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Iran Ceasefire shaky May 11 2026 with no willingness on the part of IRGC Iran (Iran Revolutionary Guard Corps) to send all nuclear materials out of the country. Past experience has shaken American confidence in IRGC Iran's willingness to give up nuclear weapons development. Under president Obama some nuclear materials were sent to Russia, some left inside Iran which were after an agreement used by IRGC Iran to develop weapons grade enriched uranium, putting the situation back to where America started before the agreement. This is behind the DJT Republican administration's effort to get all nuclear materials out of Iran. This has wasted another decade for Iran, diverting resources needed for improving standards of living and cost of living to the weapons programs. The result is internal protests that were widespread in Iran including the middle class, not just students. So that today Iranian people are divided on the issue whether Iran should against all prevailing Middle Eastern and World opinion go for a nuclear weapon. The situation of clandestine development in North Korea and Pakistan of nuclear weapons is not existent today as the US is monitoring it constantly. Israel sees these weapons programs in Iran as a threat to its existence close to its borders in Lebanon and Iraq, which makes it unlikely that clandestine development is possible for nuclear weapons development anywhere in the Middle East. The UAE has also shifted its stance in favor of the US, Saudis want assurances, and India, Pakistan Egypt are in different ways seeking a denuclearized Middle East. This means the American DJT administration is NOT ALONE on this issue as the media in the US and Europe are presenting. Germany's Wadephul and Merz are closer to US thinking on this issue than the media says. Macron and Starmer are at popularity of less than 20% in France and the UK and do not reflect the opinion in France and Britain, and in Europe on this issue. In this sense the US is doing this for a safer world, for China, India, Brazil and EU, all the nations in the poorest parts of the world in Africa, Asia. These poorest nations which are bearing the brunt of this obsession with nuclear weapons development by IRGC Iran in a Middle East torn by 5 decades of wars from Kabul to Damascus, Baghdad to Tehran, by IRGC Iran (Revolutionary Guard Corps), as these poor nations confront lack of oil and fertilizer supplies. It does not come at a good time for even the largest nations about 3 billion people in China, India and Indonesia, Egypt which are suffering from the effects of oil shortages and fertilizer shortages when possibly at most about 40 of 90 million people in Iran support weapons programs, all others in Iran seeking a way out for better standards of living and living at peace with neighbors and the world. In that peacetime Middle East the Palestinian people could find solutions like the Irish people with the goodwill of all neighbors. ...

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Three tankers held off the coast of Mumbai by India's Cost Guard have been sanctioned for carrying Iranian oil. India stopped buying Iranian oil in DJT's first term 2016-2020. In his second term DJT wanted India to stop buying sanctioned Russian oil as a way to reduce funding for Russia's invasion of Ukraine now in its fourth year. India has stopped buying Russian oil as part of the goodwill effort to reach trade agreements with the US, EU, and Germany. The seizing of the oil tankers is part of a new effort by India to support bringing Russia to the negotiating table to end the Ukraine war. Russia has demanded Ukraine turn over Donetsk region to end the war, which is a major stumbling block as Ukraine says there are Ukrainians living in Donetsk region. Germany's increase in its defense budget and investment in its armed forces has led to Germany+ (Germany plus UK and France) acting as the chief supporter of Ukraine, after the US has taken more of a neutral stand. The US basically wanting to end the war in 2026 so that the US can address the situation in the western hemisphere with drug and migrant trafficking gangs in Mexico, Venezuela and Columbia, and rebuild its economy to bring back manufacturing from China. For India the guiding principle of its foreign policy is Gandhiji's thinking and advice for fairness and peaceful coexistence - it does not believe in a British inspired NATO expanding on the borders of Russia, and at the same time does not see how a war on a neighboring Russian speaking region is in Russia's continued interest for a fourth year with bombing of energy infrastructure to leave Kviv in darkness. Non -alignment was Nehru's not Gandhiji's idea- the ideas of respect and fairness are basic to Gandhiji's thinking and India will remain true to his ideas in world relations. One aspect of this change in world affairs is missed by all and the media, that is that with the EU and US+ Japan, and India+ Indonesia there is a population of 1 billion of western peoples, and about 2 billion of Asian peoples, for a total of 3 billion people. This is a region three times the size of China, which with its access to capital and technology, labour and good governance is in a position to industrialize and reindustrialize, and bring manufacturing/science and technology to the core of this economic region by 2035. An industrialized India with 2X-3X the size of its current GDP will still be governed on Gandhiji's ideas for world relations in 2047. ...

