Trade has been the foundation of a European peace project after Germany led Europe twice during the last century to largest losses of lives the humanity has ever known. A fledgling customs union of six nations, founded by the Treaty of Rome on March 25, 1957, followed a successful European Steel and Coal Community – […]

An excessive and totally unnecessary U.S. interest rate cut last September has stored a problem of price instability for the next American government facing a runaway public debt, huge budget deficits and unprecedented challenges to world peace and security. The Fed’s procyclical move is a major policy error. A credit easing of the magnitude usually […]

And when that moment comes, Washington and Beijing will not be reinventing the wheel of a peaceful and productive modus vivendi. The two countries’ presidents talked -- and apparently agreed – about all those key issues during their meeting in Bali, Indonesia, on November 14, 2022. The same bilateral problems were reviewed, and updated, during […]

A 25-basis points interest rate cut this week is in the bag. But, as always, financial markets’ greed is pushing for more, prodding the Fed to “go big” -- with another quarter point bonanza. Traders have already taken some key U.S. money market rates in that direction. Will the Fed cooperate? Anything can happen in […]

Washington has blissfully ignored decades of systematic and excessive trade deficits on its merchandize trade with China. And during that time, Beijing has tirelessly lectured Washington to embrace the mantra of the “win-win cooperation” instead of a “zero sum game” of another era. Here are some numbers to show what’s at stake. Over the last […]

During most of the last decade, there was a perfect correspondence between the annual averages in the growth of world economy (3.4%) and the global trade transactions (3.4%). Last year, that relationship broke down: the world economy grew 3.3% while the volume of world trade declined 3% to a total of $31 trillion. The fact […]

That’s the reaction I got in late 1980s from one of my Wall Street contacts. Armed with a reasonably good knowledge of economics, money and banking theory and some common sense, I argued that the U.S. Federal Reserve System (the Fed) had no reason to cut interest rates to please Wall Street traders. At this […]

A badly mismanaged U.S. economy is now going through a cyclical adjustment marked by an extremely expansionary fiscal policy, price rigidities and trade flows in a world split along increasingly bellicose security fault lines. That is the general setting in which the policy making committee of the American central bank (the Fed) has to make […]

None of the currently active war theaters is nearing a peaceful conclusion. Sadly, they are becoming intractably expanding bloodbaths or uncompromising fields of confrontation. It has been decades now that the Middle East war ceased to be synonymous with Arab-Israeli fighting. The Iran-Iraq war in the 1980s lit up the fuse that led to American […]

The role of the dollar as a linchpin of the international monetary system is one of the most debated issues in the post-WWII global economy. Agreements on world trade and finance, adopted at Bretton Woods in July 1944, quickly proved inadequate. The system of fixed (but adjustable) exchange rates, and the fixed price of gold, […]

Barring major security problems in the weeks and months ahead, jobs and incomes will stay at the top of people’s concerns in the run-up to November 5 elections. Opinion polls show that those two economic variables, and the quality of economic management, have already determined the voters’ election choices. All that is very different from […]

Caught up in a war with Russia, and in increasing trade frictions with China, the current European leaders have ignored deteriorating economies at their own peril. Policies to restore the E.U.’s peace and security are nowhere in sight, and the broadening trade conflicts with China could easily get out of control. Epochal socio-political changes are […]

During an Asian forum last week American and Chinese defense ministers met to discuss their strategic and security problems. And with no progress on any of the issues, they decided to continue to talk and establish contacts between their field commanders to prevent “misunderstandings” and "miscalculations” that could lead to war in the South China […]

With a focus on Global South, the war in Central Europe, trade embargoes and sanctions, the Group of Seven -- the West’s key economic and political forum -- will deliberate in its standard framework of “liberal democracies vs. autocracies” during the meeting in Italy on June 13 – 15, 2024. Put simply, that will be […]

The wars in Europe and in the Middle East, ongoing military confrontations in the South China Sea and nuclear capable ballistic missile firings on the Korean Peninsula are all part of a global fight between West’s “liberal democracies” and “autocratic societies.” There is nothing “hybrid” or “proxy” here. It’s a shooting war -- with nukes […]