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The Yuan versus the Dollar: Showdown in the Global Financial Arena

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At the 1944 Bretton Woods Conference, the United States laid the foundation for the U.S.-centric international monetary system, thus ensuring the dollar’s status as the key reserve currency for the next 75 years. The fact that other countries accepted the dollar as the main currency of international payments, loans and investments allowed U.S. transnational corporations to dominate global markets in the post-war period quickly. However, if we are to proceed from the development patterns of the international monetary and financial system, then it follows that the dollar will eventually be replaced by the yuan, the currency of the new global economic and financial leader (China). Will Beijing manage to build its own system of global institutions, one that is capable of internationalizing the yuan and competing against the U.S. currency when it comes to servicing global flows of commodities and finance? In order to answer this question, we need to look at the trends of the global financial architecture as it stands today and identify the strengths and weaknesses of the U.S. and Chinese financial systems.

The Global Financial Architecture

The global financial architecture (GFA) is the combination of institutions involved in the regulation of global finance. It consists of a model for organizing international financial relations, institutional mechanisms for managing these relations, and the principles underlying the participation of countries in decision-making processes. The GFA model is based on the competitiveness and openness of global financial markets. The institutional mechanisms include fiat (intrinsically valueless) money, the free trans-border movement of capital and a system of floating exchange rates. The influence of individual countries on the development of the GFA depends on the size of their quotas and votes within the Bretton Woods institutions of the IMF and the World Bank.

One feature of the current transformational processes as applied to the GFA is the concentration, in individual countries, of financial assets that exceed the size of their economies by tens, hundreds and even thousands of times. For example, the financial assets controlled by Luxembourg exceed its GDP by 248 times, and those of the Cayman Islands exceed its GDP by 1861 times. These imbalances are caused by the fact that the modern GFA is formed not along the lines of the formal Bretton Woods institutions, but rather informally, via the offshore financial system.

It is in offshore jurisdictions, i.e. outside the national borders of the countries that issue international currencies, that the bulk of global monetary liquidity is generated. For example, in 2007–2008, the Federal Reserve Bank of New York opened temporary dollar swap lines for the central banks of 14 countries worth over $10 trillion to refinance the dollar liabilities of lending institutions operating out of those jurisdictions. The swap lines were discontinued in February 2010, but were reinstated three months later in a different format between the Federal Reserve System (FRS) and five key central banks that are closely linked to the United States: the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Japan and the Bank of Canada. These C6 swap lines were made permanent and unlimited in October 2013. It is thanks to these currency swap operations that the U.S. FRS can create euros, pounds and yen in offshore jurisdictions. The other countries involved can participate in the creation of offshore U.S. dollars. The massive swap agreements involving the most significant central banks undermine the importance of the Bretton Woods institutions as the providers of global liquidity and make it difficult to record and control global capital flows at the intergovernmental level.

The U.S. Financial System

The main strength of the U.S. economy is that it issues the key global currency, as well as the fact that it has created the world’s biggest stock market, in which more than half of all U.S. households participate. The United States has the most liquid bond market, which means that the dollar is the international benchmark for value and the main reserve asset for the rest of the world (its share in the international reserve portfolios of central banks exceeds 60 per cent). Over 50 per cent of all international deposits, loans and promissory notes are nominated in U.S. dollars. Washington is home to the headquarters of the Bretton Woods institutions, which are responsible for macroeconomic oversight and addressing structural imbalances in the 189 member nations. Three U.S. rating agencies account for 96 per cent of all credit ratings assigned in the world, U.S. investment holdings manage more than 50 per cent of global corporate assets. These and other factors explain the dominant role of the United States in the formation and development of the GFA.

The main weakness of the U.S. financial system is that the country’s economy is based on debt and is extremely dependent on bank lending terms and the dynamics of stock market operations. A sharp increase in interest rates or a decline in demand as a result of economic overheating leads to a nosedive in share prices, which, in turn, leads to a depression, as was the case in 1929 and 2008. One other vulnerability of the U.S. financial system is its dependence on external financing, which is due to the status of the dollar as the key reserve currency. Should the international demand for dollars decline, U.S. funding from external sources may also decrease.

China’s Place in the GFA

China leads the world in terms of monetary aggregates (in the dollar equivalent), purchasing power parity GDP, production and exports, and the labour force size. However, China’s economic growth continues to be largely dependent on imports of foreign investments and technologies.