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India faces tariff of 25% with policies of reliance on Russia for arms and oil,  Mexico Canada and South Korea face higher tariffs August 1 2025 as they are holdouts now that UK, Japan, EU, Indonesia, Vietnam have agreements with the US on trade.

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DJT was asked if China's celebration of Victory Day with Russia recently in Tianjin had any message for the US. He said he did not see it that way, that US has good relations with China. In this context the Smithsonian Museum exhibit on military history of the US shows a real aspect of the World War II in loss of life- Russia 17 million dead, China 11 million dead, Germany 10 million dead, Poland 5 million dead, Japan 2.5 million dead, US 1 million dead, UK 800,000 dead. Russian and Chinese losses of 28 million dead are 15 times the losses of US and UK combined of 1.8 million dead. With the scale of losses of such magnitude Victory Day celebrations in Tianjin can be seen in the context of this shared history and major losses overcome as much of the world knows with US help. A sobering view is that the colonial powers Imperial Japanese Army, French and British policies caused famines in World War II leading to 6-7 million deaths in India, Indonesia and Vietnam which is 4 times the 1.7 million US and UK deaths. Views of China in the Context of the Ukraine War and Russia are very different in US than in France and Europe and are widening in differences in 2025. In the US as in this report in the WSJ China is seen as a trade partner and competitor with certain issues, many of China's university leaders and experts question the prospect of a long term alliance with Russia, and for DJT Russia is a nuclear power with which US seeks good relations and a political settlement of the Ukraine War. In France as shown in the article in Le Monde adjacent to this the European attitudes towards Russia throughout European history since 1700 of regional rivalry between France and Russia, Germany and Russia since 1900, Britain and Russia since 1700. FDR led the alliance with Russia against the Nazis and Imperial Japanese in the 1930's and 1940's. Herbert Hoover led the effort to bring relief supplies and aid to Russian in the period of the Civil War after the Bolshevik Revolution in 1917. With China America kept the government in China functioning as it retreated from the invasion by the Imperial Japanese Army in the 1930's and 1940's and the only hope with Gen. Joe Stilwell in China alongside Chinese leaders. ...

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An extraordinary moment in history took place at Rajghat Gandhiji Memorial in New Delhi on September 10, 2023. The leaders of 20 largest nations from all over the world observed a moment of silence after devotional hymns at the memorial to Mahatma Gandhi. Click on original article to pull up the larger picture and take our On the Spot Quiz on which countries were paired together on either side. On either side of Modi are Widodo (Indonesia) and Lula (Brazil), next to them either side Macron and Biden, Albanese and Sunak, EU's Michel and Leyen , Erdogan and Yeong, Fernandez and Meloni, Qiang and Kishida, Lavrov and Scholz, Sissi and Ramaphosa, Rutte and Trudeau. Can you tell which countries each pair of leaders are from? Answer below for our first On the Spot Quiz. Answer: France and US, Australia and UK, EU's pair, Turkey and South Korea, Argentina and Italy, China and Japan, Russia and Germany, Egypt and South Africa. It is an exceptionally well thought out arrangement. With Indonesia and Brazil on either side of India, you have the core of the aspiring population of 1.7 billion people more than anywhere else on the planet Earth, who think alike, act alike. And next to them are leaders of France and US, Australia and Britain, and the European Union, who are resolutely backing the shift in agenda- debt assistance, tripling renewable energy, and a new infrastructure building effort for ease of living.   ...

