Whether it was wrongly predicted the demise of globalization for what seems like years. Now, given the war in Ukraine and other disruptions, many are once again sounding its death knell. Is it really in retreat. The streams of goods, the real touchable substance, have leveled off after nearly twenty years and above of growing at twice the rate of Gross Domestic Products (GDP). But the flows of goods kept pace with GDP and even…
Major crises always come out of distortions. At the level of the global financial system, the basic problem has been the undervaluation of Asian(managed) exchange rates that have led to trade deficits for Western economies, forcing on them the choice either of macro accommodation or recession. The choice of easy money policies results in excess liquidity, asset bubbles, and leverage. Distortions always come through major crises. In the global financial system, the problem has been…
Inflation is on the increase around the world, with food and energy prices hitting record highs. The rise has been driven in large part by pent-up consumer demand after the pandemic and the Russian invasion of Ukraine. As usual, the question to all is when it can expect to ease. April saw a CPI (consumer price index) very high across the world. Driven by food and energy costs in the wake of the Covid-19 pandemic,…