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Jay Powell at US central bank the Fed says economy is strong and stable in March 2025. He points to low unemployment at 4% and other improvements including in lowering inflation that show the US economy in good shape, in his comments at Congressional hearings.

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Russian shadow fleet and about 80% of Russian oil now sanctioned after US sanctions on Rosneft and Lukoil- Feb 2026. This is putting more oil onto a fleeet of vessels operating under Comoros, Sierra Leone and third nation flags, or even two flags, which the Americans and Europeans are tracking and diverting. Russia seeks to put this oil on an alternative tanker fleet it owns and which is insured by Russia, that goes from the Baltic and Black seas to the Mediterranean to refineries in Turkey, India and China. What thsi does is increases risks for Russia in shipping and for the Euroepans and Americans when ships fly Russian flags with military convoy. The overall effect of cutting Russian oil exports in addition to India committing to buy American oil and Venezuelan oil instead of Russian oil in its trade agreement with US, is that Russian economy may be in risky territory. Inflation is higher than official 6 percent at 16% interest rates, and this increases the risk. Budget needs within Russia may not be met as this continues. It is in Russia's interest now to conclude a peace agreement with Ukraine, now that the US has moved away from NATO/Europe to peaceful cooperation with Russia and competition with China. ...

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In this analysis of Keir Starmer's speech at the Labour conference inLiverpool in October 2023 The Guardian looks at the scale of the task ahead. Starmer faces the task of the 1997 style decline of public services, the need to channel the Harold Wilson mission to modernize the economy in a time of change, and the Clement Atlee 1945 imperative to build a new Britain "out of the trauma of collective sacrifice." Starmer told delegates- "In 2024 it will have to be all three." Such is the task facing Britain and Starmer in 2024. Something similar is taking place in the US with Biden and Modi in India in 2024, in three of the largest democracies in the world, and two of the oldest.

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Antonia Romeo new UK Cabinet Secretary Feb 2026-  precocious yet "warm and forthright"  in civil service interactions active as Consul General and at Home Ministry. After Westminster school and Oxford University, and a stint working at Oliver Wyman in management consulting, she joined the civil service. Becoming permanent secretary at the Department for International Development and the MoJ, and spent time as consul general in New York. She spent time with immigration and boat migrant issues at the Home Ministry, and is now keenly aware of the issues facing Britain. That bit of precociousness is needed at this time to set out a plan of action and get results for Starmer and his team. Based on what Labour stands for building on the skills of everyone in Labour not just those who go by labels as centrists, left and right, false labels that ignore that common sense means something else entirely. Getting results means addressing tough issues for the economy, cost of living, housing, through honesty, resilience, hard work and dedication. ...

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Prodigous investments in AI data centers is crowding out investment in essential infrastructure that would cut the cost of living in the US. Such as investment in pharmaceuticals in the US, investment in automobiles and rare earth processing, in housing and schools would reduce cost of living by bringing down prices and provide huge human returns for every dollar spent in addition to larger profits over a long period. Shown here is the AI data center for Microsoft in Atlanta. Microsoft has invested $34 billion the first fiscal quarter of 2025 alone, with similar investments by Amazon, Tesla, Google, and others for $400 billion capital allocation in 2026. Investments are also being crowded out in the replacing of the aging infrastructure of the US  of roads, rail, subways systems, transport systems, bridges, airports and ports. Some of these investments such as in ports and logistics are needed to make America a manufacturing and exporting nation. Economists loved to talk about crowding out of investment by the private sector when the government spending was significantly higher as during and after World War II. Today there is little talk about the massive misallocation of capital in the US economy. Where public infrastructure is ravaged by time and mismanagement as in New York political trends are calling for free public transport  and supported grocery stores in NYC, when the root cause the overall picture of the Nation's spending in rebuilding America is ignored or unaddressed, which would get to the root cause of the cost of living and quality of life issues that concern all the people of this Nation. ...