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After 2 years of the pandemic's devastating effects on health, governments around the world decided to protect ordinary people from the effects of higher prices for staples and food with the increase in inflation. This WSJ report takes a detailed look at different countries and how they after coping with the effects on total debt and debt servicing needs of moves such as subsidies and tax cuts. The situation is exacerbated by the Ukraine war which affects wheat exports from Ukraine and Russia, and the high oil prices as a result of the war. The effects shown by country are- China- consumers are protected from high oil prices by regulated retail gasoline prices. As oil prices keep going up state owned refineries will bear a disproportionate share of the burden of high prices. India- The government has set aside $40 billion in aid as subsidies for oil and fertilizer. This will support farmers and consumers for fiscal year to March 2023. It will make it harder to cut the budget deficit from 6.9% of GDP to 6.4%. Pakistan - A subsidy of $1.5 billion was given for diesel, gasoline and electricity by the Imran Khan government. This did not have IMF approval and talks are taking place on the IMF program between the government and IMF for it to continue. Rampant inflation has led to reduced popularity of the Imran Khan government. Argentina- A new program to refinance $44 billion in debt with IMF assistance is being affected by the subsidies for oil and electricity. About 800,000 tons of grain are being diverted to the domestic market from exports. Agricultural producers such as Argentina have better protection from higher food prices. In Argentina 40% of the people are living below poverty and the country has 50% inflation.  Malaysia and Indonesia- Both countries are exporters of commodities and higher prices could provide additional revenues to meet higher import prices, says the WSJ. Egypt- higher prices for wheat imported from Ukraine and Russia where Egypt gets 70% of its wheat needs have increased cost of subsidies by $1 billion. Kenya- Fuel subsidy costs will increase by $500 million over 2 years. Europe- In France 400 million euros relief package and in Spain 500 million euros relief package for energy price increases. In Germany cash payments to taxpayers, heavily discounted transportation tickets, and price caps on gasoline and diesel.   ...

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The Blinken Wang Yi meeting at the G-2- in Indonesia is the first high level meeting between US and China since March when the Ukraine war started. In the press briefing after the meeting Blinken said "more than four months into this brutal invasion the PRC stands by Russia." He pointed to Beijing support of Russia at the United Nations, dissemination of Russian talking points through Chinese state media and joint military exercizes with Moscow. One aspect of the relations that is beyond the control or good intentions of the two countries top diplomats is the tit for tat response that began with the presidency of Donald Trump. Trump may have seen this as a way to talk to the voter base fed up with two decades of one sided trade with China with manufacturing shipped out to China and local communities of families and workers in regions across the US losing jobs and in decline. Much of this shift was done by US companies during the Clinton, Bush and Obama administrations over two decades. The strident tone adopted by Trump was met by tit for tat responses in Chinese media till the pandemic when it assumed a new aspect of Chinese origins of the coronavirus. The result is that Sinophobia in the US is met by a response in Chinese media and in the thinking of the Chinese leadership under Jinping that now sees the relationship as having already shifted during the pandemic. The paradox in this is that the US in its effort to get other countries on its side is only beginning to make an effort of get America's own companies and large business investors on its side. Most American companies are still continuing trade and business with China as before.  The same situation exists with the shift of manufacturing from Japan and the European Union to China, with the loss of jobs and decline of local communities that depended on manufacturing. Japanese and European companies are acting in ways that are similar to American companies. Having managed the shift of manufacturing from European Union and Japan to China these companies have done little to change this business situation in 2022 carrying on as before. This is the paradox of the current situation that business both in the US and EU, and Japan is not on the side of their governments, even as their governments attitude to China, particularly now after the pandemic and the Ukraine war has shifted drastically. Alongside this is the popular opinion that has shifted gradually over the last 10 years in the US and EU, first in these very local communities that lost manufacturing to China, and then across broader sections of the public, and now across whole regions of America, Britain, the EU and Japan. This shift in popular opinion has little interest in the way business conducts business overseas or governments conduct diplomacy in nuanced statements. As a result neither the governments of the US, EU and Japan or the business of the US, EU and Japan are in control of this shifting situation that has its momentum and pace operating quite independently of governments and business. And public opinion across America, Europe, Japan, and also in India is moving in an entirely new direction.     ...

