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 …
Tag: USA
Trump’s options to deflate Μarket Βubbles
As future Secretary of Health and Human Services Robert Kennedy Jr. said, “a revolution is coming,” in reference to Trump’s election in the recent U.S. election. Depending on one’s political perspective, such a “revolution” is either music to the ears or “American-style fascism.” Nothing will change the polarized views of those who have already chosen …
Anger over high cost of living has brought down 70% of governments in developed countries
Donald Trump’s victory over Kamala Harris and the Democrats in the November 5 elections represents part of a broader phenomenon: Most governments in developed economies have been swept away by public anger over rising prices. And this despite the mainstream media and political elites saying that inflation has been… defeated and everything is returning to …
What will investors punish after the failure of the FED?
A paradoxical phenomenon occurred in the course of US interest rate cuts: Instead of falling, they moved higher in the medium term. The Federal Reserve cut its key interest rate by half a percentage point in September, raising expectations that other interest rates will soon begin to cut as well. By contrast, two-year and 10-year …
The impact of Trump’s duties will be limited – what will happen to the dollar?
Much is said and heard of the Trump economic policy and its impact on both the US and the rest of the world. The dominant media, as they propagated the defeat of the Democratic candidate, so they sow trampophobia – they forget, of course, to say that the economy worldwide was going on in Trump. …
The new era of tariffs and the return of economic nationalism
One of the most surprising developments in the recent American political debate has been the bipartisan consensus against free trade. Just a decade ago, Democrats and Republicans generally championed free trade as part of their support for the neoliberal order—unimpeded movement of goods and capital. But with the 2024 presidential election, both Republican Donald Trump …
All roads lead to inflation – USA & EU on Japan’s path
The recent 50 basis point rise in long-term bond yields began the day after the Fed cut interest rates by 50 basis points (base rate 4.75% to 5%). Some of the bond bears argue that the Fed will reignite inflation by cutting interest rates as the economy remains strong. Others fear that fiscal deficits are …
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 …
The “Talented” Persistent Inflation that won’t go away
Inflation in the US fell to 2.4% against forecasts for a slowdown to 2.3%. On the other hand, “core” inflation recovered to 3.3%, against forecasts that it would remain unchanged. At the core, services inflation rebounded from 4.3% to 4.4% and accelerated strongly from 0.1% to 0.6% month-on-month (this is the part of the core …