RSS feed Forex Humor 2009-2013 RSS feed Forex Humor Funny Forex drawings and caricatures <![CDATA[US dollar’s time as preeminent currency nearing end]]>

Ordinary Americans are beginning to realize that the dollar is no longer the same. As the grim reality unfolds, years-long faith in the omnipotence of the US dollar gives way to thoughts of its loss of status as the world's preeminent currency in global trade. They are starting to acknowledge that the greenback’s dominance is facing serious challenges.

For a long time, the US government managed to maintain beliefs about the dollar's supremacy. However, there is increasing evidence that this is not the case. Thus, US investor Jim Rogers shared his opinion with the RIA news agency. "The American dollar’s time is coming to an end," he said. Rogers attributes this to the country’s huge national debt level. The United States is currently the world's largest debtor nation. "Many people are starting to say: ‘Wait a minute, I don’t know if we want to use that money, because it will have a problem someday," the investor noted.

"The world’s international currency is supposed to be completely neutral. Anybody can use it for anything you want. But now Washington is changing the rules. And if they get angry at you, they cut you off," Rogers said.

At the same time, he added that the world had not yet found "something to replace or even compete with the dollar." According to the investor, the Chinese yuan could take up that role, but it is not completely converted.

The material has been provided by portal -]]> Mon, 05 Jun 2023 13:11:39 +0000
<![CDATA[Italy’s public debt makes it one of most highly-indebted countries]]>

The US has firmly settled at the top rank on the list of heavily indebted countries. The federal debt of the top global economy surpassed others by a wide margin. Less advanced and smaller economies have to deal with humongous public debts. Italy’s government debt hit another historic record of €2.79 trillion.

The Bank of Italy reported that the country’s sovereign debt soared in a mere month by €17.8 billion to a jaw-dropping €2.79 trillion. “New historic record! A worrying and alarming exponential rise given the rate hikes due to the ECB’s new restrictive monetary policy,” AgenPress cited Massimiliano Dona, president of the National Consumer Union. 

According to his estimates, if government debt were shared among the Italian population, each citizen would owe €47,405. In turn, it means that the public debt now amounts to €106,446 per household. There is also good news. In the economic forecast, the European Commission anticipates Italy’s sovereign debt to shrink relative to GDP this year. Italy’s government debt equaled 144.4% of GDP in 2022. The debt-to-GDP ratio is likely to decline to 140.4% in 2023. Experts at the European Commission believe that Italy’s public debt is likely to decrease at a slower pace.    

The material has been provided by portal -]]> Mon, 05 Jun 2023 13:02:27 +0000
<![CDATA[EU economy avoids recession]]>
The EU economy successfully avoided recession last winter, a report by the European Commission said. Despite earlier gloomy outlooks, which were prompted by concerns over the impact of the conflict in Ukraine, the diversification of energy supply, and plummeting Russian energy exports due to sanctions, the European Union has managed to weather the storm.The European Commission has revised its forecast for the EU economy upwards. According to the EC’s outlook, the region’s GDP growth is expected to accelerate to 1.7% by 2024. The European economy has been boosted by lower energy and natural gas prices, which seemed quite unbelievable until recently.“The European economy is in better shape than we projected last autumn. Thanks to determined efforts to strengthen our energy security, a remarkably resilient labor market, and easing supply constraints, we avoided a winter recession and are set for moderate growth this year and next,” Commissioner for Economy Paolo Gentiloni said. However, Gentiloni noted that risks to the EU economy remained too plentiful for comfort. “We must remain vigilant,” he added.Meanwhile, the EU has pledged to maintain the sanction regime imposed on Russia. The President of the European Commission Ursula von der Leyen said that the European Union would continue its economic containment of Russia and would ban the transport of European goods to other countries via Russia.The material has been provided by portal -]]> Mon, 05 Jun 2023 12:35:20 +0000
<![CDATA[EU adopts new crypto market regulations]]>
Lawmakers in the European Parliament approved new regulations on markets in crypto-assets (MiCA). Digital assets have become ingrained in modern life and therefore need to become more managed. "The EU brings crypto-assets, crypto-assets issuers, and crypto-asset service providers under a regulatory framework. This regulatory framework aims to protect investors, preserve financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector," the official statement reads. Setting an EU level legal framework, MiCA is the first regulatory document for the crypto sector. The adopted rules confirm that crypto assets have become an integral part of the global market. In addition, the EU has agreed on rules that should prevent money laundering through crypto assets. "Under the new rules, crypto asset service providers are obliged to collect and make accessible certain information about the sender and beneficiary of the transfers of crypto assets they operate, regardless of the amount of crypto assets being transacted," the European Commission said.The material has been provided by portal -]]> Mon, 05 Jun 2023 07:27:25 +0000
<![CDATA[Congress approves debt ceiling bill]]>

