Pretzel contortions are part of the diplomatic game. In the Rising Powers Year in Review (read here), we called North Korea’s violence against the South and advanced uranium enrichment program the biggest surprise of 2010. South Korean President Lee Myung-bak’s New Year’s message today (see BBC article) has kept up the West’s diplomatic contortions — stand […]
In the Rising Powers Year in Review this week, we cited North Korean aggression as the most unexpected development of 2010 and China’s tightrope walk over the issue as a key dynamic to watch in 2011. China is at once the nuclear rogue’s chief benefactor and a rising power with global responsibilities; hence the high wire act. An interesting NYTimes […]
In the Rising Powers Year in Review, we highlighted North Korea’s heightened belligerence and the advanced state of its uranium enrichment as 2010’s most unexpected developments. Today, the NYTimes reports that the North appears to be threatening to use nuclear weapons and the South continues its military exercises. New Mexico Governor Bill Richardson, who has […]
Overview 2010 is nearly gone, so what’s in store for the world’s rising powers and their status quo partners? 2011 threatens to be a year of discord. Keep an eye on two fronts: economic policy and geopolitics. Will the great and the good continue to coordinate policies to improve the functioning of the global economy […]
The Economic Commission for Latin America Monday said it expects GDP growth to slow in the region to 4.2% from 6% this year. This forecast makes sense. A slowdown will be driven by tighter macro policies across the region that seek to stem inflationary pressures, as well as slower growth in the advanced economies and China, limiting demand for […]
The critics of the Federal Reserve don’t get it. Here are two articles in the WSJ and NYTimes that describe the withering ideological attack the US central bank has sustained since the onset of the global financial crisis. In recent posts, Nov. 15 and Nov. 18, I have argued that deflation risk is real and requires unorthodox thinking and action by […]
Latin America appeared in force at the G-20 Summit in Seoul. Two of the three Latin American presidents there were women, Presidents Dilma Rousseff of Brazil and Cristina Fernandez de Kirchner of Argentina, who likewise represented half of the female leaders at the G-20. Unprecedented. Latin interests in the G-20 are diverse, given Argentina’s heavy […]
Thank God he does! Earlier this week I wrote a piece (click here) about money men who don’t understand country risk writing investment letters prescribing economic policy to the US government. Bill Gross, founder of mega-bond fund, Pacific Investment Management Co. (PIMCO) out of sunny Newport Beach CA, criticized the Federal Reserve and its policy […]
The prevailing view coming out of the G-20 Summit last week is that US monetary policy is as much to blame for the precarious state of the global economy as is China’s exchange rate policy. A deluge of dollars is causing a speculative bubble in emerging markets. This analysis is wrong. U.S. monetary policy should be kept just where it […]
Very nice, short piece today from CSFB (below) on what China is doing to correct the global imbalances (i.e., to reduce its trade surpluses, which mirror US and other countries’ trade deficits) and to shift its economy to a healthier foundation based on domestic demand. While President Obama gets pre-election press pressuring China’s prime minister […]
Coming from me, a defense of Barack Obama may surprise my readers. That’s because they may not have read the fine print! Some of his policies I haven’t exactly agreed with (principally, the expensive health care reform, which at a time of rapidly rising sovereign debt, was imprudent). I reluctantly supported Obama for president in 2008 […]
China is an economically successful country. Growth rates of 8-11% per year. Fx reserves north of $2.4 trillion, closing in on 20% of US GDP. Investment rates that represent 40-50% of GDP (vs. 15-20% in the US). Private credit growth of 32.5% last year, vs. 5.6% in the U.S. A Human Development Index that now stands at 49.7, […]
The Economist’s lengthy Special Report on Latin America last week is worth a read (see leader below), even though it failed to emphasize and adequately explain two critical causes of the region’s recent success — 1) the consensus among Latin American politicians that conquering inflation has benefitted the poor and strengthened democracy; and 2) the massive build-up in fx reserves that […]
Machiavelli, more than any thinker in history, made his name synonymous with a type of human behavior — self-interested, cunning, ruthless. He wrote about ancient Rome as well as Italy and the Mediterranean world of the 15th-16th centuries, extolling such leaders as Ferdinand of Aragon, the successful king of Spain who oversaw his empire’s aggrandizement, as well […]
Fitch Ratings today published a press release revising the “Outlook” on its “BBB” rating of Russian government bonds to positive from stable (see a Fitch press release below). Rating agencies – Moody’s, Standard & Poor’s and Fitch – have been under fire since their high structured real estate ratings were downgraded rapidly during the recent financial […]