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There is a sense of cognitive dissonance in the states of former East Germany, known as the GDR or German Democratic Republic in the Soviet Union period from 1950's to 1990. The 5 states that formed the GDR continued to build close ties with Russia after the fall of the Berlin Wall, in the perception that this would build good long term relations. The crisis in Ukraine with border states of the Soviet Union opting in favor of close ties with the European Union and not Russia have disrupted the economic relations between the Federal Republic of Germany and Russia. As long as Russia needed the economic ties to build its economy and standard of living the political issues posed by NATO expansion and EU expansion were set aside by Putin and political parties within Russia. The very ties that were supposed to usher in an era of peace in Europe helped strengthen the Russian and Chinese economies. Leading to a point where these two economies were strong enough by 2021 in the midst of the waning pandemic to  assert themselves on political issues where serious differences existed such as expansion of NATO and Taiwan. When the economic relations such as making China a manufacturing powerhouse  was the path taken by American and European business in 1990's, business interests were focused on the declining quality and high wages demanded by unions and workers in the US and Germany. This could be personally witnessed at Apple's factory in Colorado Springs where quality was failing badly in the 1990's. Apple when Steve Jobs returned in 1997 adopted a China manufacturing strategy when its manufacturing operations in the US failed to deliver the quality and cost structure needed for it to expand. The high margins with low costs of manufacturing in China was the strategy adopted by Steve Jobs to compete with Microsoft and turbocharge its expansion. Soon other companies followed. A similar process happened in economic ties with Russia on a smaller scale. Two decades of such expansion whittled down American manufacturing, hurt American workers, hurt European manufacturing and European workers.  This process could not continue- yellow vest protests in France, the protest vote in US midwestern states in recent elections, the protest votes in German elections and fragmentation of parties, made this clear. The US imposed trade tariffs on Chinese products and moved to restrict flow of technologies to China under the Trump administration, accelerated by the Biden administration. President Xi was once of the view that China's ties with the US were important "thousand fold" in the period as late as 2010. Yet this lopsided trade relationship was not beneficial to American workers or American interests as a technologically advanced leader. It is true that American workers and engineers at Apple had failed to ensure American quality competitiveness in the 1980's into 1990's, yet no advanced country or its business can come up with a false narrative that cedes its manufacturing leadership and jobs for the working class of its country. That false narrative is being challenged today by Mr. Biden, Mr. Scholz, and all American and German political parties, and by Mr. Modi with Atman Nirbhar Bharat for local manufacturing. The integration one sees of the port of Hamburg as Chinese export hub with China's economy is one aspect of what has happened. A new leadership is taking its place in Europe and in America that sees clearly the false narrative. The visit of the new Danish prime minister to India is the beginning of the effort to set up a new logistics relationship with South and South East Asia, as Denmark's Maersk is a world leader in shipping logistics for exports and manufacturing. The planned Noida logistics center outside of New Delhi under Gati Shakti integrated development is part of the change happening today as a new supply chain is being built. The unwinding of the one sided trade relationship with China, and its related relationship on energy with Russia, led to the changing perception in Russia and China of the value of the relationship. Political relations superseded economic and cultural relations during Putin's second phase and Xi's second phase with assertive attitudes on NATO, and on Hong Kong, Taiwan under Xi and Putin 2.0. As could be expected Germany and the US were caught flat footed as leaders who were cast in the mold of Putin as a Soviet representative in Dresden, and Xi with his father leading the Communist struggle in the 1930's and 1940's against Chiangkaishek, acted in ways that reflected the Soviet period. Chiang left for Taiwan in 1948 when Mao-tse-tung setup the People's Republic of China. Taiwan and Hong Kong remained important in the perceptions of Xi 2.0, in the effort to build "China Dream" and erase last vestiges of what in Soviet times were seen as western colonialism. US and EU particularly Business and the new IT telecom Business failed to grasp these matters, and historical events such as the opium wars of the 1850's. Business and cultural interests lacked both the inclination to learn and the knowledge of these events in Chinese history and its relations with colonial powers Britain and Japan, and also Russia. In 1900 the Boxer rebellion against ceding Chinese ports to colonial powers Britain, Japan, Russia, ended with permanent colonial settlements in Hong Kong, Shanghai, Tsingtao, other Chinese ports. Chinese rejuvenation in the mind of leaders such as Xi from the second generation of Communist leadership, means putting this behind, leading to the action taken in Hong Kong. In some ways as some observers have commented it is as much a problem of the sluggishness of American and European thinking, particularly business interests including in Taiwan, post British Hong Kong, and ignorance of recent Chinese history which was mistakenly thought not to exist or forgotten. This is as much of a problem as the action taken by Putin and moves by Xi Jinping. The great democracies such as India, Indonesia, Bangladesh, were ignored as American and European business interests integrated the American and German economies with China's. In terms of population the population of these regions and related parts of South East Asia such as Malaysia and Vietnam which have a shared cultural history is about 1.5 times the population of China. Travelling through the parts of India's largest state Uttar Pradesh, an Madhya Pradesh one finds how much American and European business interests have failed both their own interests, their own workers and failed the great democracies of the world, by not only not investing in the democracies of Asia, and also of Africa and Latin America and bought into a narrative of China which no longer holds true and may never have been true all along. This is starkly evident in a once in a century pandemic in these great democracies of the world. These democracies have been left to fend for themselves during the pandemic and their leaders facing false narratives in the media such as the BBC and American media outlets even on issues such as vaccination of the largest part of the world's people.           ...