Fears about a default in the US have finally abated. After a prolonged standoff, the Senate passed bipartisan legislation that lifts the government's $31.4 trillion debt ceiling. However, the parties reached an agreement just a few days ahead of the X-date.

It was extremely hard for congressmen to make concessions. Hence, the bitter battle over the debt ceiling seemed endless and the final decision was made at the last moment. Uncertainty and risk aversion persisted in markets. US Treasury Secretary Janet Yellen was one of the first to warn about the problem. She noted that the US was unlikely to reach mid-June and still be able to pay its bills, underscoring the urgency to reach a deal. Thus, June 15 was a "hard deadline" for the federal government to raise the debt ceiling. After June 15, the country would have made additional tax payments. Yellen doubted that the United States would have had enough money until that date.

"We take the debt ceiling seriously as a constraint on our ability to pay bills that are coming due. And my assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid," Yellen stressed.

White House Press Secretary Karen Jean-Pierre also added fuel to the fire. She accused Speaker of the House of Representatives Kevin McCarthy and his team of creating a threat of default. "The Speaker’s team put on the table an offer that was a big step back and contained a set of extreme partisan demands that could never pass both Houses of Congress,”  Karine Jean-Pierre pinpointed.

However, the parties eventually managed to strike a deal, averting a first-ever default.


The material has been provided by portal -]]> Fri, 02 Jun 2023 15:51:42 +0000
<![CDATA[Musk and Bezos have more money than US Treasury]]>
According to The Hill, the fortune of the two wealthiest billionaires, Elon Musk and Jeff Bezos, has exceeded the amount of money that the Treasury currently has.
To avoid a default, which an unsettled debt ceiling issue could have caused, the US Treasury Department has allocated $49.47 billion. The department supposes that this amount is enough to meet the government's obligations on the national debt. Meanwhile, the number of billionaires whose net worth surpasses $49.47 billion rose to 25. US leading entrepreneurs Elon Musk and Jeff Bezos are also on the list. Their fortune is estimated at $179 billion and $139 billion respectively.Notably, Elon Musk, a founder of Tesla and SpaceX, is ranked second among the world’s richest people. According to the Bloomberg Billionaire Index, the third place goes to Jeff Bezos, the founder of Amazon. The first place is occupied by French billionaire and LVMH CEO Bernard Arnault. His wealth is seen at $189 billion.Microsoft co-founder Bill Gates is next on the list with a net worth of $125 billion. Then, Google co-founder Larry Page goes. His fortune is estimated at $112 billion. Curiously, Michael Bloomberg, the founder of the outlet, is left off the list. His wealth is $94.5 billion.Notably, last week, speaker of the House of Representatives Kevin McCarthy warned about an inevitable default in the country if the government failed to settle the debt ceiling issue. The congressman supposes that President Joe Biden is responsible for the situation.Earlier, the US Treasury specified the date of a possible default. However, the final deadline was provided by US Treasury Secretary Janet Yellen. She said that the government would run out of money by June 5. Initially, a default was expected on June 1.The material has been provided by portal -]]> Fri, 02 Jun 2023 14:57:45 +0000
<![CDATA[Turkish lira slumps following election results]]>

