Interesting website with oodles of info and graphics expressing said info: Trading Economics provides its users with accurate information for 232 countries including historical data for more than 300.000 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Our data is regularly checked for inconsistencies and based on official sources; with the World Bank, the International Monetary Fund, central banks and national statistics bureaus being the most important. TradingEconomics.com has received more than 20 million page views from more than 200 countries.
On the 250th anniversary of Adam Smith’s The Wealth of Nations, this episode revisits a book that laid the foundations of modern economics and then considers the tensions between free markets and industrial policy today. It highlights the ways in which specialization and global trade remain powerful drivers of prosperity, reflecting Smith’s insight that self-interest can benefit society when shaped by competition and institutions, while noting the ongoing relevance of his warnings about moral judgment, the rule of law, and resistance to cronyism.
Adam Smith argued that free markets only work when they rely on a foundation of moral sentiment, trust, and ethical behavior—often rooted in justice—to function effectively. While he acknowledged religious frameworks, his focus was on self-interest, justice, and the “invisible hand” within a well-regulated society. [1, 2, 3] Key insights regarding Smith’s views on morality and markets include:
• Moral Foundations: Smith argued that for markets to function, participants must have integrity, as low trust increases transaction costs. • Role of Ethics: His work emphasizes that true capitalism requires justice, not just self-interest, and thrives when there is a level playing field and fair rules. • Justice over Religion: Smith believed that a system of “natural liberty” required a framework of justice to prevent the “master” class from oppressing workers. • Invisible Hand: Smith believed the “invisible hand” works best when individuals, pursuing their own interests, are guided by a societal, and often divine, order. [1, 2, 3, 4, 5]
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.”
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.”
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.
A deteriorating bilateral relationship and growing regulatory scrutiny have changed the trajectory of capital flows between the United States and China over the past three years. The COVID-19 pandemic threatens to further disrupt two-way investment, as weak Chinese consumption and supply chain risks make U.S. companies re-think their China footprint, and Chinese investors face continued headwinds from domestic restrictions on outbound capital flows and U.S. regulators wary of opportunistic foreign buyers. The National Committee held a virtual event with report authors Thilo Hanemann and Daniel Rosen, both of Rhodium Group; Ker Gibbs, president, AmCham Shanghai; Rebecca Fannin, founder/editor, Silicon Dragon Ventures; and National Committee President Stephen Orlins to launch our new Two-Way Street: 2020 Update report and discuss the latest two-way investment data and analysis on May 11, 2020.
RichardbBrunner 