Regular readers are familiar with the thesis that currency wars lead to trade wars and finally to shooting wars. This was the sequence in Europe and Asia from 1921 to 1939, and something similar is playing out today. The new currency war started in 2010 and the new trade war began in 2018. Both the
Russia is not the only country engaged in financial warfare with the United States. China and Iran are also in the thick of it. The China-Iran linkage is critical to both countries. China is the second largest economy in the world and the fastest growing major emerging market. China has a voracious appetite for energy,
While the financial wars envelop more countries, the original financial war adversary gets even more aggressive. Russia has been in the crosshairs of the U.S. since their Crimea annexation in 2014. U.S. sanctions have included bans on leading individuals, prohibitions on capital markets activities by top Russian corporations, trade sanctions, secondary boycotts and more. Russia has
The U.S. has been highly successful at pursuing financial warfare, including sanctions. But for every action, there is an equal and opposite reaction. As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely. To read more of this article, click here.
In 2013, the U.S. successfully kicked Iran out of the global payments system called SWIFT, (Society for Worldwide Interbank Financial Telecommunications). SWIFT in the nerve center of the global financial network. All major banks transfer all major currencies using the SWIFT message system. The U.S. had previously banned Iran from the dollar payments system (FedWire),
We’ve been warning for years about efforts of Russia and China to escape what they call “dollar hegemony” and create a new financial system that does not depend on the dollar and helps them get out from under dollar-based economic sanctions. These efforts include buying gold, selling U.S. Treasury securities, buying more special drawing rights
A popular notion is that data-adaptive machine models are the nee plus ultra of modeling technology that will make human involvement in model-making obsolete. However, the scope of data-adaptive models is fundamentally limited by the scope of the data available to train them, which is necessarily restricted to historical and/or categorical data, and by the scope of
As this article attests, and as investors know well, gold is at a low for the year and the dollar is at a 2018 high. This is based in part on the customary inverse reciprocal relationship between the dollar and the dollar price of commodities. A strong dollar means low commodity prices and a weak dollar means
For members of a certain generation (raise your hands!), driving with drugs in the car was risky business. The police might profile you because of long hair or Peace bumper stickers, pull you over based on a flimsy excuse like a “dirty” license plate, conduct an illegal search of the car on a pretense, find
Headlines and TV interviews are dominated by talk of the U.S.-China trade war. That escalating confrontaion is a big deal, but it’s not the only flash point in U.S.-China relations, and not even the most important. As explained in this article, China is as much concerned about a military confrontation in the South China Sea as