China’s leading positions on a number of economic indicators still has a negligible effect on the country’s ability to influence international financial relations. As before, the head of the IMF is a European citizen and the head of the World Bank is an American. Unlike other international organizations within the UN system, which make decisions based on the “one vote per country” principle, the IMF and the World Bank are stock companies whose capital is owned by the member nations. Decisions on the most critical issues on the agenda of the Bretton Woods institutions are made by a qualified majority of 85 per cent. Following the reform of the IMF quota and voting system in 2010–2016, the BRICS countries failed to gain the minimum number of votes (15 per cent) to obtain veto power and assert the multipolar principle within the organization. Just like before the reform, the United States continues to be the only IMF member nation that has the power veto.

China certainly owes much of its global economic achievements to its membership of international financial and economic organizations that the United States was instrumental in founding and running. That said, in order for China to protect its economic interests in an effective manner and exert tangible influence on decision-making processes in the global economy, Beijing needs to participate in those international institutions in which its vote has a decisive role. In this sense, China has high hopes for its recent initiatives to create pan-Asian institutions for monetary policy, finance and economics, such as the BRICS Contingent Reserve Arrangement, the Chiang Mai Initiative Multilateralisation, the BRICS New Development Bank and the Asian Infrastructure Investment Bank.

The opening of the Shanghai International Energy Exchange (where transactions are carried out in Chinese yuan) on March 26, 2018, was a particularly significant event. This was China’s first step towards the formation of a “petroyuan” pricing system on the global energy resources market. The Shanghai Futures Exchange has begun trading in new oil futures, known as INE, which are expected to compete against British Brent and U.S. WTI contracts. The pricing of oil in yuan is an important component of the drive to internationalize the Chinese currency and lessen the global economy’s dependence on the dollar.

By late 2017, the People’s Bank of China had signed 37 swap agreements with different countries worth more than 3 trillion yuan. The agreements were aimed at facilitating the use of the yuan in doing business with foreign banks and companies, so that the central banks receiving liquidity in yuan can act as lenders of last resort after the activation of currency swap lines. However, the agreements have not resulted in a significant increase in the global use of the yuan, which is what was originally expected. Since the 2008 initiation of the swap agreements, the share of the Chinese currency in the denomination of international promissory notes has stood at roughly 0.3 per cent, whereas the share of the U.S. dollar has grown from 47 per cent to 63 per cent.

In addition, currency transactions involving the yuan are mostly done via London, not Beijing. The United Kingdom accounts for 33.79 per cent of all global currency operations involving the yuan. Hong Kong remains the largest clearing centre for international transactions in yuan, serving 76.36 per cent of all such global operations (the United Kingdom is second with 6.18 per cent). Thus, most international transactions involving the yuan are performed outside continental China.

One more obstacle to the faster internationalization of the yuan is China’s preoccupation with domestic problems stemming from the rapid growth of debts (especially in the property market), the growth of the shadow banking system and the disproportionate allocation of loans to large and small businesses. In its attempts to conduct a softer monetary policy, the Chinese government is facing a difficult choice between supporting short-term growth and countering unfavourable external shocks. A monetary easing could increase the vulnerability of the Chinese economy, because continued lending growth is capable of slowing down or complicating the restoration of banks’ balance sheets and aggravating the existing imbalances in the allocation of loans.

University of California professor Barry Eichengreen, who is one of the most respected experts on the development of the international monetary system, says the yuan does not qualify as an international currency for three reasons: 1) the high costs of financial transactions involving the acquisition and distribution of information; 2) China’s great dependence on Hong Kong as a regional offshore centre; 3) China’s inability to exert political pressure on the other global economic centres, primarily the United States and the European Union. At the same time, according to Eichengreen, there are four factors indicating the growing status of the yuan as a regional currency: 1) the potential growth of incomes in Asian countries, which results in increased demand for Chinese commodities; 2) the implementation of multilateral projects as part of the Belt and Road initiative, which results in the growing use of the yuan in Central and Southeast Asia; 3) the development of the Asian bond market, which leads to the standardization of international promissory notes nominated in yuan; 4) the growing demand for yuan on the part of commercial banks and companies in swap transactions between central banks as part of the Chiang Mai Initiative.

Points of Conflict between the United States and China

Unlike the Cold War era, which was characterized by the polar confrontation between two systems, today the United States and China are members of the same international financial organizations, they both interact in the uniform global capitalist market and follow the same principles of competition, effectiveness and profit maximization. For this reason, the main point of conflict between the United States and China concerns mutual restrictions when it comes to allowing the other country’s finished products and services onto their national markets.

