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RichardbBrunner

Category Archives: Economy

Russia, China, and Money

29 Tuesday Mar 2022

Posted by RichardB in China, Economics, Economy, news, Politics, Research

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China, economics, reserve currency, Russia, world

The Russia-led Eurasia Economic Union and China just agreed to design the mechanism for an independent financial and monetary system that would bypass dollar transactions.

“The Eurasian Economic Union (EAEU) and China agreed to design the mechanism for an independent international monetary and financial system.”

Say hello to Russian gold and Chinese petroyuan. https://thecradle.co/Article/columns/7975

The Eurasian Economic Union: Deals, Rules and the Exercise of Power
Regardless of its multiple shortcomings, the Eurasian Economic Union (EAEU) should not be dismissed out of hand. For Russia, it is the primary vehicle for realizing a global geopolitical agenda.
Chatham House Research Paper. https://www.chathamhouse.org/2017/05/eurasian-economic-union

Russia and China, Together at Last: At the core of recent conflicts is an entente between China and Russia that the world hasn’t seen since the start of the Cold War.

“At their February 4 meeting, Putin and Xi drew on 37 prior encounters to proclaim nothing less than an ad-hoc alliance meant to shake the world. As the foundation for their new “global governance system,” they promised to “enhance transport infrastructure connectivity to keep logistics on the Eurasian continent smooth and…make steady progress on major oil and gas cooperation projects.” These words gained weight with the announcement that Russia would spend another $118 billion on new oil and gas pipelines to China. (Four-hundred billion dollars had already been invested in 2014 when Russia faced European sanctions over its seizure of Crimea from Ukraine.) The result: an integrated Sino-Russian oil-and-gas infrastructure is being built from the North Sea to the South China Sea.”

Russia and China Together at Last. https://www.thenation.com/article/world/russia-and-china-together-at-last/

Reserve Currency part 2

22 Tuesday Mar 2022

Posted by RichardB in China, Economics, Economy, news, Politics, Uncategorized

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China, China and Russia form a new economic block, Economy, reserve currency

Before the yuan can become a global currency, it must first be successful as a reserve currency. That would give China the following benefits:

The yuan would be used to price more international contracts. China exports a lot of commodities that are traditionally priced in U.S. dollars. If they were priced in yuan, China would not have to worry so much about the dollar’s value.
All central banks would have to hold yuan as part of their foreign exchange reserves. The yuan would be in higher demand. That would lower interest rates for bonds denominated in yuan.
Chinese exporters would have lower borrowing costs.
China would have more economic clout in relation to the United States.
It would support President Jinping’s economic reforms.

China is working hard to make the yuan the next global currency. Although presently a reserve currency, the yuan can’t upstage the U.S. dollar unless the following scenarios happen:

Central banks around the world choose to keep a total of at least $700 billion worth of yuan in foreign exchange reserves.
The People’s Bank of China (PBOC) allows free trade of the yuan and relaxes its peg to the U.S. dollar.
The PBOC becomes straightforward about its future intentions with the yuan.
China’s financial markets turn transparent.
Chinese monetary policies are perceived as stable.
The yuan acquires the U.S. dollar’s reputation of stability, which is backed by the enormity and liquidity of U.S. Treasurys.

Reserve Currency

15 Tuesday Mar 2022

Posted by RichardB in Economics, Economy, Politics, Uncategorized

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currency, economics, Foreign Policy, reserve

A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international transactions, international investments and all aspects of the global economy. It is often considered a hard currency or safe-haven currency.

The United Kingdom’s pound sterling was the primary reserve currency of much of the world in the 19th century and first half of the 20th century.[1] However, by the middle of the 20th century, the United States dollar had become the world’s dominant reserve currency.[2] The world’s need for dollars has allowed the United States government to borrow at lower costs, giving the United States an advantage in excess of $100 billion per year.

John Maynard Keynes proposed the bancor, a supranational currency to be used as unit of account in international trade, as reserve currency under the Bretton Woods Conference of 1945. The bancor was rejected in favor of the U.S. dollar.

