Benjamin Cole | The last filmy slips of fabric have been stripped away, and macroeconomists must now view the once-romanced US Congress in flagrante delicto with a real paramour: Mr. Big Bucks Deficits. From here, a premise of Federal Reserve monetary policy must be that it takes place alongside $1 trillion annual deficits.
“I am “the king of debt”. That was very grandiose for me as a businessman, but it’s bad for the US. I made a fortune with debt, I will sort out the US”. This is the kind of tweet which would ruin anyone’s political career, with the exception of one person: Donald Trump.
Jerome Powell is bound to have a crash landing in the Federal Reserve. From the very beginning of his mandate, pressure is mounting on him to raise rates. An unpalatable choice for someone who hoped to follow Janet Yellen’s wait-and-see stance for as long as he could.
Athanasios Dimadis and Hung Q. Tran | US is not alone in its worry about debt and deficit. According to the International Institute of Finance statistics, China poses the biggest threat to global economic stability, its total debt having risen astronomically over the last decade. The eurozone is still trying to heal the scars of an enduring economic crisis, with Greece’s unmanageable debt remaining a significant problem.
It’s clear that the prices of physical and financial assets are growing a lot, while debts are increasing strongly. As experience shows, it’s difficult for everything to get back to normal systematically.
Draghi is nervous because the dollar has begun to fall, messing up his plan to withdraw stimulus from an economy which is increasingly more dynamic.
American president Donald Trump reportedly disparaged immigrants from Africa, El Salvador and Haiti on Thursday, asking his advisors, “Why are we having all these people from shithole countries come here?” Trump then suggested that the United States should bring more people from countries like Norway, whose prime minister he met a day earlier.
Deutsche Bank’s shares fell again yesterday (-0,97% added to the 5.16% drop on Friday) after releasing a profit warning for the 2017 fiscal year. This is due to the negative impact of the tax reforms in the US and worse figures in investment banking as a result of low trading levels.
2018 may be the year of the infrastructures. Perhaps it won’t be the best or the most efficient plan which emerges. But what’s clear is that something has to be approved which allows Donald Trump to cut the ribbons on motorways, bridges and other more or less large structures.
The United Kingdom can no longer count on the unequivocal support of its allies and the country’s exit from the European Union is already taking a toll on its international clout.