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Russia is expected to earn nearly $321 billion from energy exports in 2022, up more than a third from 2021. This more than anything else is supporting the currency. It also means Europe will continue to buy Russian oil and gas through 2022. The rest of the reason experts say for the resilience of the rouble is  that Russia has put in place capital controls and raised interest rates to 20%. This they say is an artificial boost and the rouble is likely to weaken in the long term. 

The steps take to keep the value of the rouble and also the damage to the trading and economic relationship Russia had with the world after invasion will reduce growth in Russia. Growth of 2.8% in 2022 will turn into 10-15% contraction in the economy in 2022. 

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China's economy is feeling the effects of a sharp slowdown of the economy with covid lockdowns in 2022 and the Ukraine crisis undermining confidence in China. Internal divisions on president Xi's policies of allying with Russia on Ukraine are shown in this report by the WSJ. China faces a collapse of its relationship with the US and Europe says the WSJ. With it China's economic growth faces a sharp slowdown.  From 18% at the beginning of 2021 economic growth has slowed down to 4% in fourth quarter of 2021. The current situation in Ukraine and Mr. Xi's response create risks of collateral damage for Chinese manufacturers with weakening global demand, says the WSJ. Deng Xiaoping's policy of opening China which happened for the last 40 years is being reversed with Mr. Xi's policies and the stance taken by the Biden administration is supported by the US Congress by both Republicans and Democrats.  This WSJ report points out that premier Li Keqiang has pointed to the risks China is facing in somber tones calling the external environment for China in 2022 "more complex and severe." At the same time Hu Wei a senior adviser to the State Council stirred up discussion online with an article about Mr. Xi's pro-Russian policy, saying "China can't be tied to Putin and the ties need to be cut off as soon as possible."  ...

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The Stimson Center looks at the closing of an era of Conservative politics in Japan which ended in 2025 after the death of Shinzo Abe and the 2 year premiership of Kishida. Interview is conducted by the Stimson Center of a senior Japanese political figure with 30 years of experience in the Foreign Service, and the author of the only English language book on Shinzo Abe, reflecting the paucity of research on Japan. Shinzo Abe was premier for a short time in 2005-2006 and for a full term in 2012. He made changes to Japan's SDF, its partnership with India, Australia in the Quad, and his economic policy which increased women's participation in the economy. For the first time in post war Japan there was a new sensde of confidence under Abe and he is missed sorely in Japan today. Yet as this senior Japanese politician says, Japan has changed the way the US and Europe have changed, and nationalist politics are replacing old Conservative politics of the LDP. In a way also how the deindustrialization of US, Europe and Japan has also taken place discrediting that era. Takaichi Sanae is itself a representative of the new era, as she did not hesitate to say Japan would get involved if China attacked Taiwan. Her popularity is at 62% and she has called a snap election, as she came in to replace Shigeru Ishiba in October 2025 and was not directly elected PM. Yet in the long view this is also a misconception because neither the Stimson Center or the interview participants had a keen sense of who Abe really was and Abe's grasp of the history of the Kamakura period of Buddhist Japan and China, India, of the 12th century before the foreign invasions from the north. One of Shinzo Abe's biggest legacies is the relationship that was close to his heart, the relationship with India and prime minister Modi. This week chancellor Merz of the Federal Republic of Germany was at the kite festival with PM Modi in Ahmedabad and at the Sabarmati Ashram of Gandhiji. The same degree of warmth shown by the German leader and Modi reflecting Vivekananda's time in Germany, was seen long time back between Modi and Abe. The bullet train project Mumbai to Ahmedabad and the ones that follow across India are a testimony to the warmth shown by Abe for India, and his knowledge of history from the Buddhist period in India when by the 12th century in Japan in Dogen's time Tenjiku (India) was the sacred homeland of Buddhism. Today India has revived the Buddhist traditions and centers of Buddhism, the universities and research centers for Buddhism from that period in Indian history. Buddhism started in India near Nepal in what is now Bihar state at Sarnath and Kushinagar, and spread through China to Japan and Korea. The whole continent of Asia would reflect Buddhist ideals and ideas without the intervening period of Vedic culture in India and China's Mongolian and Manchurian northern invasions, and the periods of European colonialism. Today Buddhism and The Bhagavad Gita are itself strung like pearls on a string as the Gita itself says, part of the long spiritual traditions of three nations- India, China and Japan, and of the many others Vietnam and Korea. ("All these worlds have their rest in me as many pearls on a string." -Mascaro tr. of Bhagavad Gita, Penguin). As Asian nations and peoples come to their own inner selves, find their inmost self, this is the culture that really pervades all of Asia. ...