Nobel Memorial Prize in Economic Sciences recipient Joseph Stiglitz believes that the United States stands to lose more from its trade war with China than China does, as the Chinese authorities have far greater opportunities to restrict the operations of U.S. corporations working in China than the U.S. authorities do when it comes to Chinese goods imported into the United States as part of international trade. In addition, raising the prices of Chinese commodities on the U.S. market may cause dissatisfaction among end customers.

Another point of conflict between the two countries is connected to China’s limited ability to influence major international organizations. Despite the IMF reform, China did not secure a tangible increase in its influence within the organization, with its quota only growing from 4.0 per cent to 6.41% per cent. We should note here that when the IMF began operating in 1947, China’s quota was bigger than it is now, at 6.56 per cent (even though the country was the world’s fifth-largest economy at the time, not the second largest as it is today). The formal inclusion of the yuan in the special drawing rights (SDR) basket (the IMF’s cashless reserve asset) in 2016 was largely symbolic, because the use of SDRs has no effect on the actual balance of forces in the GFA. The value of the SDRs in circulation stands at $204.1 billion, or under 4 per cent of the international currency reserves calculated in dollars. The share of the yuan in the structure of international currency reserves and international transactions stands at approximately 2 per cent, which does not reflect China’s global role as the largest manufacturer and exporter.

One more potential point of conflict is the development of artificial intelligence (AI) technologies. In accordance with the Made in China 2025 plan to develop strategic technologies, the country expects to have assumed global dominance in the world in the field of AI by 2030. The financial sector has high hopes for AI in terms of its potential to increase effectiveness and profitability, much like the effect that the introduction of information technologies had on financial services. China has already outstripped Europe in the number of AI-related startups and is gaining ground on the global leader in AI, the United States.

Conclusions

Experts view pan-Asian financial institutions as an instrument used by China to establish its status as the leading Eurasian and global power. Chinese officials repeatedly stress that the newly established institutions aim to compete with the Bretton Woods institutions, not replace them. In other words, at the current stage in the development of the GFA, China has no intention of changing the neo-liberal principles of its functioning.

Despite the significant increase in China’s influence on the global economy and the addition of the yuan to the SDR basket, the dollar continues to play the key role in the global financial market and in servicing international trade in commodities and services. China’s growing influence on the GFA thus depends on strengthening the global role of Sino-centric financial institutions and on the broader use of the yuan in international payment systems and in transactions on the global financial market. At the same time, the active creation of offshore dollars that are not controlled by the U.S. regulators increases the risk of the dollar-centric currency system collapsing.

It is obvious that the current GFA configuration is not likely to undergo any significant changes in the foreseeable future (unless another global financial crisis breaks out) because the United States has a significant number of institutional instruments and mechanisms for influencing the global economy at its disposal. In the long run, however, any growth in China’s actual role in the international financial system will depend on the successful promotion of a conceptual alternative to the current GFA model for the purpose of overcoming global imbalances between the financial sector and real economy.

From our partner RIAC

Doctor of Economics, Senior Research Fellow and Professor in the Department of World Economy and World Finance of the Financial University under the Government of the Russian Federation, RIAC expert

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The Economy Against the Tide

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The world evidently grappled with the effects of the Covid pandemic in 2020 and continues to wedge forward against the odds to survive and stay afloat. The major economies contracted as the global boards pinned records after records in economic depreciation, monetary devaluation and corporate deterioration. However, whilst the pandemic pushed the metaphorical brake over the developed and developing economies alike, and simultaneously nudged the least developed into desperation, China posted surprisingly positive growth figures as it bid adios to the yesteryear. While anything remotely lucrative seems like a farce nowadays and although the relatively booming Chinese economy seems superficial at the first glance, a detailed analysis dissects the tenets of the trade that have set the People’s Republic apart from the struggling world.

China stands as the figurative ‘Ground Zero’ of the Coronavirus pandemic; reporting the earliest emergence of the virus in the ultimate month of 2019.  China later went on to have a gloomy start to the new year; struggling to deal with the strange occurrences, rising death toll and having no answer to the surging uncertainty. The new year celebrations were cancelled, holidays extended and even corporate giants like Toyota and Apple were resorted to immediate closure across the Mainland. The year expected to be of expansion turned polar as the world started to isolate the country to contain the virus; turning exports to the lowest levels over decades of preceding economic flourish.