The already suffering Turkish economy experienced even more pressure amid the presidential election that took place in late May. Persistent political uncertainty sent the local currency and stock indices tumbling once again. Unfortunately, the Turkish lira has already seen many such falls. Following Erdogan’s election victory, the lira extended its slide together with Turkey’s benchmark BIST-100 index which tracks the performance of 100 major national companies. The Turkish currency has slumped below 20 against the US dollar, down from 19.3 just a month ago. Investors have been rapidly losing confidence in the local currency due to the high level of uncertainty that gripped markets after the first round of the election in Turkey. Two major candidates in Turkey's presidential race were Recep Tayyip Erdogan, who was eventually reelected in a runoff, and his main opponent, Kemal Kilicdaroglu. Markets were cautious with trading decisions while anticipating a possible shift in the economic policy of the country if the opposition leader had won. In this scenario, the new government could have probably stopped lowering the key rate to support a weakening lira. Meanwhile, Erdogan known for his unconventional view on the economy and interest rates is likely to pursue his previous policy of cutting rates. Such an approach has already resulted in the lira depreciating drastically in the past year and a half.

The material has been provided by portal -]]> Fri, 02 Jun 2023 14:37:18 +0000
<![CDATA[Germany on verge of economic crisis]]>

Germany has been deemed the driving force of the European economy for many years.  However, analysts see signs of slowing down. It makes them extremely worried about the economic prospects of the fourth-largest economy.

Germany has always helped all eurozone countries cope with difficulties. However, now its economy is on the verge of crisis. The problems have been mounting for the first two quarters of 2023.

According to Bloomberg analysts, the German economy is losing steam which may adversely affect the euro area.

"Decades of flawed energy policy, the demise of combustion-engine cars, and a sluggish transition to new technologies are posing a threat to the economy. We’ve been naive as a society because everything seems fine. These problems we have in Germany are accumulating. We have a period of change ahead of us; I don’t know if everyone realizes this," Martin Brudermüller, the CEO of BASF, said.

For several years, Germany has successfully tackled different problems. However, the country needs to develop a strategy to overcome the crisis. Bloomberg analysts predict that Germany could lag behind other European countries "for many years." International Monetary Fund (IMF) made a similar prediction.  The Fund expects Germany's GDP growth to be the slowest among the G7 countries in 2023.

On May 25, the German Federal Statistical Office reported that in the first quarter of this year, the country's GDP decreased by 0.3% compared to the same period in 2022. A contraction for two consecutive quarters indicates a looming recession.

Despite the current difficulties, German Chancellor Olaf Scholz is optimistic about the prospects of the national economy. He assumes that its economic potential is still high and it will eventually get back on track.

