China: financial victory without military intervention
March 22, 2022China’s currency just overtook the once almighty yen. SWIFT, the international payment system, must now use the yuan that has become the 4th biggest currency after the dollar, the euro and the Swiss franc. Long considered to be speculative, the “renminbi” seems to be undergoing a full transformation, with such volumes of transactions making it…
China: financial victory without military intervention
March 14, 2022China’s currency just overtook the once almighty yen. SWIFT, the international payment system, must now use the yuan that has become the 4th biggest currency after the dollar, the euro and the Swiss franc. Long considered to be speculative, the “renminbi” seems to be undergoing a full transformation, with such volumes of transactions making…
Where is China though?
March 6, 2022China has been deeply shocked by the butchery that the Russian economy has suffered. The leaders of China – at every level – are terrified to fall victim to such strangulation. The West has steadfastly realised that its almighty power of globalisation is – by all accounts – a weapon that it alone wields.…
Russia: a disaster, live
February 28, 2022It’s been a quite a while since Putin’s Russia stopped investing in top-of-the-range global securities, namely US Treasury Bonds. Clearly worried about freeing itself from the West’s tutelage, Russia now has only 3.7 billion dollars of US debt compared to the 177 it had in 2010. Also, Russia’s central bank possesses wealth in the…
Inflation is always and everywhere…
February 22, 2022The ghost of Milton Friedman and his oh-so-famous repartee of the 1960s when he said that inflation is “always and everywhere a monetary phenomenon” still haunts us today. It is true that this assertion may seem plausible. After all, the immediate consequence of inflation is a rise in prices, which are denominated in money,…
Russia: a poor power
February 8, 2022In terms of sanctions against it, Russia is particularly vulnerable when it comes to technology. Its dependency goes back a long time, to the Soviet era in fact because – despite the USSR exporting more machines and machine tools than it imported numerically-speaking – the value of these imports exceeded 7 and sometimes even…
For China, good news are bad news
January 30, 2022China’s trade surpluses are beating all their historic records. Despite the stagnation of its national consumption, China is racking up trade surpluses in the way of 94 billion dollars per month. This good news is however not so good because the strong correlation between a nation’s trade balance and its overall consumption. These enormous…
Break up the monopolies to save society
January 20, 2022Just a quarter of a century ago, the maritime industry was heavily regulated. Until a certain powerful cartel led by the three biggest ship owners in the world shook things up by convincing the American authorities to change the rules of the game. However, the 20th century had judged the maritime transport to be…
Corruption is a threat to national security
January 10, 2022While the events in Kazakhstan have taken a dramatic turn due to the dictatorial regime in place ordering troops to fire on and kill protestors, it would not go amiss to remind ourselves that it is indeed President Kazakh Nazarbayev who was the first of the post-Soviet era to weave a methodical web of…
China is folding under the weight of its own contradictions
January 3, 2022The gap between the US and China remains wide, with China’s GDP still at only 70% of America’s. Evidently, China’s economic progress has been spectacular, and in this light the 14 trillion dollars that make up China’s aggregate product is nothing short of a miracle compared to the state it was in just 20…
$: the lord almighty, our master
November 28, 202115th August 1971: surely the most important date of the 20th century for economics and finance, the day that marked the decision of US President Nixon to unpeg the dollar from gold. Taken on a Sunday evening, before the opening of the markets, it introduced a new era: that of a currency underpinned solely…
Hyman Minsky, the clairvoyant black sheep
November 25, 2021Deceased in 1996, Hyman Minsky was an economist who was barely known at all during his lifetime. Only certain enlightened minds – unorthodox ones, of course – were interested in his research which focused on the causes of financial crises. He owed his hour of glory to the subprime implosion in 2007 and it’s as…
Economics: an inexact science
November 13, 2021The raising of America’s debt ceiling has again been in the headlines these last few weeks. It was in 1917 that this practice began in the US, not to put the brakes on public spending as many believe, but to give flexibility to the executive branch during its participation in the First World War.…
China trapped by capitalism
October 28, 2021China has thus far functioned by building 15 million homes a year, which is 5 times more than the US and Europe combined. After the collapse of the 300 billion dollar Evergrande, the biggest real estate company in China, the issue – albeit not a recent one – of the country’s ghost towns has…
Colonizing by Lending
October 14, 2021Colonisation is no longer what it once was. Actually, it just doesn’t use the same means anymore. Nowadays, to colonise, you lend, and that’s how you enslave. Over history, the debtor’s inability to pay has been used as an excuse to engage armies, like the British invasion of Egypt in 1882 because the country…
The Chinese Imperium against Honor of Kings
October 1, 2021There are 100 million young Chinese people playing Honor of Kings every day, the most popular and profitable online video game in the world that rakes in 7 billion dollars a year for its developers. Basically under the thumb of the virtual world, Chinese civil society is beginning to cause great headaches for its leaders…
China infected by financial capitalism
September 20, 2021The weight of the real estate industry has now become significant in the Chinese economy. Whereas it made up 5% of GDP in 1995, it is now one of the country’s main growth drivers, coming to more than 30% of economic activity. It is more or less at the same level as the real…
China at war with spiritual opium!
