In poorer nations, improvements in household welfare will lag. As in the years before 1997, economic irregularities could build up to the point where the region faces another crisis. Will the next Kim Dae-jungs be there when you need them?

Read Here – Bloomberg View

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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