A report released by the United Nations Conference on Trade and Development in 2010, called for abandoning the U.S. dollar as the single major reserve currency. The report states that the new reserve system should not be based on a single currency or even multiple national currencies but instead permit the emission of international liquidity to create a more stable global financial system.

Countries such as Russia and the China, central banks, and economic analysts and groups, such as the Gulf Cooperation Council, have expressed a desire to see an independent new currency replace the dollar as the reserve currency. However, it is recognized that the US dollar remains the strongest reserve currency.

China’s loans

15 Friday Oct 2021

Posted by RichardB in China, Economics, Economy, news, Politics

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China, loans, news

An interesting read from FT AlphaVille:

“China is the world’s biggest lender to governments. And that’s not just because of its gigantic stockpile of US Treasuries. For much of the past decade Beijing has sought to plug massive infrastructure funding gaps across multiple continents through its Belt and Road Initiative. The overarching aim, other than to bolster global influence, is to upgrade transport links on the old silk road routes which enabled trade between the Far East and what lay to the west of it.” More HERE at FT. You may have to register (for free) to read this article.

Supporting articles: How China Lends Data Sets from AidData and How China Lends PDF from The Peterson Institute for International Economics.

DW: Why central banks are racing to launch digital currencies

08 Friday Oct 2021

Posted by RichardB in Economics, Economy, news, Politics

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money, news

Texas Fossil Fuel Harvesting

01 Friday Oct 2021

Posted by RichardB in Economy, news

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Fossil Fuels, Texas

In West Texas, vast quantities of methane, a powerful greenhouse gas, are leaking into the atmosphere. Specialized cameras that can detect the invisible pollutant are helping to expose the problem.

How a $450 Million Loss Was Hidden From Sight

09 Friday Jul 2021

Posted by RichardB in Economics, Economy, news

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banking scandals

11 years after one of Europe’s biggest banking scandals, 13 executives have been sentenced and financial penalties of $175 million have been dealt. Bloomberg investigates how Deutsche Bank and Monte Dei Paschi cooked their books to make a half billion dollar loss disappear. Reporting by Elisa Martinuzzi for Bloomberg.

Watch “Will China become the centre of the world economy? | FT” on YouTube

02 Friday Jul 2021

Posted by RichardB in China, Economics, Economy, news

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China, money, world

Rethinking capitalism | DW Documentary

11 Friday Jun 2021

Posted by RichardB in Economics, Economy

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capitalism, rethinking

More and more entrepreneurs are thinking beyond their own personal wealth. In what is known as the “Purpose Movement,” company bosses aim to put profits to good use, while rethinking the idea of corporate ownership. This film explores how the movement is rethinking capitalism. The founders and CEOs involved in the global Purpose Movement believe in transforming society: Their ownership model ensures that a company’s shareholders cannot withdraw profits, the company cannot be sold and its purpose cannot be changed. Christian Kroll founded search engine Ecosia in 2009. The profits are used to plant trees to combat climate change. Advertising revenue has so far financed the planting of more than a hundred million trees. Kroll could have sold Ecosia for many millions of euros long ago, but the founder wanted to protect his company from speculators. The trees were more important to him than his bank balance. That’s why he used a foundation model to transfer ownership of Ecosia in 2018, effectively cutting himself out. The model makes it impossible to sell Ecosia for profit, to withdraw company capital, or to change the company’s purpose, which is planting trees. Armin Steuernagel advises entrepreneurs who also want to “give away” their companies. His Purpose Foundation advises start-ups wanting to establish themselves as “purpose companies,” like Hamburg’s Wildplastic, which produces garbage bags from recycled material. Steuernagel wants us to rethink capitalism. As a political lobbyist, he is working to create a legal framework to help facilitate the shift to “purpose companies.” Michael Hetzer ran the German family-owned company Elobau, which manufactures sensors and other parts for agricultural machinery. Instead of deciding to leave the business to one of his sons, he transferred the company to a foundation model. He wanted to take the burden off his sons’ shoulders. And for him, the purpose of his company is important.

