Kevin Warsh Is in for a Rude Awakening
For years, Kevin Warsh, Donald Trump’s nominee to serve as the next chair of the US Federal Reserve, has been staking out policy positions that would almost certainly backfire if put into practice. Fortunately, market conditions and the rest of the central bank’s board will still have a say in monetary policymaking. NEW YORK – […]
The Coming Crypto Apocalypse
The future of money and payments will feature gradual evolution, not the revolution that crypto-grifters promised. Bitcoin and other cryptocurrencies’ latest plunge further underscores the highly volatile nature of this pseudo-asset class; one only hopes that policymakers will wake up to the risks before it’s too late. NEW YORK – A year ago, the most […]
The Real Existential Threat Facing Europe
Contrary to what far-right leaders claim, Europe’s greatest challenge is not immigration or “wokeness,” but its own economic and technological backwardness. With productivity growth lagging and innovation increasingly taking place elsewhere, Europe must confront its structural weaknesses or risk falling further behind. NEW YORK – US President Donald Trump’s new National Security Strategy offers a […]
The Unavoidable Crash
NEW YORK – The world economy is lurching toward an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades. In the private sector, the mountain of debt includes that of households (such as mortgages, credit cards, auto loans, student loans, personal loans), businesses and corporations […]
More War Means More Inflation
NEW YORK – Inflation rose sharply throughout 2022 across both advanced economies and emerging markets. Structural trends suggest that the problem will be secular, rather than transitory. Specifically, many countries are now engaged in various “wars” – some real, some metaphorical – that will lead to even larger fiscal deficits, more debt monetization, and higher […]
Sleepwalking on Megathreat Mountain
DAVOS – A host of interconnected “megathreats” is imperiling our future. While some of these have been long in the making, others are new. The stubbornly low inflation of the pre-pandemic period has given way to today’s excessively high inflation. Secular stagnation – perpetually low growth owing to weak aggregate demand – has evolved into […]
India at a Crossroads
NEW DELHI – India is poised to become the world’s most important country in the medium term. It has the largest population (which is still growing), and with a per capita GDP that is just one-quarter that of China’s, its economy has enormous scope for productivity gains. Moreover, India’s military and geopolitical importance will only grow, and it is […]
The Coming Doom Loop
NEW YORK – In January 2022, when yields on US ten-year Treasury bonds were still roughly 1% and those on German Bunds were -0.5%, I warned that inflation would be bad for both stocks and bonds. Higher inflation would lead to higher bond yields, which in turn would hurt stocks as the discount factor for dividends rose. But, at the […]
No Respite from the Slow-Motion US-China Collision
NEW YORK – I recently attended the China Development Forum (CDF) in Beijing, an annual gathering of senior foreign business leaders, academics, former policymakers, and top Chinese officials. This year’s conference was the first to be held in person since 2019, and it offered Western observers the opportunity to meet China’s new senior leadership, including new Premier Li […]
America and China Are on a Collision Course
NEW YORK – Following the May G7 summit in Hiroshima, US President Joe Biden claimed that he expects a “thaw” in relations with China. Yet despite some recent official bilateral meetings – with US Secretary of the Treasury Janet Yellen expressing hopes for a visit to China soon – relations remain icy. In fact, far from thawing, the new […]