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<![CDATA[National security restrictions likely to harm Chinese economy]]>
The Chinese economy is likely to lag behind the US due to Beijing’s focus on national security, Minxin Pei, professor at Claremont McKenna College noted.Pei stated that while both the US and China regard national security as important and are ready to make economic sacrifices to uphold it, the United States is expected to come out on top in the competition with its rival. China, on the other hand, is likely to bear higher costs in the game of economic attrition and fall behind the US.Among the problems faced by the Chinese economy, the analyst noted the loss of access to US technology and IT solutions. These measures were previously imposed by the US authorities in the name of national security. In response, China banned the products of US semiconductor manufacturer Micron. The professor thinks it will be costly for China, even though Chinese authorities are taking solace in the fact that the American economy will also suffer due to this confrontation.Currently, foreign companies that plan to do business in China are facing a number of restrictions. China's regulators are checking them for potential security violations, which has scared off a number of foreign investors.The Chinese government is currently spending vast amounts of money on maintaining national security policies. At the same time, Chinese manufacturing output is declining along with demand for various products. However, experts assume that in the long term, the Chinese economy will outperform the US economy, and that the world’s second-largest economy will eventually catch up.
The material has been provided by portal -]]> Fri, 02 Jun 2023 13:23:42 +0000
<![CDATA[IMF sees US inflation remaining above Fed's 2%]]>
IMF chief Kristalina Georgieva sees US inflation above the Federal Reserve’s 2% target in 2023 and 2024.In April 2023, the head of the IMF predicted that the United States would face more problems due to growing global economic vulnerability. Although the banking sector in the United States and Switzerland is going through rough times, the 2008 global financial crisis will unlikely repeat, Kristalina Georgieva emphasized.The IMF CEO also touched upon the US debt ceiling issue, saying it should be solved to avoid a default. She also commented on tense debt limit negotiations between the administration and Congress.The material has been provided by portal -]]> Fri, 02 Jun 2023 09:40:31 +0000
<![CDATA[Microsoft appeals for AI regulation to avoid pitfalls]]>
Microsoft calls for US regulators and global enterprises to regulate artificial intelligence (AI). Tech-giant's President Brad Smith urged governments and corporate leaders to improve the development of AI technology and take control of it. Describing AI as the most influential technology today, Brad Smith outlined a five-step plan for how the world’s governments, private institutions, and companies could address the risks of AI. Earlier, Microsoft stressed that AI systems required effective “safety brakes” that control critical infrastructure and ensure human oversight and accountability. In addition, the company urged to develop a broad legal and regulatory framework based on the technology architecture for AI. Analysts note that the accelerated development of the innovation has revealed a number of drawbacks, including threats to privacy, the loss of jobs due to industrial automation, and misinformation on social media. According to Microsoft executives, governments and companies bear full responsibility for AI products and should mitigate all risks. At the same time, Microsoft understands its responsibility, pledging to reinforce security when working with new technologies.The material has been provided by portal -]]> Fri, 02 Jun 2023 07:52:01 +0000
<![CDATA[JPMorgan sees BTC soaring to $45,000]]>

According to JPMorgan, bitcoin could rise to $45,000 this year. Its rally is likely to be driven by the current price of gold, which has come close to $2,000 per ounce. Such a conclusion has been made after observing the dynamics of the two assets. 

BTC and the precious metal tend to move in tandem and are viewed by investors as alternatives. With the price of gold above $2,000 per ounce, the value of the metal held outside central banks is currently valued at $3 trillion. Against this backdrop, bitcoin could rally to $45,000, analysts estimate. This scenario is possible if the biggest cryptocurrency equals gold in the portfolios of private investors.

However, currency strategists at JPMorgan see the $45,000 mark as an upper limit, suggesting that bitcoin’s upside potential is limited. Markedly, the upcoming halving of the digital currency scheduled for 2024 will double its production cost to around $40,000. This level has historically been the lower price limit of the token, JPMorgan stressed.

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<![CDATA[Janet Yellen assesses effectiveness of sanctions against Russia]]>
US Treasury Secretary Janet Yellen has commented on the effectiveness of the sanctions regime imposed on Russia and stated that Western countries will focus on thwarting attempts to evade the restrictions.“This year, a central piece of our strategy is to take further actions to disrupt Russia’s attempts to evade our sanctions,” Yellen stated at the meeting of G7 finance ministers and central bank governors in Niigata, Japan. Participants of the meeting reviewed the impact the sanctions regime has on Russia.The Treasury Secretary outlined a three-pronged approach focused on improving information sharing among the countries participating in sanctions, putting pressure on companies and jurisdictions that are allowing or facilitating evasion, and shutting down specific channels used by Russia to equip and fund its military.Overall, Janet Yellen described the sanctions as effective, with Russia’s evasion attempts being a clear sign of that.The material has been provided by portal -]]> Mon, 29 May 2023 05:34:44 +0000
<![CDATA[EU greenlights Microsoft’s takeover of Activision Blizzard]]>

Not so long ago, Microsoft Corp. announced plans to acquire Activision Blizzard Inc., a leader in game development and interactive entertainment content publisher. To do so, Microsoft had to convince regulators that the merger would not hurt competition. The company was able to overcome this obstacle. The European Commission approved Microsoft’s $68.7 billion acquisition of Activision Blizzard. "The approval is conditional on full compliance with the commitments offered by Microsoft," the European Commission stated.

