SingPost shares tumble nearly 11% after sacking 3 senior executives

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The most recent development comes as SingPost goes through a proper evaluation that was first conducted in July 2023. Earlier this month, it had announced the sale of its Australian business&nbsp, for a cash consideration of A$ 775.9 million ( US$ 504.1 million ).

A shareholder vote is expected to be held at a major shareholder gathering in the first half of the time, allowing the price to bring in a$ 312.1 million ( US$ 232.1 million ) gain. &nbsp,

According to OCBC’s Investment Research, it is unclear whether the company’s top executives ‘ dismissal “would have any impact on the deal.”

In a study statement released on Monday afternoon, OCBC’s capital research analyst Ada Lim stated that” we maintain our hold” rating while awaiting further clarity on its future growth engine, backed by a stronger balance sheet and greater economic flexibility.” We have been a major growth driver for SingPost in recent years.

Ms. Lim also increased her equity risk premium assumption by 50 basis points to 5.5 % to reflect “more corporate governance challenges and uncertainty” without “further color on the company’s strategic growth route going forwards.” Equity risk premium is used to determine the fund’s risk-reward trade-off.

Mr. Seet said he anticipates the board of the company to good proceed with the plan to review and divest non-core assets, which will help SingPost become more asset-light, boost its cash position, pare down debt, and be able to raise its shareholder returns.

The board’s decision to review and market non-core resources led to the end-game, according to the researcher.

Additionally, Mr. Seet said that the colony that SingPost paid to the impacted customer in this case was “immaterial.”

According to the reporting statement SingPost received, the global business unit of SingPost had manually entered a number of delivery status codes. These were for global shipping packages that the business had agreed to deliver through a deal with one of its biggest clients.

These human entries reportedly were made without any justification or supporting paperwork in an effort to avoid legal repercussions under the agreement. &nbsp,

Following its domestic studies, SingPost said it informed the user about the event. A colony has been reached between the parties, which includes paying a settlement amount.

The firm, in its statement on Sunday, said the lawsuit “is not expected to have a stuff effect” on the company’s online tangible assets or earnings per share for the latest financial year. &nbsp, Moreover, its enterprise with the client “has not been significantly affected and the lease has since been renewed following the arrangement”, it said.

This is very important for owners because it means that the company is unaffected and that this event won’t have any ramifications or negative effects on the company,” said Mr. Seet.

While SingPost stocks will likely experience” some failure” ahead, the Maybank analyst believes that the most recent advancement may only represent a temporary “road knock” as he continues to hold onto his “buy” call for the inventory.

Koh Wan Ting provided further monitoring.

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All the power in God-Emperor Elon Musk’s hands – Asia Times

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The US social structure was &nbsp, designed by its founders&nbsp, to have a system of checks and balances, so that no individual or organization would have total energy.

But that system was designed with only&nbsp, government&nbsp, leaders and&nbsp, government&nbsp, institutions in brain — although the founders did care about private individuals controlling the authorities, this wasn’t their primary focus, and they eventually ended up declining to throw institutions in place precisely to guard against financial power. &nbsp,

James Madison believed, for instance, that the governmental system of the US state was protection much against little cabals of rich oligarchs. In recent years, especially in the wake of the Supreme Court ‘s&nbsp, Citizens United&nbsp, choice, some have voiced concerns that the US has become an elite, where wealthy people are capable of buying power and influence — either by plan efforts, lobbying, or other means.

These issues came mostly from the liberal left, who&nbsp, generally claimed&nbsp, that the US has become an aristocracy. However, many on the right were also concerned about George Soros and other democratic entrepreneurs ‘ effect.

But the studies backing up the “oligarchy” state was &nbsp, very uneven and weak&nbsp, — in reality, most political researchers found that coverage in the US tends to connect strongly with the objectives of the center class. And common problem was vague and scattered — Americans will tell you that their financial program “unfairly favors the strong interests”, but this could mean something, and most Americans&nbsp, are no concerned&nbsp, about the prosperity of billionaires.

Yet in the past week, we have witnessed a single wealthy man making important decisions in real time regarding US national government policy. In order for the US federal government to spend money, it has to pass “appropriations” bills. There are always big fights over those bills, so sometimes they just pass a” continuing resolution” to keep spending going.