How Prince Andrew Helped a Secretive Bank Woo Sketchy Clients / Bloomberg

28 Friday May 2021

Posted by RichardB in Economics, Economy, news

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Prince Andrew, Scandal, Secretive Bank

Embattled royal Prince Andrew used his status to help promote a secretive private bank, whose clients included kleptocrats and alleged criminals.

Greensill, Gupta and Cameron: what went wrong | The Financial Times

21 Friday May 2021

Posted by RichardB in Economics, Economy, news

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Scandal, The Financial Times

The story of Greensill Capital’s rise and fall has everything: investment banks, opaque finance, private jets, trophy mansions and the biggest British lobbying scandal in a generation, involving former prime minister David Cameron. The Financial Times charts the rise of Lex Greensill and Sanjeev Gupta and examines where it all went wrong.

Scottish independence: could Britain break up? | The Economist

20 Tuesday Apr 2021

Posted by RichardB in Economy, news

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Scottish independence, The Economist

The China Economic Risk Matrix: Pinpointing the Dangers in China’s Financial System

25 Friday Sep 2020

Posted by RichardB in Economics, Economy, news

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China, CSIS, Economy

CSIS: The China Economic Risk Matrix, written by the Trustee Chair in Chinese Business and Economics’ non-resident senior associate Daniel Rosen, non-resident adjunct fellow Logan Wright, and Associate Director of the China Projects team at Rhodium Group, Lauren Gloudeman. Despite rising inefficiency, China’s financial system has served as the shock absorber that has helped China’s economy recover from the virus outbreak and maintain growth. But the same elements that have driven China’s recovery have also pushed China’s financial system deep into a gauntlet of systemic financial risks. The China Economic Risk Matrix is the combination of indicators of financial vulnerability that threaten to overwhelm Beijing’s policy tools to manage them, along with a novel, China-specific financial stress indicator. Building on the earlier CSIS volume, Credit and Credibility, this report explores the specific conditions and markets in which changes in government credibility can have a significant impact on systemic stability in China.

America’s Jobs Recovery |Public Debt

13 Sunday Sep 2020

Posted by RichardB in Economics, Economy, news

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Economy, news

The U.S. unemployment rate shot up faster than in any other developed country during the pandemic. WSJ explains how differences in government aid and labor-market structures can help predict how and where jobs might recover.

The covid-19 pandemic is set to increase public debt to levels last seen after the second world war. But is rising public debt a cause for concern? New economic thinking suggests perhaps not, at least for now.

The U.S. Economy: Paul Krugman

31 Friday Jul 2020

Posted by RichardB in Economics, Economy

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Economy, news

Economy Disrupted: Challenges and Change at Home and Abroad

28 Tuesday Jul 2020

Posted by RichardB in Economics, Economy

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challenge, Economy

Stockmarket v economy: the impact of covid-19 | The Economist

19 Sunday Jul 2020

Posted by RichardB in Economics, Economy, news

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covid-19, Economy, Stockmarket

U.S. Economy Grew by 2.3%

26 Saturday Jan 2019

Posted by RichardB in Economy, global, news

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Economy, GDP, news

The economy grew at an annual rate of 2.3 percent in the first quarter, the government reported Friday, offering a preliminary glance at how last year’s sweeping package of tax cuts is affecting consumers and businesses this year.

During the first three months of 2018, the economy was whacked around like a pinball. The stock market took investors on a giddy ride. President Trump imposed tariffs on allies and rivals alike, stoking fears of a trade war. And the revamped tax code shifted business incentives and started to put more money in workers’ paychecks.111gdp1q18_adv_chart

Still, the economy ended up puttering along just a bit above the average yearly growth rate that it had registered since the recession ended nearly nine years ago.

Read More:
https://www.nytimes.com/2018/04/27/business/economy/gdp-economy.html

https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

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