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Powell needs agreement of others on Fed Board to set US interest rates August 2025. There is now a divergence of opinion with some Fed members looking to lower interest rates in coming months to aid the US economy as it resets the terms of world trade for a level playing field for all, something that had not happened by the ineptitude of previous presidents.

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Only the week before Tuesday April 7 Pakistan Foreign Minister Dhar failed to convince China to get involved. April 7th Tuesday in the US 1.30 pm US time, 8 pm Islamabad Pakistan time, China finally decided to jump in to convince Iran to accept peace talks in Islamabad. It is quite possible that behind the scenes the US was talking with China which has a 25 Year Comprehensive Agreement with Iran signed in 2021 that is the main support for the Iranian economy. China acted to reassure Iran that talks in Islamabad would proceed smoothly, and persuade Iran to accept ceasefire and talks. Why? Knowing that brinksmanship by US and Iran would lead to unforeseen consequences and hurt China's economy with oil price volatility as well as  hurt the US economy, and hurt the prospects for the planned May14-15 visit by DJT to Beijing to improve economic and political ties, both China and the US wanted to do everything to prevent this from happening. The result a hastily arranged peace talks in Islamabad so that by 4 am Islamabad time on Wednesday or 6.30 pm US time on Tuesday evening the ceasefire had already been agree to by US and Iran, according to this report in The Guardian from Pakistan. The crux of the matter was that it would affect US and China's economy with oil volatility, and US-China relations by jeopardizing May 14-15 revised date for DJT visit to Beijing. This good sense prevailed over all the war rhetoric and the media information and disinformation. It is confusing because of all the misinformation, but becomes clear when one understands this in the context provided in this report from Pakistan by the Guardian. Why Pakistan? For Pakistan the missile attack the day before of a Saudi petrochemical complex by Iran was drawing Saudis into the war and Pakistan has signed a defense agreement with Saudi Arabia that requires Pakistan to support Saudi Arabia if it gets into a war. For Pakistan it was a fragile situation that would be a catastrophe with unforeseen consequences on its economy. Already schools are closed for 1 month in Pakistan and oil is in short supply, paying for it at $115 or $125 a barrel would put severe strain on Pakistan. Who wins, who loses is being told in the media- much less on the good sense that prevailed  the efforts and the predicament of the large powers China, India, the US, and Germany, European Union, the poorer countries, all hurt economically, caught in a war they do not want, do not need. ...

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This article in the Atlantic Council September 17, 2024, shows that the world may be fixating on the Straits of Hormuz when it should really be focusing on the Red Sea shipping for the Suez Canal. The Iranians ship 1.5 million barrels a day of oil through the Straits of Hormuz, and closing it off would close off the oil revenues that sustain its economy. Wald writes that even if the Iranians in a crisis would clsoe off its waters to shipping another route exists in the Straits of Hormuz through UAE waters when needed by oil shipping and it has been used by British ships. The Red Sea and Suez presents risks coming from Houthi rebels supported by Iran, who have attacked the US Navy ships in the region.