September 14, 2021China has declared war. Against its own technology companies. Since last February, the capitalisations of jewels such as Tencent, Alibaba, Kuaishou Technology and Meituan have lost billions of dollars. The stock index Hang Seng Tech that figures the biggest technology companies in the country has collapsed by 45%. The big business leaders have been…
The sacking of Haiti by France
September 1, 2021The Haitian Revolution was, without doubt, one of the most interesting and epic events of modern history. Taking place from 1791 to 1804, this moment was indeed fundamental for the country itself, but also had global repercussions that are still being reviewed today. First of all, the Haitian Revolution led to the creation of…
The Taliban’s money
August 23, 2021For 20 years, the Taliban’s immense fortune has ravaged Afghanistan and spread death and destruction there. They are complex, the Taliban’s finances, not at all monolithic but structurally edified on a vast criminal and mafioso network operated around the Haqqani network. Their revenue is made up of taxes levied on their subjects, the trafficking…
Japan, mirror of the world
June 29, 2021Japan is the world’s laboratory. It’s in this country that in 2001, for the very first time, the famous quantitative easing measures were put in place that tried to break the believed-to-be impenetrable barrier of zero interest rates that had been set in 1999. It was a revolutionary endeavour for the time, led by…
Why nations prosper
June 19, 2021Demographics are an indicator of the long-term destiny of a nation, and at the same time demonstrate the current mood of its citizens. Having abolished the only-child regime in 2016 to encourage families to have a second, China now even implicitly tolerates a third child across certain regions in need of population growth.…
These Germans insulting Keynes and the citizens of Europe
June 8, 2021On June 2nd Wolfgang Schäuble, President of the German Bundestag and former Minister of Finance of the country decided to pen a piece for the Financial Times where he invokes multiple times the spirit of the great Keynes, quoting him on no less than six occasions!
Putin’s choice?
June 2, 2021It is reluctantly that the West is setting out measures to punish Lukashenko’s Belarus for his recent misdeeds. The current regime in Minsk, being in survival mode, obviously hadn’t foreseen such an international backlash, since it has been wholly preoccupied, obsessed even, with trying to neutralise its adversaries. It is also true that Lukashenko…
Politics and finance: an incestuous relationship
May 27, 2021There was once a time when what was good for General Motors was as a matter of course good for the USA. Nowadays, what’s good for Wall Street is good for the USA, a country that now lives under the influence of a financial oligarchy. The powerful myth of the US as a “nation…
Inspirational America
May 10, 2021The success is total. The solidarity exemplary. The determination unfailing. And that’s not even counting the phenomenal success of the USA’s vaccination campaign: I myself got vaccinated in March well before my age bracket was called and just two days after I signed up for it. The US government has achieved another great feat…
China vs. USA: the lethal weapon
May 3, 2021The Chinese are convinced that the United States are a declining power, and they are basing – as a consequence – all their actions on this prediction. This is why China now feels that it is strong enough to take on a hitherto impregnable and unchallenged stronghold, that being America’s currency and the exorbitant…
Robert Mundell, father of Europe?
April 14, 2021Well before the creation of the euro, the Canadian Robert Mundell who died a few days ago, laid out the conditions for success of a monetary union. His works won him the Nobel Prize for economics in 1999, the year that the euro launched. According to Mundell, a currency shared by a geographical region…
Germany’s grave historical manipulations
April 8, 2021Proof that the economy is also – and maybe first and foremost – political, German economists are now trying to rewrite history. There are some big names attempting to fiddle with the historical facts, adjusting them to fit their theories, or rather their fears. These ordoliberals, bordering on the fanatical, are warning against hyperinflation…
Should we be scared of the government?
March 29, 2021Government always caused fear and those who we now call “libertarians” always viewed public powers gaining momentum with unease since the expansion of a government’s remit has been interpreted by many citizens across the Western world as a rolling back of their own freedoms. For those who subscribe to this somewhat – to call it…
Bitcoin and the conspiracy theorists
March 17, 2021Those frothing at the mouth over this “monetary revolution” take refuge in mistrusting their government, or in lacking confidence in their currency that they think won’t be worth much the next day due to the actions of the central banks. Or it’s for both reasons, that alas have got a bit confounded in the…
How do we escape Europe’s purgatory?
March 7, 2021There are good reasons to fear the future of Europe – and to fear for the future of Europe – when a moderate and deeply pro-European figure like Clément Beaune launches what is basically a petition in Les Echos, as he did on March 3rd. But let’s be real, because the old timers who…
Tribute to a moderate Saudi
February 28, 2021“The Stone Age did not end because the world ran out of stones, and the oil age will not end because we run out of oil”. This is an example of Sheikh Yamani’s clairvoyancy, who died a few days ago and who was the oil minister of Saudi Arabia from 1962 to 1986. Throughout…
The banks won’t be opening on Monday
February 18, 2021Let us make no mistake: the massive economic imbalances and inequalities are not an anomaly but well and try integral to the system itself. Capital has of course always garnered more power than work, but this phenomenon is now reaching quite terrifying levels. It only needed a virus to destabilise – irreparably I think –…
Lebanon: before the chaos begins
February 3, 2021Many countries have decided to no longer use their own currency but to adopt the American dollar as the standard means of exchange. For certain poorly managed economies, and for all countries ravaged by corruption, dollarization is often that last resort to avoid bankruptcy. Economic actors and consumers are always the first to anticipate…
Biden: a lackey for Big Tech?
