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Dr Ivanovitch - MSI Global
Dr. Michael Ivanovitch is an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York and taught economics at Columbia Business School. 
Daily updates on world economy
Rising U.S. inflation is a threat to economic growth
China’s huge and growing domestic market drives the economy
The euro area survives on easy money and not much else
Flattening U.S. yield curve does not reflect rising inflation

Recent Essays

Der Euro Spricht Latin – and the Germans Don’t Like It

To reassure Germans that the new European currency – the euro -- will be under Berlin’s control, Germany’s former finance minister Theo Waigel said at the time the euro was launched (January 1999) that “Der Euro Spricht Deutsch” (the euro speaks German). That was an arrogant swipe at fellow Europeans by a reunited Germany (October […]

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Inflations and Recessions Are Always Caused by Errors of Monetary Policy

That is the key – and unassailable – tenet of monetary theory. The corollary is that the fiscal policy’s long-run impact on economic activity is zero, or even negative. The rejoinder, offered by the British economist, John Maynard Keynes, the proponent of government spending (to fill the void of the weakening household consumption, business and […]

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Japan’s Weakening Yen Is a Structural Issue

The global demand for the Japanese currency has been on a steady downward trend ever since Tokyo chose in 2012 to invigorate its export-driven economy with an unending avalanche of yen liquidity. Over the last nine years, the yen has lost 35.4% of its trade-weighted value. Nearly one-third of that exchange rate loss occurred during […]

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The World Economy Needs Peace, Openness and Free Trade

In the coming months, the global economic growth and employment creation will be driven by an exceptionally strong monetary and fiscal stimulation in the trans-Atlantic community. China will continue to be the main trade beneficiary of the turbo-charged Western economies. With an inflation rate of only 2.5%, Beijing will also have plenty of room to […]

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A Trade Agreement That Will Write the Future of Asia

Asia’s Regional Comprehensive Economic Partnership (RCEP) -- the world’s latest and by far the largest free-trade area -- enters into force on January 1, 2022. It consists of the ten countries of the Association of Southeast Asian Nations (ASEAN) plus China, Japan, South Korea, Australia and New Zealand. This important trade pact is the ASEAN’s […]

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Archives

Inflation and Capacity Pressures Will Stifle Economic Growth in Trans-Atlantic Community

Official claims of “benign” and reversible price inflation dynamics in the U.S. and in the euro area are vacuous debating points among financial markets and short-term forecasters at the monetary authorities in Washington and Frankfurt. For the time being, markets are gun-shy and following the Wall Street’s old adage: “Don’t fight the tape …” – […]

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East Asia’s Booming Regional Trade

Major East Asian economies are sound, well balanced and advancing at steady and sustainable growth rates. The data for the third quarter of this year indicate that those economies are growing in the range of 1.2% and 4.9% set by Japan and China, with Indonesia and South Korea in the upper part of that interval. […]

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Economic and Security Issues Threaten Market Stability

The U.S. and euro area inflation rates are high and accelerating, leaving no room for complacent and implausible forecasts of temporary and reversible price pressures. The U.S. Federal Reserve has come around to the view that the annual consumer price increase of 6.2% last October (4.6% corrected for food and energy prices) is taking place […]

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The Euro Area’s Brewing Clash Over Fiscal Policy

Compared to America’s 12.4% of GDP budget deficit for the fiscal year 2021, the euro area’s narrowing budget gap to 6.9% of GDP in this year’s second quarter looks like a paragon of virtue. Indeed, something to cheer about, because the monetary union’s deficit was nearly halved over the previous twelve months. Even the area’s […]

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Economy – Not Warmongering – Will Determine the New World Order

Taiwan and the Ukraine are the most absurdly debated global casus belli. China does not need to invade its own province to protect the territorial integrity of internationally recognized One-China borders. Beijing has other means of doing that. And people irresponsibly and disingenuously egging on Taipei hotheads will not initiate a nuclear Armageddon in the […]

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The Dollar Is Telling a Different Story of the U.S. Economy

Disastrous public finances, a relentlessly accelerating inflation, the sinking consumer confidence and a presidency struggling with falling approval ratings are all the U.S. media headlines. That the dollar is not getting a cheer is perhaps normal, because even well-informed and sophisticated New Yorkers would be hard put to tell you what the greenback was doing […]

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The U.S. Monetary Policy Faces Tough Business and Election Pressures

American lawmakers have taken a lot of mystery and guesswork out of the Federal Reserve’s interest rate policies. Public disclosure rules and Congressional testimonies now provide the information and the time horizon of a decision process about a fundamental variable driving key economic and political events in the United States. The interest rate we observe […]

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West’s G20 Issues: Rising Inflation, Public Debt and Deficits

Putting the Covid-19 pandemic and the climate change at the center of the Rome’s G20 agenda was a diversion from the organization’s core concerns. A quick reminder will clarify that puzzling forum attribution. The G20 (an organization of world’s 20 largest economies) was created in 1999 as a talking shop of finance ministers and central […]

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The Euro Is Safe Because It Serves a Successful Customs Union

The outgoing German Chancellor Angela Merkel is a lucky lady. Despite presiding, during her 16 years in office, over the sinking fortunes of two European unions, she remains a media darling and a revered leader for most of her EU colleagues. The center-right union of German CDU/CSU parties she led lost the election with a […]

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The Euro Area Inflation Is Driven by Bad Energy Policies

The first official estimate indicates that consumer prices in the 19 countries of the European monetary union rose last September at an annual rate of 3.4% -- marking a strong acceleration from minus 0.3% during the same month of 2020. Excluding energy prices, the inflation was a relatively tame 1.9%, given the fact that this […]

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