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Joe Parkinson of the WSJ gives a in-depth account of the emergence of Recep Tayyip Erdogan in Turkey's politics, with contributions by Emre Peker, Ayla Albayrak, Yeliz Candemir. Erdogan grew up in a poor neighborhood of Istanbul, and became the head of a local youth branch of the Islamist National Salvation Party in 1976 after an adolescent period steeped in mosque culture and Islamic ideas. In 1994 he is elected Mayor of Istanbul amid voter discontent with corruption and problems with infrastructure and public services. He served for four years making improvements. After reciting a poem publicly that said "the mosques are our barracks, domes our helmets, minarets our bayonets and faithful our soldiers," he is jailed for 4 months by a military backed secular government in 1999. During this period Erdogan, described by friends from his youth as having a unique ability to adapt to difficult situations, makes a transformation. He moves to the centre, coming out in favor of stronger ties to the EU, and works hard to attract support from the secular and nationalist voters to add to his conservative religious base. In 2003 he is elected prime minister as head of the Justice and Development Party. This begins a period of ten years in which Turkey sees remarkable period of economic growth during which Turkey's GNP nearly quadruples from a little over $200 billion in 2002 to $794.5 billion in 2012, according to the IMF. It may be partly coincidence and partly good management of the economy under Erdogan. Turkey's previous banking and currency crises before 2003 created a better understanding and discipline for managing the economy. Emerging markets such as Brazil, India, China, Russia, Indonesia, and other parts of Asia and Latin America were able to achieve high rates of growth during this 10 year period. Competitiveness in Brazil and Turkey has not improved significantly in this period according to experts, and large capital inflows into Turkey partly supported the credit boom in Turkey. And just as growth is slowing significantly in all emerging markets, Turkey under Erdogan faces a new test. Especially now that Erdogan is seen as autocratic in his effort to suppress protests to build an Ottoman era army barracks in Taksim Square, Istanbul. The fears of secularists in Turkey are that this is the Erdogan of the period in 1999, after serving as Mayor of Istanbul. Just as Turks turned away from the overreaching actions of the military, the public sentiment may be shifting beyond the overreaching actions of the religious parties in Turkish politics. The protests in Brazil against the Rouseff administration after the popularity of the Lula administration, show that slowing economic growth and missteps by the elected government can alienate younger voters. The parties still retain a majority but face an uncertain future in which lower economic growth and missteps lead to a search for alternatives. At the same time Turkey's efforts for accession to the EU are beng put on hold as Germany opposes the actions to suppress protests of the Justice Party in Turkey. ...

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This editorial in the New York Times points out that the new president of the ANC party -that runs South Africa and has a monopoly of power in the post Apartheid years, under Mandela, Mbeki and Zuma- faces a uphill task as the ANC remains deeply divided after supporting Mr. Zuma in office till the very end. Apart from the stagnant economy, there are challenges the ANC faces in the lethargy of the post Apartheid years, and the culture of corruption, and patronage management that led to mismanagement of state enterprises.