However, while many global experts predicted the downfall of China; extrapolated by the dismal figures of the first few months of 2020, China quickly recovered and surpassed expectations in both containing the virus within the country and stabilising the tattering economy. The main contender and outright rival of China, however, faced the music in the most ironic way possible. Whilst the United States pillared on the trade war between the two since before the Covid pandemic, Mr. Trump left no stones unturned in maligning China for spreading the virus around the globe; deliberately and in an attempt to exponentiate its accession to power over US. The US economy faced the brunt of the pandemic rather expectantly since the time was wasted on hurling accusations instead of proactively adopting protective measures beforehand. While US is currently the worst affected country around the globe, its economy is no different than the mounding death toll on charts each day.

The US economy contracted on record levels and even itsworld-renowned indexes like DJI and S&P500 posted negative rallies; first since the Great Depression of 1929. Although the economic damage to the US has been cushioned, now twice, by heavily strategized monitory polices of the FED and colossal fiscal stimulus, the world superpower is showing signs of weakness as it deals with over 250,000 fresh cases each day yet can’t function to facilitate the 14 million and counting Americans facing unemployment for months and seeking benefits, taking the national bill to unprecedented heights.

Even compared to the regional counterparts, China stands out in much more than just the economic stability. Europe currently deals with a detrimental surge of the virus-variants while simultaneously accommodating the challenging deals across the borders in the wake of Brexit. The United Kingdom faces contradictions over new trade policies and procedures; not just with EU but with its very own states like Northern Ireland. The monetary rates now touch zero with a possibility of further plunge into the negative territory as London shivers with fatal blows of the highly infectious variant of Covid and the nation facing the second country-wide lockdown as hospitals run at full capacity.

Meanwhile, EU falters with the economic fiasco even under the improving financial conditions and finally grabbing an agreement on the year-in-year-out negotiations of the Silk Road Initiative. The distinction, however, is clear as while Germany, Europe’s most powerful economy, wrestles with a catastrophic recession, China completely avoided recession throughout the year 2020. While Germany looms into negative growth rates, China posted a steep 6.5% growth in the last quarter (Oct-Dec); a cumulative growth of 2.3% in 2020. A stark opposite of the slump caused by Covid restrictions that initially pulled China’s economy down by 6.8% in the first quarter compared to 2019.

While China has been gauged as “The only major economy to quickly recover from the pandemic and find the normal course of business operation”, the recovery has been uneven over multiple sectors of the domestic industry. The boom in the economy has been celebrated and attributed to the growing optimism of Chinese investors in the relentless recovery of the economy. The Shanghai stock market was recently pulled up by 1% even under the rippling conditions of the global economy. However, while the consumer electronics sector has enjoyed the waves pushed by the ‘stay at home’ mottos under the lockdown, service businesses like hotels and restaurants have faced a crunch which has eventually carried forward to the blue-collar workers in China. While the factories in the Mainland have turned into an overdrive to fill in the boom of exports since many countries face a manufacturing break, the exporters to the poor countries are dealing with the devastation alike to their clients. While magnates like Jack Ma have made a fortune, the recent graduates are struggling to find new jobs.

Now, with the resurgence of the virus, the fear in lacing the country again. The recent tally has jumped up to 769 new cases whilst reporting first death in over six months. However, the health officials have deemed the sporadic spread as ‘very, very small’. Ultimately, China came about to be a tough nut to crack, analytically due to its effective centralised strategies in dealing with the pandemic followed by aggressive policy making; focusing on the advanced manufacturing industries to stay proximate to core competencies whilst simultaneously maintaining a free market structure in other areas of the economy, setting a path for a predicted average 5.7% growth until 2025. Thus, paving China’s way to attain the coveted title of ‘World Superpower’ and surpassing US by 2028.

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Indian Farmers Protest Against the Parliament’s Encroaching Bills

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The new agricultural reforms in India aim to permit farmers to offer their produce to private purchasers beyond a state-run discount or wholesale markets, where farmers are guaranteed a minimum cost for their yields.

However, the farmers state that the laws would undermine their livelihoods and will solely be profitable to large companies, leaving producers helpless under the heel of a free market. Such patters can be gauged from the Modi government’s corporation-oriented policies. For instance, the current corporate tax rate – 30 percent – has been considerably reduced: 22 percent for existing companies and 15 percent for those established after 1st October, 2019. 