If the CR doesn’t pass, the government shuts down, and its employees— including the people in the US Military — stop getting paychecks. In a number of instances over the past three decades, the party in charge has threatened to refuse to pass a bill and impose austerity on the government, or worse, to exceed the “debt ceiling,” which prevents the government from borrowing money.

Elon Musk, president Trump’s most significant donor and political ally, and the owner of one of the largest social media networks, had a different take on the most recent CR. Musk&nbsp, launched an all-out attack&nbsp, on the resolution:

Musk, who&nbsp, spent more than US$ 250 million &nbsp, getting Trump elected, posted about his opposition to the original spending deal well over 100 times over the past two days, with threats to fund primary challenges to anyone who voted for the plan, which was six weeks in the making.

Any member of the House or Senate who supports this outrageous spending bill should be re-elected in two years! Musk was posted on X on Wednesday afternoon.

Later in the day, Trump himself&nbsp, came out against it, making it clear the bill was done.

What’s interesting about this is that&nbsp, everyone&nbsp, seems to&nbsp, agree&nbsp, that it was Musk, not Trump, who torpedoed the CR. &nbsp, Fox News reports:

After Elon Musk and Vivek Ramaswamy allegedly engaged in congressional discussions regarding government funding, some House Republicans are privately expressing their anger.

If Elon and Vivek are freelancing and shooting off the hip without working with [President-elect Trump], according to a second GOP lawmaker, they are getting dangerously close to undermining the actual 47th President of the United States.

Overheated rhetoric is common, so we shouldn’t take this as gospel. And it’s also worth noting that Musk&nbsp, approved&nbsp, of a modified CR, but that one was torpedoed by conservatives in Congress. Also, &nbsp, Musk’s threat&nbsp, to primary anyone in Congress who voted against the approval of Matt Gaetz wasn’t enough to keep Gaetz from withdrawing. So Musk actually isn’t the all-powerful emperor he’s depicted as in the header image of this post — at least, not yet.

But it’s undeniable that Musk has influence that goes far beyond that of any typical super-rich political influencer. He’s not just the owner of X but its poster-in-chief, who manipulates the platform’s algorithm to&nbsp, show everyone his own tweets&nbsp, first and foremost.

Additionally, he is the owner of SpaceX, which the US government largely depends on for its entire space program. And he’s more or less the leader of&nbsp, a right-wing faction in the tech industry &nbsp, that has become a key Republican constituency over the last election cycle.

Therefore, Musk has a lot of extremely powerful tools for directly influencing American policies. He has the authority to threaten to primary any Republican who deviates from his personal goals ( and frequently does ). He has the power to launch right-wing instant mobs on X to attack any Republican who floutes his rules.

He can ( and does ) dump hundreds of millions into elections. He could probably use SpaceX’s government contracts as leverage as well, if he chose. And with Donald Trump, the oldest President ever elected, clearly in his final years, Elon’s energy and activity level frequently make him the ideal stand-in.

It’s clear to both foreign and domestic leaders where the power is in the incoming U.S. regime, but this isn’t just supposition on my part. House Speaker Mike Johnson&nbsp, called up both Trump and Musk&nbsp, to try to get a CR passed. And Musk now&nbsp, regularly accompanies Trump&nbsp, to his meetings with foreign heads of state. The American public as a whole is now accepting this reality after watching Musk kill the continuing resolution.

What does it mean for the nation to have so much of the government’s power firmly rooted in the hands of a single, unelected private individual? It’s hard to say.

There may be some historical precedents here, as Mark Hanna had a significant influence in the McKinley administration and William Randolph Hearst’s control of the print media terrified politicians over a century ago. Various industrial-age tycoons wielded a lot of influence in the late 19th and early 20th centuries. Fox News was created by Rupert Murdoch. But Musk’s clout may eclipse them all — X is a new kind of media, Trump is a different kind of President, and so on.

Many in the tech sector I know are enthralled by Elon’s authority. But I believe that this is scary for many regular Americans because they won’t be able to trust Elon to do the right thing, as many other tech professionals do. To see this, let’s do a thought exercise: What if Elon were evil?

Imagining” Evil Elon”

In a post back in October, I wrote that America’s future could hinge on whether Elon Musk decides to play the superhero or the supervillain.