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Speaking at a banking conference, advisors including the head of Russia's largest retail bank Sberbank, German Gref, minister of the economy, Aleksei Ulyukayev, and head of the central bank , Elvira Nabiullina, express deep concern about the economic prospects in 2015. Foreign investment is down from about $90 billion in the 1st quarter of 2013 to a negligible amount in the 3rd quarter of 2014. Capital outflows following the Ukraine crisis are estimated at about $110 billion by former finance minister Alexsei Kudrin. The ruble dropped to its lowest level against the dollar since the 1990's. And the sharp decline in oil prices with Brent crude at about $90 is another risk factor as 50% of the budget comes from oil and gas revenues and 60% of exports are still oil and gas, with no serious or effective effort to diversify under the Putin adminstration. Putin told the banking conference that a deficit free budget and reserves of $460 billion are "fundamental factors supporting stability." Advisors and leading bankers remain unconvinced. The problem is that even at the beginning of 2014 before the Ukraine crisis foreign investment had slowed to a trickle, similiar to what India experienced in 2013. The central bank head says her effort to open up the bond markets in Russia to foreign investors is now in vain because there are few foreign investors. Instead of reversing the situation as is happening in India with the new Modi administration, policy under Putin and the Ukraine conflict may have scared investors away with the increasing western sanctions and stagflation (estimated 8% inflation and about 0.5% growth in 2014). The head of Sberbank Mr. Gref told the banking conference- "The Soviet Union broke apart because of the mind boggling incompetence of the Soviet leadership. They did not respect the laws of economic development." The problem with sovereign reserves is that it can protect a sovereign currency such the Russian ruble or the Brazilian cruzeiro to some extent, but today's vibrant economies need foreign investment and foreign technology for growth. Even a country such as China with a trillion dollars in reserves needs the reserves in its special case because of its billion plus aging population, and is no exception to these laws of economic development about the need for foreign technology and foreign investment. ...

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A major shift in foreign investment may be taking place as the 2014 St. Petersburg International Economic Forum takes place in May 2014. Russian policy in Ukraine and tensions with the U.S. and Germany could lead to a shift in investment to other emerging market countries. China's tensions with Japan could lead to a similiar shift of Japanese foreign investment. At the same time India has elected a new government with an absolute majority and an overwhelming mandate from young people to accelerate development. The new government under the BJP party's Modi has a decade of experience attracting foreign investment in western India. Indonesia, Vietnam, Africa and other emerging market countries, could benefit from the shift in investment. Investment could also return to the home countries with lower labor costs in Southern Europe, lower labor/energy/transport costs in North America. For Russia the debate at the St Petersburg Economic Forum was about pursuing one of three policy paths with some riskier than others, or some combination also risky and uncertain- depending on state banks and oil windfall funds, increasing ties with Asian countries, continuing on the current path with lower foreign investment and continued capital outflows. The failure to use the time wisely to diversify the oil based economy which could have been better accomplished in an economy not overly dependent on crony capitalism and centralized economy, both current characteristics, will affect future progress. A key weakness for Russia compared to China is the centralization under one person Putin, more so in the third term. In China the two man team Keqiang and Jinping is part of a larger team chosen by consensus and negotiation and part of a rotational scheme. It has senior leaders who initiated the changes to a market driven economy in the nineties determined to see China on track....

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Kenneth Rogoff, Harvard University economist, author of the well researched book on the 2008 financial crisis, "This Time Is Different," gives his thoughts on the economic prospects for the U.S under the new Trump administration. He says 4% GDP growth and 3% inflation is possible temporarily for a while with stimulus policies, less regulation, and increased private investment. After 8 years of not investing in much needed infrastructure because of concerns about the deficit, the timing is right for such investments, especially as the economic effects of the crisis of 2008 gradually fade.  This is about taking advantage of ultra low interest rates to invest in infrastructure. He says it helps that Trump policies are pro-business. He sees drawbacks as the stimulus program adds a 25% increase with extra debt, adding $5 trillion over 10 years, but adds that for many years Nobel prize winning economist Krugman and others have said that there is good reason to increase borrowing to invest, and this is now being tried. Inflation remains an uncertainty- if there are large quantities of underutilized and unemployed resources it would raise prices less than its effect to increase output. The reverse would apply if the U.S. economy is closer to full capacity. One factor that would help- increasing confidence for business and increasing investment. Against this what he calls optimistic view or spin, is the idea of mistakes under a Trump administration, errors made and a degree of incompetence which he says is a real possibility. Overall his view is that some risks are appropriate now, and from his deep study of financial crises sees the slow growth of the last 8 years a result of a financial crisis that now begins to fade, creating the possibility of higher growth under prudent policies.  ...