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Kristof of the NYT writes about DJT Action in Venezuela January 3, 2026.  Some of the least understood aspects of the US president's language on Venezuela- The president's reference to oil resources is not for the US to benefit from the oil reserves. It is about oil in the sense that the oil industry in Venezuela is in total disrepair and broken from years and decades of nationalization followed by lack of investment, lack of western technology.  Sanctions put a huge price on the Venezuelan economy with the brunt of it borne by ordinary people- the same people that a socialist like Hugo Chavez thought he could help with his erratic ideology. As China, and now India has learned the only way to get ahead in this world for nations is to invest, invest, invest with larger and larger pools of capital, technologies and labour. By alienating the US or EU there is a loss of technologies and of investment so that one is going to bat with only one strike and you are out, so that from Day 1, China under Mao, India under Nehru had lost the race, so did all the "socialist" regimes in the world. Conversely China under Deng and successors, and India under Modi are breaking development records. How does the US change this? First it removes the sanctions on the Venezuelan economy. Second it gives Chevron the green light for increased production. Oil facilities of the Venezuelan oil company will get foreign investment and US investment from American oil companies with returns for both and the state oil revenues invested under a government that is able to invest it free of corruption or it being funneled out of the country to support other regimes in Latin America. This will rebuild the country's health system, its broken infrastructure, restore its finances, and make it in a decade one of the advanced economies in Latin America. But only if- the gangs and other private militias, the other military elements from the two decades of utter mismanagement and drug trafficking are  removed. A new way will have to be devised that the US as to work out ad hoc meaning in the process of doing, invented that meets the conditions of getting this done and the process of reconstruction of Venezuela under the Monroe doctrine of keeping the entire western hemisphere free of such elements. The US achieved this with the help of Great Britain in 1823 when it was only 50 years since it's founding in 1776. The US has the resources in 2026 to make this happen in the interests of the people of the western hemisphere, in the quality of life of people in the western hemisphere. It does not seek any country's resources, it seeks the development of the countries in the western hemisphere in the great tradition of Jefferson, Monroe, Lincoln, FDR and JFK. ...

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West Bengal elections in April-May 2026- the elections come after Sri Lanka, Bangladesh, and Nepal, nearby countries, all changed governments following protests about corrupt governance, mismanangement of the economy. Inside India there is a profound change that is not even covered in the  established media such as the BBC and DW.com. The states of Orissa, Andhra Pradesh, and Bihar, in the northeastern part of India had landslides in voting for the ruling BJP party and NDA alliance for Clean government and Modernization of the economy. A similar vote took place also with a landslide for Clean Governance and Modernization in the state of Maharashtra in the western part of India with the commercial hub of Mumbai (Bombay). In the southern part of India in Kerala, the capital city local government in Thiruvananthapuram has also shifted to this Clean Governance and Modernization under the BJP government that governs at the federal level in New Delhi. India is like China and Japan before it, going through massive change to modernize the country with new infrastructure building and rapid development including investments in hospitals, universities and airports, trade logistics, factories for industrial production. The magnitude of the change is reflected inthe population of most of these states being close to 100 million in each state West Bengal(105 million), Maharashtra(130 million), Bihar (133 million), almost the whole population of the US in just 3 of the many states- witnessing huge changes that could mean 20-25% growth rate a year n the next couple of years to 2030 doubling their GDP. ...

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After the disaster of the Japanese Fukushima nuclear plant in 2011 following a tsunami and earthquake chancellor Merkel made the decision to close nuclear plants. Germany will close 3 nuclear plants in December 2021. Decommissioning will take 20 years and 1.1 billion euros per plant. In 2022 Germany will have only 3 nuclear plants in Bavaria, Baden-Wurttemberg, and Lower Saxony, equivalent to power of 4 gigawatts from 1000 wind turbines. Gas prices are up 10 fold in 2021 as Germany makes the shift to wind and solar. Economy and Climate Protection Minister Habeck of the Greens party in the new German government sees a continuation of the policy removing nuclear plants and shifting to wind and solar.

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Greg Ip of the WSJ looks at the impact on the economy worldwide from the effects of variants of Covid-19 in 2022. He cites IMF estimates that global output will be 3% lower in 2022 than it had projected in 2019, with Western Europe and Latin America taking larger hits. US growth is distorted and disrupted with the effects of absence of workers from illness (5 million American workers not working in December 2021 because they were sick, or caring for someone sick or afraid of spreading it), supply shocks from supply chains, 7% inflation. The boost to productivity from digitization conceals the impact of an overworked and fatigue prone remote working workforce, says Greg Ip.