Musk’s friends and confidantes expect the former. They probably know him as a reasonable guy — a&nbsp, Reaganite&nbsp, conservative who was &nbsp, driven to the center-right&nbsp, by the excesses of wokeness, who loves&nbsp, free speech&nbsp, and free enterprise and small government and responsible fiscal and monetary policy and&nbsp, peace between nations, who wants to bring human civilization to Mars and accelerate tech progress and so on.

Let’s refer to this variation of Elon as” Real Elon.”

However, one might also think of Elon, who lives in the fervent imaginations of his foes. Let us call this” Evil Elon”. Regular people, observing Elon’s actions in the public sphere, can’t always tell the difference between Real Elon and this fantasy supervillain.

Whereas Real Elon opposed the CR because of concerns over government spending and legislative complexity, Evil Elon opposed it because it contained national security provisions that&nbsp, would have nixed&nbsp, some of Tesla ‘s&nbsp, planned investments in China:

Cynics note&nbsp that Elon supported’s shorter replacement CR would have actually spent more money than the one Elon killed, with the main difference being that the replacement CR didn’t have restrictions on US investment in China:

Real Elon is a consistent and dedicated ally of the Chinese Communist Party, despite his admiration for individual freedoms and capitalism. When Real Elon calls for Taiwan to become a” special administrative zone” of China, he does it because he likes authoritarian rule and because the Chinese Communist Party has paid him off. Evil Elon does it because he wants to avoid World War 3.

On Ukraine, similar, Real Elon&nbsp, just wants to end the conflict&nbsp, and stop more Ukrainians from dying. After all, Russia is strong and determined enough to almost certainly hold onto a piece of Ukraine at the end of the conflict. So why not just trade land for peace and be done with it?

However, Evil Elon, who shares his sympathies with authoritarian rulers in general, wants Putin to succeed. No one is aware of what Elon and Putin discussed in their frequent conversations since 2022. However, Evil Elon’s supporters believe they conspired to smuggle the Russians into the conflict.

Real Elon and Real Elon both accused Vindman of treason and threatened him with” the appropriate penalty” because we all get upset on social media and like to rippling people who criticize us. However, Vindman was right when Evil Elon did it.

When Real Elon&nbsp, declared his support&nbsp, for the German far-right party AfD, it was because he saw Germany spinning into&nbsp, industrial decline&nbsp, and suffering from an immigration policy that failed to exclude&nbsp, violent criminals. But Evil Elon did it because he likes that AfD is&nbsp, vocally pro-Putin&nbsp, and&nbsp, pro-CCP.

In fact, believers in Evil Elon suspect that his support for AfD might also be due to the whiff of&nbsp, Nazi apologia&nbsp, and&nbsp, antisemitism&nbsp, that hang around some of the party’s candidates. Real Elon is a stand-up guy — when he agreed with a tweet about Jewish communities pushing anti-White hatred, he&nbsp, publicly apologized, declaring it the worst tweet he’s ever done, and declaring himself a “philosemite”. And when Real Elon accidentally endorsed a Tucker Carlson interview with a Hitler apologist, he&nbsp, quickly deleted the endorsement&nbsp, once he realized what it actually contained.

However, those who believe in Evil Elon believe that these are just the kind of public relations stunts a supervillain would employ to cover his tracks. They worry that the massive wave of antisemitism that has swept X&nbsp since Elon took control is the result of deliberate boosting rather than just the unavoidable result of more indulgent moderation policies combined with the response to the Gaza war. 1&nbsp, They do not buy&nbsp, Real Elon’s protests&nbsp, that other platforms have even more antisemitism.

And so on. Essentially, Evil Elon is a somewhat cartoonish supervillain, who wants to set himself up as the ruler of one of three great dictatorships, ruling the world with an iron fist alongside his allies Xi Jinping and Vladimir Putin — a new&nbsp, Metternich System&nbsp, to enshrine right-wing values and crack down on wokeness and progressivism and obstreperous minorities all over the world.