Microsoft announced its intent to acquire Activision Blizzard in January 2022. It was preparing to take over the company in the summer of the same year. However, such large acquisitions are not made without the approval of US and EU regulators. Activision Blizzard is truly a legendary company in the gaming industry. It has released such videogames as Call of Duty, World of Warcraft, Candy Crush, Tony Hawk, Diablo, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, and StarCraft. This is why regulators probed the merger. The European Commission greenlighted the deal after accepting Microsoft's offer to modify its licensing agreements and release Call of Duty on various cloud gaming platforms.

If Microsoft were to make Activision’s games exclusive to its own cloud game streaming service, it would not significantly impede competition in the distribution of games via cloud streaming, the regulator stressed.

Now, Microsoft needs to convince US regulators. At the end of last year, the Federal Trade Commission (FTC) filed an antitrust case against Microsoft to challenge the software maker’s attempt to acquire Activision Blizzard. "With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition - including competition on product quality, price, and innovation,” the FTC said in its complaint. The FTC case is set to go to trial in August.

The material has been provided by portal -]]> Fri, 26 May 2023 14:56:40 +0000
<![CDATA[Investors to sell US stocks as AI forms bubble]]>
Bank of America Corp. strategist Michael Hartnett supposes that investors should sell US stocks as “tech and artificial intelligence are forming a bubble.”
Notably, in 2022, Michael Hartnett predicted a massive outflow of money from US stocks amid concerns about the approaching recession. The forecast came true and traders switched to some other assets. At the moment, the analyst recommends selling the S&P 500 at its current level of 4,200 points.  BofA thinks that the Federal Reserve is unlikely to stop the key rate hike this year. In the event of this, US bond yields may jump to 4% or even higher.On May 19, the 10-year US Treasury yield was trading at about 3.6% after a surge caused by the debt-ceiling debate.What is more, BofA fears the formation of a small bubble caused by investments in artificial intelligence (AI) technologies. “AI for now is a baby bubble, noting that in the past bubbles always started with easy money and ended with rate hikes,” Michael Hartnett pinpointed. This time, the situation may repeat.Citing EPFR Global data, BofA reported that the outflow of capital from tech companies had been observed for five weeks already. As a result, during the week through May 17, equity funds had $7.7 billion outflows. Meanwhile, bonds have seen considerable inflows in the last eight weeks.The material has been provided by portal -]]> Fri, 26 May 2023 12:53:40 +0000
<![CDATA[UK billionaires see their wealth shrink]]>
According to The Sunday Times Rich List, the number of billionaires in the UK has decreased for the first time since the 2007–2008 crisis.The updated list includes 171 billionaires. Their combined wealth expanded by as much as £30.7 billion ($38.2 billion) to £683.9 billion ($851 billion). However, in the face of double-digit inflation, the real fortune of British billionaires shrank.As many as 350 richest people and families in the UK are now worth £796.5 billion ($991.5 billion). This figure exceeds Switzerland’s annual GDP. The Hinduja family tops The Sunday Times Rich List. It owns Hinduja Group, a financial and industrial conglomerate. The family’s fortune is estimated at £35 billion ($43.6 billion). Hinduja Group is present in several business sectors, including banking, real estate, journalism, automotive, chemicals, and healthcare.Over the past year, the wealth of most British billionaires has plummeted. The fall came due to the tightening of monetary policy, serious issues in the global financial industry, and the burst tech bubble.Notably, Prime Minister Rishi Sunak and his spouse Akshata Murthy have lost as much as £201 million ($250 million) over a year after a sharp slide in the share price of Indian IT giant Infosys, co-founded by Akshata Murthy's father. At the same time, the wealth of Sir Richard Branson, the founding father of Virgin Orbit, has tumbled by 42.6% to £2.41 billion ($3 billion), triggered by a steep decline in the company’s shares.The material has been provided by portal -]]> Fri, 26 May 2023 11:45:41 +0000
<![CDATA[China unveils ambitious development plan for Central Asia]]>

According to Reuters, Chinese President Xi Jinping has unveiled an ambitious plan for Central Asia’s development. It includes a number of important missions, from building infrastructure to expanding trade ties. Thereby, China is trying to take on the role of a leader in the region, which is traditionally Russia's sphere of influence.