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The US Federal Reserve's interest rate increases are having an effect in cooling inflation in the US. The inflation report for May shows US inflation at 4%, half the inflation at its peak in 2022. The policies of the Biden administration are leading to increased investment in infrastructure and manufacturing in the US. This combined with lower inflation, assistance to the needy for the increases in cost of living, are helping boost the US economy in 2023. This is also setting the foundation for the kind of growth and confidence that the US has not seen since its recovery from World War II in the nineteen fifties and sixties.

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China GDP growth forecast at 5% in 2025 and first half actuals at 5.3% with frontloading. The frontloading is because of surge in exporting before tariffs hit by May.  China is waiting to put fiscal stimulus as it fears tariffs will lower growth and increase unemployment. The housing sector is in deep slump. At this point fiscal stimulus is determined in Washington DC. The actual growth in 2025 may turn out to be much lower than 5% considering the weakness in the economy and the issues of tariffs and tough trade negotiations with the US and a changed environment for trade with the European Union.

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Financial expert Guy LeBas- questions bond investors need to think about are whether $3 trillion in AI investments are societally productive, economically and financially productive. This WSJ podcast is a discussion on the effects in the bond market of financing by AI. LeBas says the corporate bond market is dominated by banks in 2025. AI financing makes up 7% of the corporate bond market in 2025 and is likely to double to 15% with the 5 Tech companies issuing corporate bonds. He says the question is what effect this will have on the economy, on society, and the larger question is what effect it will have on the Nation's priorities- for tackling crumbling infrastructure, investing in American manufacturing shriveled after 3 decades of neglect and unfair trading practices of trading partners, tackling climate change, needed investment in pharmaceutical manufacturing in the US, in education and childcare.

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James McIntyre's book about Gordon Brown, (title is Power with a Purpose) who like Jimmy Carter, was more respected in retirement for doing good work humbly and not getting into a revenue generating speaker's circuit or consulting, or boards of directors of companies. McIntyre looks at his career, the involvement of Mandelson as Business Secretary, the failures of Mandelson and Blair in New Labour, and Gordon Brown's failure to revive the Labour Party. The Times says Gordon Brown has grown in stature since leaving No. 10 Downing Street. Under Blair, Brown was No.2 and headed the British Treasury as finance minister. He only became prime minister at the end of his career during the 2008-2009 financial crisis. He started the effort to redefine Labour Party after Margaret Thatcher defeated the Labour candidate from Plymouth Mr. Foot and swept out socialist Labour and the trade unions. Then followed privatization and changes in the British economy which were followed by Reagan in the US by 1980. Through this period Brown and Blair tried to create the concept of New Labour which won in landslides as Britain switched back to Labour as the alternative. As the Blair magic withered Brown was left tackling the 2009 financial crisis but failed to define what Labour was- his Business secretary was Peter Mandelson who unlike Brown was in Labour but in for his own purpose and had a cynical attitude to politics as a way to retire in some privileged business position on boards of directors. The result is well known Cameron and the conservatives who were even less qualified than an earlier generation of Conservative politicians, their decision to call the Brexit referendum, the verdict of yes on Brexit leading to Cameron's replacement by Boris Johnson, and Britain having 4 prime ministers in a span of five years as discredited austerity drive was replaced by Keir Starmer's Labour. This project with McSweeney as Starmer's campaign manager cleared Labour of socialist outlook Corbyn supporters, won in a landslide in 2024, only to fail to define the purpose for which Labour stood for and Starmer's ratings dropping to new lows of 18% support as Reform UK's Farage took up the issue of migrants and the culture that enabled migrants to enter the UK. Britain has been let down by two generations of less competent, poorly qualified for public service politicians over three decades since the 1990's- through Blair/Brown, Cameron, Boris Johnson and left struggling with Keir Starmer. Sixty years after decolonization of an Empire in the 1960's, Britain has not gained in purpose and strength, only drifting along as new powers emerge in Asia and the world changes. ...