I had Grok draw this new Metternich System for fun, and the end result was pretty good. I feel like I have to share it:

Art by Grok

But anyway, the point here is that when normal Americans look at Elon and his words and deeds, they can’t be 100 % certain that he ‘s&nbsp, not&nbsp, Evil Elon. A few progressives will be very convinced that he&nbsp, is&nbsp, actually evil, but I think most people will simply wonder and be uneasy. Evil Elon will continue to exist in a sort of quantum superposition with Real Elon in their minds — a Schrödinger’s oligarch who will&nbsp, probably&nbsp, turn out to have been a good guy all along, but&nbsp, might&nbsp, ultimately turn out to have been very bad from day 1.

And that will scare them. In fact, all powerful people have this same property— even some of the people who voted for them didn’t entirely trust Bill Clinton, George Bush, Barack Obama, and so on. &nbsp, Powerful people are simply inherently untrustworthy, because the consequences of misplacing your trust in them are so grave.

There have been checks and balances on these leaders for the majority of modern American history, which means that if they did prove to be bad, there would be plenty of institutions and opponents in place to limit the damage.

So who or what can check Elon’s power?

One flaw of the US political system, as I mentioned at the beginning of this post, is that there are few mechanisms in place to restrict the political influence of private actors. This is why some people worry about the U. S. becoming an oligarchy, especially in the years after&nbsp, Citizens United.

Up until now, I believe those worries have been unfounded because powerful figures like the Kochs, Soros, and Murdoch have, of course, had a hand in politics and some sort of canceled out each other. But in the age of X, SpaceX, and Trump, we may be looking at a very different situation.

Musk is a singular figure because he has already demonstrated himself to be the one who can create large, successful new high-tech manufacturing companies in the United States. He might also prove himself to be the one who can successfully convert a vast fortune and a corporate empire into effective dominance of US politics.

So who or what could balance out Elon’s power? Prior to his primary threats and online assaults, Congress appears prostrate. Trump may have fired and denounced him in 2017 as he did Steve Bannon, but that Trump has long since passed away. This Trump is aging, bedeviled, and abandoned by many of his former allies. Democrats are still dealing with the collapse of 2010s-era progressivism, and in a few days they will control zero branches of the federal government.

It’s possible that a bunch of&nbsp, other super-rich people&nbsp, will unite to balance out Musk. Although the idea of needing oligarchs to stop other oligarchs is not particularly appealing, it might be preferable. So far, though, even super-rich people who have had rivalries with Musk in the past&nbsp, seem inclined to bend the knee&nbsp, and live as best they can under the new regime.

What about the press? Traditional media — newspapers, TV, and radio — has declined steeply, &nbsp, replaced by social media. Musk&nbsp, owns one of America’s main news platforms&nbsp, ( and a second one, TikTok, is&nbsp, effectively controlled by the CCP). Meanwhile, more progressive media outlets still seem to be in a state of paralysis over conflicts with their activist staffers and their subscribers over Gaza, trans issues, and general election-related recriminations.

Ultimately, of course, power resides with the American people. Musk’s power comes from his ownership of capital, but the way he exercises it is fundamentally a&nbsp, democratic&nbsp, one — if he’s able to primary Congressional Republicans, it’s because his primary challengers are able to win votes, and if he’s able to start a rage-mob on X, it’s because people like what he says.

This means that if enough people get tired of Musk’s attempts to influence American politics, he’ll lose his influence. X is somewhat influential, but even with Musk’s algorithmic changes, it’s not a mind-control device, and it’s also&nbsp, <a href="https://mashable.com/article/elon-musk-x-declining-user-base-2025″>not actually that widely used. Musk is America’s most successful and successful entrepreneur, but even the most successful of men is powerless if he is turned down by the populace. 2&nbsp,

The fracas over the CR this week have a chance of alienating Musk because the American public has never liked shutdown brinksmanship. If Elon pulls a few more stunts, Trump’s second term could be defined by a protracted backlash against his overreach.

Vox populi, vox dei, as they say.

Notes

1. In reality, I have a third theory that claims that Russian and Chinese bots are the primary culprits of antisemitism in order to wedge American society. Right after the election, I’ve noticed that antisemitism largely vanished. This could have been attributable to an Elon crackdown.

2. I wouldn’t bet on it, though, but a few techlords might one day be able to use AI to rule the world in defiance of the vast majority of humanity.