Farmers regard these bills with suspicion, for they feel threatened by the corporatization of their agricultural domain and the dismissal of the MSP regime. Introduced in 1966-67, the MSP regime promises the sale of specific crops at a fixed price thus assuring the farmers of a regular income in spite of escalating input costs and unstable prices.

Primary leaders of farmers’ associations have called for protests, even willing to observe fasts during the protest in order to challenge the new farmer laws. With almost 250 million protesters, to protest is being called the largest protest in human history

This is the second time in the previous two weeks that the farmers have called for country-wide protests, requesting all the people to organize sit-ins outside the district organizations across the state. The protests are being led by a large number of farmers sitting outside the capital, New Delhi, obstructing main highways heading towards the city.

Chief Minister of Delhi, Arvind Kejriwal, and his party ‘Aam Aadmi Party’ have supported the sit-ins by fasting with them. Kejriwal encouraged his party workers and members to join the campaign and asked Modi’s Bharatiya Janta Party to set aside arrogance and fulfill the demands of the farmers.

The agriculture sector contributes almost fifteen percent to India’s $2.9 trillion economy and enrolls the greater part of the nation’s 1.4 billion individuals. In recent years, this sector has been facing setbacks and driving a huge number of indebted farmers to take their lives.

Modi said the enactment was required to support the agricultural sector, and that the new laws would profit the farmers and “free” them from the oppression of middlemen. Farmers, generally from Haryana and Punjab and considered the “grain bowl” of India, have denounced the laws as “hostile to farmers”.

The farmers have demanded revocation of the new laws and assurance of the Minimum Support Price for their yields.“It’s been months now since the farmers began protesting. We have sent a few written messages to the Prime Minister, Agricultural Minister is demonstrating our hatred to the hostile laws but the BJP government is careless on this issue,” said the farmers’ leader.

One elderly woman, aged 75, said that “unless and until Narendra Modi withdraws these laws, we will not go back. This government should know about the strength and determination of the Punjabi people.”

The Indian Supreme Court has received many petitions regarding a ban on the protest, but the top court has declined such calls and ordered the government and unions to form a committee in which the experts would mediate between the concerned parties.

On the birth anniversary of Sikh leader, Guru Nanak, Canadian Prime Minister Justin Trudeau said in a Zoom meeting that Canada would always defend the right of peaceful protest.

Federal Minister Fawad Chaudhry termed Indian behavior with farmers as “shameful”. He stated that the Indian government’s policies were the biggest threat to regional peace. United Nations Secretary-General António Guterres called on the Indian government to allow protests, asserting the right to raise a voice and show opposition to the government.

The vociferous calls have certainly proven to be a feather in the farmers’ cap, as India’s Supreme Court has recently ordered for the suspension of these farming bills.

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U.S. Trade Deficits Increase from Covid

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America’s trade deficit (excess of imports minus exports) reached its minimum in February 2020, and since then has increased 84% from February’s -3708, up to November’s -6812. America has one of the world’s highest rates of coronavirus-19, or Covid-19, infection, and therefore is less productive and more needy than most countries are, during the coronavirus crisis, and is consequently importing more and producing less. The reverse has generally been the case for the countries that have had good policy-responses to the virus — those countries’ economies have either been virtually unharmed by, or else have actually boomed from, this pandemic.

China’s mere month-long trade deficit from coronavirus was an enormous -62.05 in February, but by March China popped back up to+19.93 and has remained above +36 since that time, and it reached its high of +75.43 in November. China has one of the world’s lowest rates of coronavirus-19 infection, and is therefore exporting more as it fulfills the needs of countries (such as America) that are producing less because of the coronavirus crisis. 

A major study by Jungle Scout, “Global Imports Report 2020”, says that:

Those countries that were able to recover from the impact of early 2020 economic events are the countries faring better later in 2020. For example, China had the most drastic year-over-year reduction in U.S. imports among the top 20 countries in February and March, second only to Hong Kong. But in April, China bounced back significantly, achieving approximately 40% year-over-year growth in U.S. imports. The countries that were able to recover early are the countries faring better later in 2020.

On December 17th, Matthew C. Klein at Barrons headlined “China’s Pandemic Recovery Accelerates While the U.S. Economy Rolls Over” and he reported that, “Soaring consumer spending, rapid manufacturing growth, and robust exports are pushing up the speed of China’s recovery from the pandemic even as the third wave of the viral outbreak and the withdrawal of federal government income support are causing the U.S. economy to turn over.”