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The 28 Point Peace Plan offers a basis for further work to arrive at an agreement acceptable to Ukraine and to the European Union, is the view emerging at the G20 talks in Johannesburg, South Africa. The leaders of Finland, Ireland, Netherlands, Norway, Italy and Spain met on Saturday, November 22 2025. Separately Leyen and the EU council president Costa meet with Meloni of Italy and Macron of France on Saturday after conversations with Zelensky on Friday.  British prime minister Starmer has this view of the 28 Point US plan negotiated with Russia-  “There is only one country around the G20 table that is not calling for a cease-fire, and one country that is deploying a barrage of drones and missiles to destroy livelihoods and murder innocent civilians.” Ms. Von der Leyen, president of the European Commission, says-  “Ukraine can count on us because this is not only an aggression against Ukraine, but it is an aggression against the principles of the U.N. charter." “It’s on European soil. Therefore, we will support Ukraine for as long as it takes.” Macron of France commended American efforts to reach a peace deal but said EU nations would work with Ukraine to map out a plan for way forward in 48 hours.  "What is at stake is Ukrainian sovereignty and European security.” It is this aspect of European security that may be the reason the EU and Germany may decide to modify the plan to offer a counter proposal on several points. One on limits to the size of Ukraine's defense forces to ensure its defense. Another on the stationing of forces by NATO in a peacekeeping role in Ukraine as proposed earlier. Third on the ceding of territory now in the hands of Ukraine so that these parts of Ukraine can remain independent after 4 years of ragged defense. Germany under CDU Merz and with Pistorius of SPD at Defense in a strong coalition government may be the deciding factor as Merz has already set the goal for the Bundeswehr to become the strongest army in Europe, with plans and action to prepare for this transition to defend European interests. It is true that Ukraine is at a difficult point yet if the Europeans see this as a "capitulation" and a US DJT deadline of one week to push this through Europeans may come up with a counter offer that includes these points that would make it clear that they are not an obstacle for peaceful resolution of this conflict. The history of Europe shows that in such situations with most of Europe on one side and Russia or some other major European power on the other side, eventual settlement ends up with all sides making some concessions, and in no way seen as "capitulation." Asian powers China and India have been pulled out of the conflict to a large degree in 2024-2025, with US shifting to a neutral position. Making this a purely European conflict with the Russian economy mobilized for wartime yet facing all the nations of Europe led by Germany, France and the UK in a transition towards military preparedness and unwilling to see any form of capitulation. In such a situation the larger economies and resources of the EU could effectively counter a Russian threat leading to a settlement that is better for all parties to the conflict.   ...

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India's GST tax collections - which finance infrastructure -reach the 1.40 lakh crore mark  (about $20 billion) for 3 months in a row in 2022. Increase in tax compliance culture, audit analytics, and actions against tax evaders, helped increase GST revenue collections. Revenues from import of goods and revenues from domestic transactions were 44% higher than the same month in the prior year. The increased economic activity and creating tax compliance culture are good indicators for economic growth in addition to the GDP numbers showing about 8% growth in 2021, the highest in the world surpassing China by a wide margin.  The growth slowed to about 4% increase in GDP in the 1st quarter yet the events of the first quarter such as the war in Ukraine increasing food and oil prices, depressing economic activity, have some other indicators unique to India that are entirely positive and hold promise for a surge in economic growth in this decade to 2030. With the pandemic years 2020-2021 pointing to shift in supply chains of US and Germany away from China towards India and other Asian nations, the Russian invasion of Ukraine with support of China will only make this shift move faster. At a time when Indian logistics and infrastructure improvements under the PM's Gati Shakti Master Plan will create the right conditions for massive foreign investment in the Indian economy. ...