This&nbsp, article&nbsp, was first published on Noah Smith’s Noahpinion&nbsp, Substack and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

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Thai economy ‘most tiresome’ thing in 2024: poll

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PUBLISHED: 22 Dec 2024 at 11: 37

Shoppers walk past food stalls and eateries at Wang Lang market located opposite Siriraj Hospital in Bangkok. (Bangkok Post file photo)
At the Wang Lang business, which is directly opposite Siriraj Hospital in Bangkok, customers pass foods vendors and restaurant. ( Bangkok Post file photo )

According to a study conducted by the National Institute of Development Administration, or Nida Poll, the majority of Thai people said that while financial, hacking, and political issues were the top three issues facing them in 2024, they were content with their lives overall.

The study sought to find out what people thought of” Things that you felt fed up with in 2024″ in the general. The comments were as follows:

• 52.14 percent of respondents chose financial issues that had adverse effects on their earnings and well-being.

• 28.09 % threats, such as name center schemes and hacking

• 27.86 % political disorder both inside and outside parliament

• 21.60 % the spread of illicit drugs

• 14.89 % energy prices

• 13.59 % economic problems and tragedies

• 13.44 % health problems and diseases &nbsp,

• 12.98 % crimes and public health

• 12.90 % prices of agricultural produce

• 12.75 % said they had nothing to feel exhausted of

• 11.45 % social conflicts

• 9.85 % corruption from top down

• 9.69 % traffic congestion

• 5.57 % discrimination in the justice method &nbsp,

• 4.81 % wrong offers and reshuffles in government

• 2.06 % conflict and global political problems

When asked to rate their joy in 2024, the responses were as follows:

• 39.92 percent of respondents said they were generally content with their lives, including their jobs, and families; they also said they didn’t face difficulties. &nbsp, &nbsp,

• 32.52 percent were largely unsatisfied with their finances as a result of rising life expenses and feeling uneasy about their local political climate.

• 18.1 % very happy because everything in life went smoothly, they were in good health, and they didn’t have any worries. &nbsp,

9.39 % were completely unhappy because they had higher loan as a result of economic weakness, and their way of life was hard and did not go as planned.

1, 310 people aged 18 and over in various levels of education and employment were sampled throughout the state for the December 16 to December 2018 surveys. &nbsp,

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Honda and Nissan merger talks: What’s at stake

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Nissan and Japanese automaker Honda will officially begin discussions on a acquisition to increase their standing in the field of electric vehicles, where Chinese brands are vying for supremacy. At the same time, Chinese technology behemoth Foxconn has approached France’s Renault to get its huge interest in Nissan, according toContinue Reading

Citi Bank projects 3.2% GDP growth

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In 2025, assets are anticipated to increase significantly.

Tourism, which is a major contributor to rise, will continue to be a major driver of progress in Citi Thailand until 2025, thanks to private assets from both the public and private businesses.

The bank projects that Thailand’s GDP growth will reach 3.2 % in 2025, up from the 2.7 % forecast for 2024.

At the Bangkok Post Dinner Speak 2024, Nalin Chutchotitham, Director– Thailand and Philippines Economist, said that this optimistic outlook is influenced by a number of factors, most notably the ongoing support from governmental budget disbursements this year, which will help maintain economic momentum into the coming year.

With this scenario, the bank projects Thailand’s private investment growth rate to be 4.4 % in 2025, a significant recovery from the 1.8 % contraction forecast for 2024. The Board of Investment ( BoI )’s approval of investment applications between 2023 and 2024 is anticipated to contribute to the higher growth.

” Thailand’s expense outlook does present forward momentum. The value of BoI-approved investments in 2023 and the first three quarters of 2024 remains powerful, supporting further recognized investments, especially in online sectors such as data centres, energy vehicle-related industries, and electronics”, Ms Nalin said.

Public investment growth is also expected to rise to 2.9 % next year, compared to 1.6 % this year. This follows delayed resources payouts in 2023–2024, which postponed system job opportunities. However, with the 2025 governmental budget approved on deadline, investment is expected to ramp up next year.

Meanwhile, government consumption is projected to grow by 3.1 % in 2025, up from 2.7 % this year, while private consumption growth is expected to slow to 3.5 % from 4.4 %. Although personal consumption has rebounded, Ms. Nalin said the treatment has been disjointed across all industries.

