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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

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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Archives

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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Focus on U.S. Economy; Leave the EU, Russia and China Alone

Bill Clinton got us into African, Balkan and East European quagmires, and Bush (W) finished it off with unwinnable Iraq and Afghanistan military adventures. Obama continued to struggle with that difficult legacy -- adding a Libya civil war of his own -- before experiencing an epiphany and telling the nation about it on June 22, […]

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“Love Thy Neighbor” Is a Solution to Sino-Indian Security Tensions

After a violent clash in Himalaya’s Galwan Valley between Indian and Chinese border patrols in June 2020, large parts of India’s business community decided to boycott trading with China. In spite of that, China last year displaced the U.S. as India’s largest trade partner. India’s bilateral trade with China increased 5.5% to $86.4 billion, while […]

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The EU Wants No Trade War with China

With a bilateral trade volume of €586 billion, China last year edged out the U.S. to become the EU’s largest trade partner. That trend was significantly amplified in the first seven months of this year. During that period, the EU trade with China was running 7% ahead of its trade business with the U.S. The […]

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The Euro Area Can Return to a Stable Economic Growth Path

A strong recovery from the monetary union’s deep recession in the middle of last year has generated very little price inflation in labor and product markets. That now makes it possible to withdraw an exceptionally large monetary stimulus without compromising a gradual return to growth rates that are compatible with the economy’s long-term noninflationary potential. […]

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Can China Square Its East Asian Circles?

Japan is a big disappointment for China. In spite of incredible atrocities and material destructions Japan committed during its war with China between 1931 and 1945, Beijing accepted to talk about peace, friendship, trade and investments with its eastern neighbor in late 1970s. Over the following four decades, China became Japan’s most important export market […]

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Economics Are Writing a New Page of Pax Americana

The idea that the U.S. is withdrawing from the world and abandoning its key foreign policy objectives is manifestly false. Anybody capable of reading mainstream media can see that every day. There is a change, though. Gripped by binding fiscal and monetary constraints, the U.S. is just looking for more affordable, and – hopefully – […]

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Allies Will Take the U.S. Trade Income, But They Won’t Follow the U.S. to Confront China

Continuing a long tradition of driving the global business cycle, America gave 1.6% of its domestic demand during the first half of this year to support economic activity in the rest of the world. America continued to buy more goods and services than it sells to its global trade partners. That is called a trade […]

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The Dollar Will Remain the World’s Key Currency for the Foreseeable Future

Legions of greenback naysayers go back a long way. In the immediate post-WWII years, the Europeans were bitterly complaining that chronic dollar shortages (sic) were sapping the recovery of their war-ravaged economies. And when Washington moved to help with more liberal provisions of dollar liquidity, the French began adding up Uncle Sam’s debts to show […]

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