China intends to implement development strategies with several countries, primarily Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The Chinese leader is ready to provide assistance in modernization, infrastructure construction, and mutually beneficial trade.

The five Central Asian states in turn offer China a network of alternative routes to transport essential goods such as fuel, food, and other commodities. However, they can be used only in unforeseen situations and in case of disrupted logistics.

Under the agreement, the parties will respect and support each other in defending core interests such as sovereignty, independence, national self-determination, long-term development, law enforcement, and defense capabilities.

For efficient cooperation, China will reportedly upgrade bilateral investment agreements and boost cross-border traffic volume. This will help create more jobs, launch the construction of production facilities, and bolster tourism. The world's second-largest economy is set to provide Central Asian countries with financial support amounting to 26 billion yuan ($3.8 billion). This is enough to realize large-scale projects, preliminary estimates show.

Notably, two-way trade between China and Central Asian states reached $70 billion in 2022. China's foreign trade turnover with Kazakhstan accounted for $31 billion.

At present, China supports the construction of an international transport corridor across the Caspian Sea and the development of China-Europe freight train hubs.

The material has been provided by portal -]]> Fri, 26 May 2023 08:22:18 +0000
<![CDATA[Even if US debt limit settled, markets will be badly bruised]]>

Analysts at Bloomberg warn that market participants are unaware of serious repercussions, even if US legislators pass a deal on the federal debt ceiling. Other Wall Street experts are on the same page, saying that the last-minute deal will prevent the US government from defaulting on its debt but will entail devastating consequences for the US economy.

According to Ari Bergmann, an analyst at Penso Advisors who specializes in hard-to-manage risks, investors should stay alert and hedge risks that could arise from the debt limit agreement.  

Experts believe that the US Treasury Department has to engage all available tools to replenish dwindling liquidity. Meanwhile, the government is rapidly running out of cash and soon will not be able to pay its debt obligations. 

For the time being, the amount of bank liquidity is very modest, but servicing the federal debt worth $1 trillion is sure to drain liquidity from the banking sector soon, the analyst warns. This will take its toll on the US economy which is already slipping into a recession, Ari Bergmann added. 

At the same time, the expert at Penso Advisors is cautious about what will happen after the Treasury replenishes cash liquidity on the back of shrinking bank reserves. 

The analyst predicts that as soon as the debt limit deal is nailed down, the dynamics of the Treasury cash balance, the Federal Reserve’s quantitative tightening program, and the fallout from high borrowing costs will put a great strain on risky assets and the US economy.

After Washington resolves the gridlock, the Treasury’s cash reserve is likely to swell to a record $550 billion by late June from the current $95 billion. According to the Treasury’s estimates, this figure could balloon to $600 billion. Notably, this outlook is not rock-solid because experts do not rule out other developments. 


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<![CDATA[JPMorgan expands algo trading into US bond market]]>

One of the largest investment banks, JPMorgan Chase, is expanding its algorithmic trading offers to US Treasury investors, betting on the high potential of this trading strategy. Analysts at JPMorgan believe that computing power can help its clients succeed in the world’s biggest bond market. Algorithmic technology analyzes bond prices in various venues to determine the best way to trade them. Yet, this strategy is not so widely used. For example, algo trading is very rare on Forex. At the same time, the situation is changing as more platforms for trading Treasuries have appeared in recent years. Automated trading should boost the number of trades, making their execution easier and reducing the spread between bid and ask prices. On the other hand, algorithmic trading could contribute to high volatility especially when markets are stressed. The algo execution framework was designed to trade any asset class. Initially, there wasn’t strong demand for this trading tool but now it has increased significantly in different trading venues and continues to gain traction. 