Solid jobs in the service industry continues to support home income and spending, according to Ms. Nalin. However, the production industry, especially car, remains affected by the unequal recovery, leading to slow car sales amid the country’s great household debt.

She added that the tourism industry will continue to be a key driver of economic growth following year, with foreign visitors expected to rise to 41 million from the 36.55 million expected for 2024. However, paying by foreign visitors has declined, primarily due to changing behavior.

Meanwhile, Thailand’s goods exports in US dollar terms are expected to grow at a slower pace of 2.8 % in 2025, compared to 4.6 % in 2024. A softer growth is attributed to increased international uncertainty, especially a sluggishness in international trade as a result of rising tensions between the US and China, as well as potential tax increases under Donald Trump’s administration.

She added that probable spillover effects, such as comprehensive tariffs on China and important emerging economies, could be caused by the disconnection of the US and China’s industry and tech supply chains. As a result, higher risks are expected in the coming year, Ms Nalin noted.

Additionally, Ms. Nalin anticipates that the Bank of Thailand ( BoT ) will maintain its current neutral monetary policy position to protect policy space and promote household debt deleveraging. If the financial recuperation is significantly below what the BoT’s Monetary Policy Committee anticipates, Citi Thailand will start lowering the policy rate by 0.25 percent positions in the first third of 2025.

The Thai GDP growth rate is anticipated to remain around 3 % over the medium term. We anticipate more improvement in the implementation of reforms that aim to increase the country’s competitiveness and fiscal revenues, such as improvements to business simplicity and extra fiscal reforms, according to Ms. Nalin.

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Will the federal deficit be Trump’s nemesis? – Asia Times

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This research appeared earlier this week in the Asia Times ‘ International Risk-Reward Monitor, a regular examination of market forces.

Given our current position of information about the new government’s intentions, we foresee a steadily deteriorating socioeconomic environment in 2025 with continual high interest rates, higher than expected inflation, and weaker than expected earnings.

The Biden Administration bequeathed Donald Trump the largest-ever federal deficit ( at 6.1 % &nbsp, of GDP ) in an economic expansion. &nbsp, The president-elect wants to renew&nbsp, his 2018 corporate tax cut at an estimated cost of$ 400 billion per year, &nbsp, and&nbsp, eliminate taxes on Social Security income at a cost of about$ 150 billion per year. &nbsp, That would raise the federal deficit, now at$ 1.7 trillion, by about a quarter, minus possible revenues from additional tariffs ( which now bring in about$ 80 billion a year in revenue ), and whatever cost savings&nbsp, his team can obtain from spending reductions.

What didn’t go on forever didn’t, according to Okun’s Rules, and the United States doesn’t continue to run up the federal deficit continuously. But it has a price to pay to continue doing so for the near future. America doesn’t encounter a” Liz Truss time” ,&nbsp, as Swiss Re economist&nbsp, Jerome Jean Haegeli&nbsp, told the Wall Street Journal&nbsp, November 21, referring to&nbsp, the blowup of the UK tie business in October 2022 after the short-tenured prime minister proposed deep tax cuts. &nbsp, For the time being, the US can fund the Treasury’s saving need with&nbsp, local resources. However, that comes at a high price, and it’s possible that financial pressure may become stronger in 2025.

Unlike the aftereffects of the 2008 World Financial Crisis, when foreign central banks financed the boom in Treasury loans, US regional economic institutions&nbsp, absorbed the bulk of post-Covid Treasury financing, with some help from international personal investors and US homes. The presence of financial institutions in Treasury funding is more clearly visible graphically in terms of levels.

Lenders can continue to get Treasuries, but only if interest rates remain high. According to McKinsey, return on equity for large parts of the finance sector would be lower than the institutions ‘ individual cost of capital without the rise in interest rates of the previous two years. The supply on medium-term Treasuries is approximately equivalent to the bank’s loans from the central bank, which means that the deficit cannot be funded by the legendary printing press. Deposits, while, cost much less than borrowed money, and the Biden Administration’s massive governmental increase of 2019-2020 unleashed a flood of payments into the banking system. Payments rose much faster than institutions ‘ loans and leases, and were channeled into Treasuries.