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China's GDP growth accelerated slightly to 6.9 percent in the 1st quarter of 2017, after five consecutive quarters of GDP growth at 6.7-6.8%, according to government data. This reflected larger use of steel in the construction industry and more mortgages issued by the state controlled banking sector. Government officials say productivity is improving helping GDP growth, with closing of less efficient manufacturing plants. Industrial production increased 7.6% in March 2017, according to the National Bureau of Statistics. The government is trying to control higher lending and reduce the backlog of bad loans at banks. Higher growth helps to reduce the bad loans at banks from the earlier period after 2008 financial crisis, improving financial stability.

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Strikers at a Honda transmission factory in Hoshan, 100 miles northwest of Hong Kong are asking for raises of $117 or 800 renminbi in cash above the $132 a month or 900 renminbi that they are now paid. About 950 of 1900 workers at the plant are trainees, young people from vocational schools or high schools earn $132 a month. Older employees earn upto 1500 renminbi or $220 a month. The significance of this strike is that the Chinese government is tacitly encouraging the strike as it begins making moves to increase domestic consumption and make the economy less dependent on exports. This requires consumer's having larger purchasing power and higher wages. It also means that China will not remain the low cost manufacturer for manufacture goods makers around the world for very long. Consider the size of the increase and the policy change of the government and this implies a significant shift by China.

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Uki Goni writes from Buenos Aires, Argentina, describing the chaos and poverty of the years 2001-2003 following Argentina's default on its debt. At one point half of the population was below the poverty line. Argentina eventually recovered in 2004 under a new government of Nestor Kirchner, but had already incurred a terrible cost. This was especially hard on the lower middle class who had only their savings to live on and could not access their accounts at banks which were closed. Barter stores were common in those days as the barter currency gained wide usage for exchange of services. It is not clear whether this was due to badly implemented economic policy or defaulting on the debt. Goni says Greeks should seriously consider the cost of such a steep decline in the economy as they consider exit from the eurozone, and carefully evaluate the policies of Syriza politicians who risk a break with the EU.

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Individual investors reacted strongly to declining prospects for emerging markets with slowing growth, depreciating currencies, corruption and political uncertainty in 2013. As of the beginning of June, retail investors pulled $18.1 billion from emerging market bond funds, about one third of the amount that went in to emerging markets since the financial crisis in 2007, according to fund tracker EPFR Global. Institutional investors have pulled out less, about $9.3 billion, or 10% of their investments in emerging markets bonds since 2007. A similiar pattern is seen for investment in the stock markets of emerging market countries. The U.S. Federal Reserve's monetary expansion helped pull more money into emerging markets such as India, Indonesia, Brazil and Turkey. As the Fed shifts away from these policies in 2013 emerging market countries have large current account deficits and less money to finance imports and debt.

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Moody's Investor's Service downgrades China's credit rating to A1 from Aa3. Moody's predicts a slowdown in growth for China. GDP growth for 1st quarter 2017 was 6.9%. Total debt has grown from 149% of gross domestic product in 2008, to 213% in 2013, and is now 253%, according to JP Morgan. The problem is that ever higher levels of credit have supported growth and more of this is coming from the shadow banking sector. Higher levels of debt in future years from the already high levels will weigh heavily on growth, leading to an eventual slowdown in the economy's growth rate.

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This editorial in the WSJ says Obama's silence when it comes to the jailed opposition leader in Malaysia is one more silence when it comes to issues related to suppression of democratic freedoms. When this issue was raised in June the WSJ reports it drew the Obama comment: "democracy is hard." This is all the more astounding now says the Journal, after the WSJ report about corruption in the Najib Razak government related to the $700 million from a state owned investment bank. This editorial says about the record of the Obama administration on going silent when issues of freedom and suppression have come up from Iran in 2009 to many other events and Malaysia today- that this is one of the most puzzling aspects of the Obama presidency. It also points out this is is one of the most discouraging aspects of how the U.S. is seen in the world under the Obama presidency, when it comes to protecting freedom and freedom of speech and expression.