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 […]
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
China’s $3.8 trillion of currency reserves are the largest stockpile ever amassed. Economists have long seen that money as a strength — the ultimate rainy-day fund should China’s shadow-banking system blow up. Trouble is, the value of those holdings depends on China’s $1.3 trillion of U.S. Treasuries. If they plunge in value, all hell breaks loose […]
Since 1976, the US dollar’s role as an international currency has been slowly waning. International use of the dollar to hold foreign-exchange reserves, denominate financial transactions, invoice trade, and as a vehicle in currency markets is below its level during the heyday of the Bretton Woods era, from 1945 to 1971. But most people would […]
As hundreds of thousands of Filipinos struggled to find food, water, shelter and the bodies of loved ones in the wake of Typhoon Haiyan, China quickly dipped into its world-leading $3.7 trillion of currency reserves and came up with … all of $100,000, William Pesak writes. Read Here – Bloomberg
The five countries known as the BRICS have 43 percent of the world’s population, $4.4 trillion in currency reserves, and generally healthier economic growth than Europe and the U.S. Yet to their frustration, Americans and Europeans still dominate policymaking at the World Bank and the International Monetary Fund. Should the five—Brazil, Russia, India, China, and […]
Six years ago, Chinese Premier Wen Jiabao cautioned that China’s economy is “unstable, unbalanced, uncoordinated and unsustainable.” China has since doubled down on the economic model that prompted his concern. Mr. Wen spoke out in an attempt to change the course of an economy dangerously dependent on one lever to generate growth: heavy investment in the […]
Since World War II’s end, the dollar has been used to invoice most global trade, serving as the intermediary currency for clearing international payments among banks and dominating official foreign-exchange reserves. This arrangement has often been criticized, but is there any viable alternative? The problem for postwar Europe, mired in depression and inflation, was that […]
Weaken the yen: That has been a desperate plea by the captains of Japanese industry for years as the strong currency has hurt such exporters as Sony and Toyota. Reversing the yen’s rise was a major goal of Liberal Democratic Party leader Shinzo Abe during his successful campaign against incumbent Prime Minister Yoshihiko Noda last month. Sure […]
China’s foreign exchange (‘forex’) reserves and its holdings of U.S. government debt are two of the most frequently misunderstood issues in relations between the two countries. Recent events have underscored this problem. On September 18th, a car carrying Gary Locke, the U.S. Ambassador to China, was surrounded and partially attacked in a sideshow to an […]
looking beyond borders 