Expert opinion

The US is waging economic war against Russia, and a real war was narrowly avoided as the US was careful not to strike Russian installations in Syria in the most […]

The US trade deficit in February 2018 increased to US$ 57.6 billion according to the Commerce Department.  The US trade gap in 2017 was US$ 566 billion. Economic logic would […]

The opening of the Shanghai oil futures Exchange on 26th March 2018 has been commented on by various market observers. Some think that US dollar dominance in global finance will […]

The geopolitical tension between Saudi Arabia and Iran is reflected in the oil market and has repercussions on China, which imports about 16% of its oil from Saudi Arabia. It remains to be seen how Saudi oil sales to China will be handled. Oil futures in yuan will be in direct competition with oil futures in US dollars when it is a question of oil destined for China.

More and more very well-informed people foresee market turbulence if not in 2018 then certainly in 2019.

US President Donald Trump has experience with bankruptcy and finding financing to make a recovery. This will stand him in good stead as the financial situation of the federal government worsens. As the US dollar is the major global reserve currency, it is imperative for the US to avoid defaulting.

Congress has voted to spend 300 billion more. Adding this to the projected budget deficit, the Treasury is going to have to find about one trillion more to finance expenses.

US debt is now at 21.6 trillion with a foreseeable budget deficit of around 650 billion. Add to that a negative trade balance of 798 billion, of which 376 billion is with China alone (US Debt Clock). It would be counterproductive for the Chinese to bring about a rapid depreciation of the dollar as they would be damaging themselves.