One of the very few countries that were hit about as little as China by this pandemic is Vietnam, whose northern border is China. Vietnam has perhaps the world’s most vigorous and well-planned policies to restrain this virus. The country’s only two months of trade deficit were during April, at -12.20, and popped back up to +12.33 in May, then peaked at +49.86 in August, and declined sharply down to +6.00 in November, and then down to -10.00 in December. Although Vietnam’s worst month of the infection was August, after which the numbers of new daily cases returned quickly to the extraordinarily low numbers of the preceding months, Vietnam was hit hard by retaliation (such as complaints and investigations) from the U.S. regime in October, which caused an especially hard drop from 29.39 in October down to November’s +6.00, and then December’s -10.00. China wasn’t hit so hard by the U.S., mainly because Trump had already turned the screws against them earlier, and China had thus already reoriented its exports toward other countries. Yet, still, China has, steadily, each year, during the past five years, produced almost exactly 40% of all imports by the U.S. The impact of America’s policies against China has been much bigger in boosting America’s imports from China’s competitors than it has been in reducing America’s imports from China. America has been increasing its imports mainly from Vietnam, Germany, and Taiwan. So, those have been the chief beneficiaries of Trump’s anti-Chinese policies.

Another of the very few countries that have been hit by this coronavirus even less hard than China has been is Taiwan, which is almost unique in its enjoying a positive balance of trade throughout the year, and so Taiwan has produced record-breaking trade surpluses ever since May. This is largely because Taiwan is selling more to all of the desperate countries, such as the United States (which regime is especially happy to increase its purchases from Taiwan so as to decrease its purchases from China and from Vietnam). Taiwan is perhaps the world’s top gainer as a consequence of this pandemic.

Unlike China, Vietnam, and Taiwan, Germany has been somewhat poor in its coronavirus policies, and has 24,493 cases per million inhabitants, versus 16 in Vietnam, 36 in Taiwan, and 61 in China. America, by comparison, has 73,795. So, whereas America is over 3 times worse than Germany, it’s 4,612 times worse than Vietnam, 2,950 times worse than Taiwan, and 1,210 times worse than China. Germany is benefitting not because its coronavirus policies have been good but because the American regime wants to crush China and for some products this means buying from Germany instead.

The people who were saying that the aggressive types of measures that countries such as China, Vietnam, and Taiwan, were imposing against this virus would hurt instead of help those nations’ economies were not only wrong but they had their understanding exactly upside-down. They were exactly and precisely and extremely wrong. And if the United States (and perhaps some of its allies) had not been retaliating against the countries (other than Taiwan) that are the most successful against this virus, then the countries that have been doing an outstanding job of protecting their populations from this virus would be economically benefitting even more than they have been economically benefitting from their success against this virus. The result for the well-performing countries is not only lower rates of disease and lower rates of deaths, but higher rates of economic production and GDP. 

Coronavirus has thus been redirecting global leadership away from the United States. One might anticipate that America will respond by relying increasingly upon its military in order to impose its will — no longer as any sort of role-model to inspire its ‘allies’. For example, on Christmas Day, December 25th of 2020, at the very same time that the nation’s austerity hawks were blocking passage of a covid-19 relief bill in the U.S. Congress, and millions of Americans were terrified at the resulting prospects of soon becoming made homeless, CNN headlined “US Army prototype cannon blasts target from 43 miles away”, and presented video of a successful test of a tank’s cannon firing a small guided missile against a military vehicle that was located 43 miles away, which video CNN accompanied with martial music in celebration of the huge explosion and fireball-annihilation of that targeted vehicle. America would then be selling its threats more, and its benefits less, and CNN was already a liberal cheerleader for this change to a more ‘assertive’ style of propaganda. But if this is liberal propaganda, then what is conservative propaganda; or: How will CNN now distinguish itself from, say, Fox?

Trump’s replacement, Biden, has appointed, to his Administration’s international affairs posts, individuals who are just as intensely neoconservative (or “hawkish” or “war-loving”) as Trump did; and, therefore, the incentive for America’s trading-partners to become less economically dependent upon America is likely to decrease little, if at all, and America’s balance-of-trade numbers will probably improve little, if at all, during his Presidency. America seems set on being an aggressive declining power, economically, no matter how much it will be spending militarily in order to prop-up its power. America’s billionaires have been thriving while America has been spending around half of the entire world’s military expenditures, and, so, this type of U.S. Government is unlikely to change in the near future.

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