In The News

Crash in US Dollar Coming: Bloomberg

Stephen Roach June 9, 2020
The Covid-19 pandemic may end the US dollar’s status as primary reserve currency, warns Yale economist Stephen Roach. The pandemic and high unemployment pressure US living standards and spending even as world leaders question US leadership and notions of exceptionalism. Current account deficits since 1982, a recent shortfall in domestic US savings and fast-expanding government budget deficits...

Argentina in Default: Buenos Aires Times

June 3, 2020
Two rating agencies, Fitch and S&P reduced Argentina’s bonds to default status after the nation missed a $US500-million payment. Negotiations for debt restructuring are underway, with the hopes of agreement and possible rise in the bond rating. A lower rating forces nations to pay higher interest rates. Argentina’s public debt is 90 percent of GDP at the end of 2019. The Covid-19 pandemic has...

Covid-19 Stimulus: South China Morning Post

Nicholas Spiro May 15, 2020
Central banks around the globe organize massive stimulus programs from central banks, but these are not without risk. By reducing interest rates and rapidly investing in a range of assets to prop up prices, central bankers hope to save jobs and prevent a long economic depression. Governments already holding heavy debt extend rescues to a range of businesses, including some that would have failed...

China Could Cut US Debt Holdings: SCMP

Karen Yeung May 7, 2020
As tensions between the United States and China rise, analysts point out that China could reduce its holdings of US treasury securities. The United States borrows heavily to pay for its Covid-19 response, and the administration blames China for the pandemic. News reports suggest that some US officials have questioned if the $1 trillion in debt owed to China could be cancelled. Such an extreme...

EU and COVID-19 Economic Crisis: Financial Times

Ben Hall, Martin Arnold and Sam Fleming March 30, 2020
The European Central Bank plans to expand asset purchases by €750 billion over the next nine months, aimed at preventing a profound depression. Such a plan boosted the bond market in Europe, leading to decreased finance costs of EU member governments. Even though the ECB’s monetary interventions can partly alleviate the downward pressure on the economy, deeply divided national leaders focus on...

COVID-19 Debt Deluge: Project Syndicate

Jayati Ghosh March 16, 2020
Crises immediately expose any weaknesses in public infrastructure, and COVID-19 will reveal needs in public health and economic systems. Societies realize that privatization and cost-cutting for health care for vulnerable populations expose all citizens to infection, explains Jayati Ghosh. Analysts anticipate a recession with supply chain disruptions and entire regions locked down. “A world...

Central Banks Line Up to Rescue Markets: Asia Times

Umesh Desai March 15, 2020
Financial markets fell sharply during the second week of March, rivaling the 1987 plunge. Central banks try to stabilize economic systems hit by the health crisis of COVID-19. “Expectations of fiscal support measures are rising in addition to the deep rate cuts by various central banks already included in bond prices,” explains Umesh Desai for Asia Times, describing how a new series of liquidity...