January 29, 2021Since Clinton’s second term, the US has done nothing serious to combat the hyperconcentration of companies’ and monopolies’ power. Let’s think back to the anti-trust battle brought by the US Department of Justice against Microsoft at the end of the 1990s. In fact, thereafter the George W. Bush, Obama, and Trump administrations all operated…
The corruption of our societies
January 6, 2021Nearly all our economies’ problems arise from the concentration of power. Our system of freedoms has gradually been trampled over by monopolies of all kinds and to different extents, that have increased the costs of health, medicine, food, agricultural products, and a whole range of commodities and materials. It’s the tens of millions of…
Tribute to America
December 24, 2020Dear readers, I have the pleasure of announcing to you my second article in a series of analyses that I wish to dedicate to the United States of America. Here is the first, What the hell’s the presidency for?, published 14 December 2020. All of American history – from 1776 to…
USA: What the hell’s the presidency for?
December 14, 2020Though it has of course been dismissed, the legal action led by seventeen US states joining ranks with Texas to try to invalidate the election of Joseph Biden at the Supreme Court is no less dangerous and toxic to the country’s democracy thanks to the uproar it has created. There are also about 130…
Inequalities are an inevitability but the truth is a right
December 5, 2020More jobs will be lost. More businesses will go bust. More people will slip into precariousness. More children will go hungry. Let’s not kid ourselves about the exorbitant economic cost of the crisis to come. Also, the people must know what to prepare themselves for and they deserve clear explanations from their governments. They…
My economic testament
November 10, 2020In my book, Le testament d’un économiste désabusé [Testament of a disillusioned economist], that is in fact a glossary of economies in crisis, you will not find under the letter C the term ‘Coronavirus’, nor the economic and social consequences of this health crisis or of its management by our authorities. While this ‘testament’…
2020: end of the “modern” world
November 3, 2020The collapse of the Weimar Republic was a turning point in European, even world, history. It must serve as a lesson, even almost a century on. We should indeed not forget that Chancellor Brüning – with the Great Depression in full swing – reduced public spending by more than 15 GDP percentage points, lowered…
You are all Charles Ponzi!
October 27, 2020“Give Ponzi a million”, the Wall Street Journal declared in an article on 2nd August 1920, “and in a twelve month he will expand it for you to some $25,000,000; in two years to $657,000,000; in three years to $16,885,000,000. Surely the Allies could spare him a million, and within three years clean up…
Taking on debt, yes, but what for?
October 11, 2020Following on from Keynes, it’s been years that I’ve been talking about it and outlining the mechanisms. At present, reality is catching up with the “mainstream” economists who with regret have recognised the absolute necessity for governments to deepen their debts in the current recession brought about by the health crisis. However, while the leaders…
Smile, you’re being watched
September 29, 2020My readers know that I am an advocate of the phasing out of cash, for macroeconomic reasons outlined across several articles and books. To summarise, negative rates – that we will inevitably see – will only be effective if cash is eradicated, because a world without cash would also be a world without recession. I…
The most important job in the world?
September 17, 2020The most coveted job in the world is that of the central banker, who also arouses the hastiest of judgments, all over them like a rash, and sometimes even hate-filled. Vilified for exacerbating inequalities and dragged through the mud for maintaining zero interest rates, it’s only fair that we don’t try to claim bankers…
Economists on the verge of nervous breakdown
September 9, 2020Central banks are lost, and central bankers are now blatantly admitting that their tools and other monetary policy instruments used for decades to correct economic cycles no longer work! Yes: they have lost their magic touch, these central banks which are no longer omnipotent, including the most powerful of them, namely the US Federal…
Japan: a sleeping beauty
September 1, 2020On the macroeconomic scale, Japan is a laboratory, but it’s also a cemetery where economists and theorists have had to bury their certainties. I salute the determination of Prime Minister Abe on his departure, having not shied away from any decision or measure in pulling his country out of the lethargy that it has…
There is life outside of work
August 28, 2020The time when Voltaire stated in Candide that “Work saves us from three great evils: boredom, vice and need” is over. Today, it is no longer appropriate to work regardless of the cost. In other words, less work could improve our living conditions and could undoubtedly improve the way we do work. The belief…
The real power, the one that counts: that of the new monarchs
August 24, 2020The share values of Apple, Amazon, Alphabet, Microsoft and Facebook – that are also the 5 largest capitalisations in the US – have climbed by 40% this year, while all other so-called “traditional” shares listed on the S&P 500 index are unchanged over this same period. For more than 70 years such a concentration…