The material has been provided by portal -]]> Thu, 25 May 2023 12:26:47 +0000
<![CDATA[Warren Buffett assails handling of banking turmoil]]>

Many economists have vented their frustrations about the steps taken by the White House during the recent banking crisis. Depositors got their money back, the management of failed banks got away with it, and the US government stopped tremors in the financial sector by paying for everything. However, such a problem-solving approach has sparked outrage from professionals.

Berkshire Hathaway Chairman Warren Buffett was one of the opponents of government assistance. First Republic Bank offered non-government-backed mortgages at fixed rates, sometimes for terms of ten years, which Buffett called “a crazy proposition”. In his view, mistakes could have been easily spotted. “It was doing it in plain sight and the world ignored it ‘til it blew up,” the billionaire said.  However, regulation overseeing the banking sector was riddled with skewed incentives and poor communication with the American public about the safety of customer deposits. The latter factor resulted in panic, which in turn caused further hardship. Buffett also noted that executives in charge of failed lenders and the subsequent crisis should at least be fined.

Notably, First Republic Bank was rescued by its rival. It was taken over by top financial conglomerate JPMorgan Chase. Prior to that, the California Department of Financial Protection and Innovation (DFPI) shut down the bank, but then the Federal Deposit Insurance Corporation (FDIC) agreed on a deal. Interestingly, according to the Fed's report assessing the resilience of the US financial system, the national banking sector is currently stable.

The material has been provided by portal -]]> Wed, 24 May 2023 14:14:00 +0000
<![CDATA[China bars Micron chips following failed cyber security probe]]>
The Cyberspace Administration of China has banned products of US chipmaker Micron Technology as they threaten China’s national cybersecurity. Earlier, Chinese authorities inspected chipmaker Micron, fearing its activities threaten national security. The company has potential problems with network security, according to an audit by China's cyberspace regulator. Ranked in the top three along with South Korea's Samsung and Hynix, Micron is one of the world's leading chipmakers. The company's products include Dram memory chips. Earlier, US officials said they found China's ban on Micron products unjustified. The White House says the restrictions contradict Beijing's claims that its markets are open and comply with regulations. The US administration noted that it prepared a joint symmetrical response with key allies and partners to leverage the situation. In late April 2023, the Financial Times reported that US authorities called on South Korea to limit the supply of semiconductors to China in the case of a ban on Micron activities in the country. In addition, Washington urged Seoul to influence the largest chip suppliers, Samsung and Hynix, to reduce their sales to China. In October 2022, the US limited 28 Chinese technology companies from accessing semiconductor chips made using US technology. All international companies that use US semiconductor technology are subject to these restrictions.The material has been provided by portal -]]> Wed, 24 May 2023 09:27:07 +0000
<![CDATA[Karine Jean-Pierre: default could be gift to China and Russia]]>
White House Press Secretary Karine Jean-Pierre supposes that Moscow and Beijing could benefit from a possible default in the United States. The fact is that the default is likely to be considered a collapse of the US economy.
At the press briefing, Press Secretary Karine Jean-Pierre was mostly answering questions about the upcoming default. Although the raising of the debt ceiling is more like a formality than a reason for serious debates in Congress, people need some comments from officials. “If there was a default, it would be a gift to China, to Russia, and to other competitors,” Karine Jean-Pierre said at the briefing. She thinks that “both Russia and China would look to use a default to demonstrate the chaos within the United States, that we’re not capable of functioning as a democracy.” The countries may use the situation to declare a collapse of the US economy. However, some analysts think that both Russia and China will benefit more from the loosening of sanctions than by a default. Apart from that, mass media has enough information to discuss a slump in the US economy for several weeks. Notably, if the US faces a default, this will primarily affect the countries that use the greenback. “A default would create global uncertainty about the value of the US dollar and the US institutions and leadership, leading to volatility in currency and financial markets and commodity markets that are priced in dollars,” Jean-Pierre emphasized.Earlier, US Treasury Secretary Janet Yellen predicted the date of a default in the United States. She supposes that Washington will run out of money at the beginning of June. “And there is a chance it could be as early as June 1st. Of course, there is a lot of uncertainty,” Yellen pinpointed.The material has been provided by portal -]]> Tue, 23 May 2023 13:07:50 +0000
<![CDATA[The Economist: US dollar’s power ebbing away]]>