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Scott Bessent on restoring the mission of the IMF "brutally calling out imbalances" including China's surplus economy and unfair trading practices instead of "whistling by the graveyard"- in his address to the IMF, Feb 15, 2025. Bessent says the IMF and World Bank had mission creep and lost track of financial stability and were not asking the hard questions about China's focus on exports at the expense of the manufacturing capacity and jobs of America and Europe.  Hee are his remarks meant to show that Bessent is taking an all of the above approach on energy, knows climate change is real but cals for flexible approach, an approach he wants the World Bank to take. And for the IMF to focus on key issues that have led to deindustrialization of US and Europe essential for financial stability before getting into social and cultural issues that are not its mandate for which it is ill equipped to address. Bessent told the IMF and World Bank - "Instead, the IMF has suffered from mission creep. The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability. Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.   These issues are not the IMF’s mission. And the IMF’s focus in these areas is crowding out its work on critical macroeconomic issues. The IMF must be a brutal truth-teller, and not just to some members. Instead, today’s IMF has been whistling past the graveyard. Its 2024 External Sector Report was entitled “Imbalances Receding.”  This pollyannish outlook is symptomatic of an institution more dedicated to preserving the status quo than asking the hard questions."  Some of these hard questions are about surplus countries- about China and their focus on exporting their way till they destroy the manufacturing sector of the rest of the world. ...

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The Russian economy had GDP decline of 2% and was relatively not affected by the shutoff of imports of oil and gas from Europe in 2022. Gas exports to Europe began declining in the summer. The EU ban on seaborne oil from Russia and price cap went into effect in December 2022. Russia made a huge stimulus of 4% of GDP in 2022. The result is that only now in 2023 is the full impact being felt on the Russian economy.  WSJ reports that in January and February Russian exports of oil and gas revenue which makeup half of the budget fell by 46% year over year, while state spending jumped 50%. Analysts estimate that it would take a price of $100 for Russia to balance its books. Yet the Group of Seven price cap on Russian oil has brought it down to $50- the price the Ministry of Finance says Urals crude sold in February. This is a deep discount to the $80 price of Brent Crude, the US benchmark.  A bigger problem is the downward trajectory the Russian economy faces in future years. Worker shortages are severe for industry and a shift to wartime production does not add to productivity or productive capacity. The cut off from access to western technology and western financial markets will have a severe impact in the productive capacity for the economy, for oil and industrial production in the years to 2030. Russia needed to protect against the gradual shift away from fossil fuels to fight climate change by shifting the economy in a new direction using its access to western technologies not just China's technologies. Instead it now finds itself in a period of 1 year in 2022 when oil revenues surged with prices jumping from the war, and then a steady slump in all the inputs of development- supply of labor, capital and technology declining rapidly after 2023 as the costs of the Ukraine invasion are absorbed into the economy. As this report points out it is the social contract that similar to China's social contract of growth and improvement in standards of living that led to people having a large measure of confidence in the government. It was not fully grasped but it was the access to American and European Union plus Japanese technology, manufacturing, capital and markets that made this possible. With this absent the situation changes to put Russia, and China to a lesser extent as long as it trades with the west, on a different trajectory.  ...

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The European central bank increases interest rates by quarter percentage point taking the deposit rate to 3.5%. The US Fed held off on increases. The US Fed started early with its increase in interest rates and maintained a steady posture with 8 interest rate increases over 2022-2023 in a period of just over 12 months. It has strengthened the dollar against the euro. The slow response of the ECB and price gouging in Europe has worsened the inflation picture there. The US Fed's policy combined with consumers resisting price gouging by halting purchases from stores, untangling of supply chains, the Biden administration's series of actions to tackle the cost of living increases, and overall investment in the economy that keeps employment resilient including government investment for the first time, is creating a better economy for America than most of the last two decades. 

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US economic growth was 2.4% in the second quarter of 2023. Even though the Fed increased rates at 10 consecutive meetings by 5% since March 2022 to tackle inflation the US economy appears strong. Large investments in the trillions of dollars in US manufacturing and infrastructure, tackling climate change is what is different this time compared to the past 2 decades when bad decisions were made with twin wars in the Arab and Muslim world, and the supply chain was transferred to China, investments were neglected in infrastructure, education and health in public goods, and capital markets allocated money with decreasing advantage to the economy. President Biden was in a unique position after the pandemic to take stock of all these mistakes and move the nation forward in positive directions in a decisive way in scale as well as in spirit and determination. That he has done so is more proof of the resilience of America.