Beijing has a powerful tool to respond to President-elect Donald Trump’s threatened new tariffs on Chinese goods: it could launch a currency war, a step that carries dire risks for both China and the United States — and certainly for the global economy. Depreciating the value of China’s currency, the yuan, against the dollar would …
Category: Market Analyses
Analyses and articles for world financial markets
EU will suffer a loss of 260 billion from Trump tariffs – Markets crash from -15% to -20%
If Donald Trump follows through on his promises and imposes tariffs on European goods imported into the US, then the continent will truly be plunged into a deep recession. Donald Trump’s victory could hurt Europe’s economy, as the proposed 10% US tariffs risk hitting European exports such as cars and chemicals, eroding Europe’s GDP by …
The Global Debt Crisis is just around the corner
The bond market and dollar index have begun to sensitize to the potential implications of another Trump victory. The ten-year yield has increased by 55 bp. after the Federal Reserve cut interest rates in mid-September. Americans who have been waiting for rate cuts are once again battling with their mortgage rates starting with the digit …
Bets against the euro-dollar parity are increasing dangerously
Anticipation of the risk of the euro slipping against the dollar is rising in financial markets after last week’s rate cut and the scenario that a Donald Trump presidency could spark a global trade war. Days after Trump suggested that US tariffs could target Europe as well as China and other countries, European Central Bank …
Currency War: Why It’s Not Time to Short the Yuan?
As the “Trump trade” returns – again – fueling concerns of new geopolitical turmoil, hedge funds worldwide are scrambling to short the Chinese yuan. They are betting that Trump’s tax and trade policies, if elected, will strengthen the dollar, with China seeking a more competitive exchange rate as domestic growth slows. But if the last …
Ten Signs That the Economy and Markets Are a Huge Mess
The economy is the number one issue, by a wide margin for voters, in the all-important state of Pennsylvania (Rasmussen Reports “More Americans Optimistic About Economy“). Unfortunately for Democrats, most Americans are not happy with how the economy is performing, and it appears that conditions have taken a turn for the worse. The following are …
How is one global reserve currency replaced by another?
Over the past century, monetary systems have changed about every 30-40 years on average, according to the evidence of monetary history. Today, the existing monetary system is over 50 years old, so its transformation is long overdue. There are persistent attempts by different states to dethrone the US dollar as the world’s leading reserve currency …
Cutting Interest rates is a path full of Landmines
In a reduction in policy interest rates – for the first time in 4 years – by 50 bp. in the range of 4.75% to 5%, the Federal Reserve (Fed) advanced, in an attempt to stimulate the growth of the US economy, to satisfy investors and to raise the morale of the Democrats, especially the …
Why ‘easy money’ caused a bubble in tech companies?
From the beginning of 2022, it is known that the main trend in the technology industry was “artificial intelligence”. While the concept isn’t new — AI is the term many believe has been used to describe the way computers work since at least the 1980s — it has once again captured the imagination of the …
The fake Digital Currency Bubble and the Market Economy
Why according to some “experts”, is there an urgent need to eliminate cash from the economy? The emergence of money and its transformation into a commodity Money appeared because exchanges of goods (countertrade) could not support the market economy. A butcher who wanted to trade his meat for fruit might not be able to find …