Rivals of the collective West team up to build their parallel universe. Dodgy regimes create their ideology and economic concepts and interpret geopolitical events through the prism of their official rhetoric. Oddly, negative economic growth is a newly-coined term meant to define moderate economic development. Sanctions and bans actually boost economic progress. The rogue countries declare that the Chinese yuan has already replaced the US dollar as the world’s number one reserve currency. On top of that, alternative experts insist that Western advanced economies lag behind emerging markets and third-world economies. 

The renminbi has again come under the spotlight. The Economist, the British weekly periodical, published another article on the end of the US dollar’s global reign. The bottom line is that the yuan has dazzling prospects to become a new main reserve currency. All in all, the US which still remains the top global economy is doomed to failure. 

“Every so often an appetite surges for an alternative reserve currency to the dollar—and a market booms in predictions of the greenback’s imminent demise,” the article reads. Notably, some countries are able to evade the well-established system if they wish.

No doubt, the authors took notice of helpful economic sanctions. They pointed out that Russia’s economy did not suffer from the sanctions because 16% of its exports are now settled in yuans. Besides, the journalists underscored the rapid progress of the Chinese alternative to the SWIFT payment system and Beijing’s moves towards mutual trade transactions in the renminbi.

The new technology of digital payments and digital currencies introduced by central banks could simplify money flow around the world without the involvement of the US, the authors conclude.            


The material has been provided by portal -]]> Tue, 23 May 2023 12:28:43 +0000
<![CDATA[Uday Kotak calls USD “biggest financial terrorist”]]>

It seems that these days, all and sundry are talking about the US dollar and foretelling its imminent decline. Some experts see the future of the greenback as rather gloomy and blame it for all the troubles. Thus, Uday Kotak has recently called the US currency “the biggest financial terrorist in the world.” Uday Kotak is the richest banker in Asia and the CEO of Kotak Mahindra Bank, one of the largest banks in India. In his speech at the ET Awards in Delhi, the banker harshly criticized the dollar, saying that its status as a reserve currency gives it an unfair advantage in controlling global transactions. “All our money is in nostro accounts (bank accounts held with a foreign bank in local currency). If somebody in the US decides to block it, you are stuck. That is the power of the reserve currency,” Kotak explained. At the same time, he couldn’t see any alternatives to the US dollar although he acknowledged global efforts to find a new reserve currency. He doubted that Europe, the UK, or Japan could offer their currencies for this role. China’s yuan is also unlikely to become the next reserve currency mainly due to the issue of trust.

The material has been provided by portal -]]> Tue, 23 May 2023 11:29:01 +0000
<![CDATA[Powell says mild recession possible this year]]>

The prophets of doom and gloom keep predicting grim scenarios for the US economy. For instance, they are constantly making predictions about the imminent recession. However, this is one thing when such forecasts are made by various analysts but the other one when Fed Chairman Jerome Powell admitted such a possibility.

He reckons that the US could face a recession. Powell voiced his concerns in an interview with Forbes. He stressed that a mild recession is likely this year. "Avoiding a recession is, in my view, more likely than having a recession. But I don’t rule that out either. It’s possible that we have a mild recession."

The Fed has raised its benchmark rate to the range of 5-5.25%, the highest level since 2006. Given that the US is the world's largest economy, a recession in this country will be disastrous for the commodity, stock, and financial markets. It will inevitably have a negative impact on other industries.

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