That began a period in motion. Federal subsidies caused the gap to balloon, but a sizable percentage of those subsidies were reinvested back into the Treasury securities that provided the deficit. The grants unleashed prices, and the Federal Reserve&nbsp, raised interest rates, making Treasuries appealing for businesses. &nbsp, Higher interest rates&nbsp, doubled the cost of servicing the federal debt, to$ 1 trillion last year from$ 500 million in 2020.

In short, the rising of Treasuries on banks balance sheets, the higher price setting, the higher deficit expected to doubled interest payments, and higher inflation are all facets of the same problem.

What could go bad?

For one thing, a year ago, the surge in payments that made it possible for banks to purchase Treasuries with inexpensive customer money stopped. Lenders will have to make a higher yield than they already receive for immediately money from the Federal Reserve in order to continue funding the deficit. The secured over funding rate is currently higher than the supply of five-year Treasuries.

Businesses can use inexpensive reserves to finance buying of Treasury securities, but no expensive borrowings from the central bank. As we see in the chart above, &nbsp, the year-on-year shift in business businesses assets of US Treasury and Agency stocks tracks the year-on-year shift in payments.

Lenders will only be able to continue funding the Treasury gap once the spread between the central bank’s cost of funds and the produce on Treasury securities has dried up. One chance, of course, is that the main institution could provide cheaper revenue to the banks. That would in effect allow the printing press to fund the Treasury deficit, which is a badly inflationary move. Fed head Jerome Powell didn’t do this.

Another possibility is that medium-term Treasury yields need to climb. Rising long-term curiosity rates, though, may reduce if not eradicate economic growth.

Furthermore, US households may stop consuming and purchase a lot more government securities. &nbsp, American families save only 4.4 % of their disposable income, or about$ 1 trillion a year. If homeowners doubled that to$ 2 trillion a month, they could fund the gap by themselves. However, a rapid decline in use may lead to a recession, lower taxes revenues, and a bigger deficit.

Accidents are often feasible – for example, a big problem in the multi-trillion industry for short-term funding of government securities. As the Federal Reserve shrank its portfolio holdings of Treasuries, the illiquidity of the Treasury market ( as measured by the bid-asked spreads of off-the-run Treasuries ) worsened.

However, it’s unlikely that a liquidity seize-up would cause any long-term harm. Central banks have a way to react to these kinds of situations; they simply purchase whatever is available until the market drops.

The consequence of the expansion of US debt, high inflation, high Treasury rates and high debt service costs is likely to be gradual – a headwind, not a cyclone. &nbsp, This will hit US consumers the hardest.

US consumers borrowed money from credit markets to maintain their level of consumption after the Biden subsidies expired in response to high ( and significantly higher than expected ) inflation. Credit card debt increased significantly, while the interest rate on revolving credit increased from 14 % to 22 %. Revolving credit’s total interest payments increased from$ 100 billion to$ 250 billion last year.

The tax cuts that Trump’s team has &nbsp, discussed don’t have supply-side effects. Extending the old corporate tax cut doesn’t change incentives to invest, and removing taxation of Social Security benefits won’t bring more 70-year-old into the workforce. &nbsp, Tariffs cannot help but increase prices, both for consumers and for production inputs. Higher tariffs on imported capital goods will likely lead to a lower investment because the US currently imports more capital goods domestically than it produces.

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Will the federal deficit be Trump’s nemesis? – Asia Times

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Subscribe right away and get the first year for only$ 99. With a one-month trial for only$ 1, you can sign up for the exclusive rate of$ 99.

Does the federal deficit been Trump’s nemesis?

David Goldman discusses the financial issues facing the incoming Trump administration, forecasting a deteriorating culture in 2025 marked by persistent high interest rates, inflation, and weaker revenue – challenges that will weigh heavily on US homes.

Germany’s governmental panic risks euro stability

Diego Faßnacht examines Germany’s possible transition away from tight fiscal control as the CDU/CSU partnership announces plans to lower the constitutional debt cap to fund tax cuts and fiscal reforms, evoking a new era of higher loan and looser economic policy.

Kiev mulls a” Christmas unpleasant” as Russia increases ground

James Davis reports that Ukraine’s status is deteriorating amid dwindling recruits, lower motivation, and strained tools. President Zelensky presumably ordered troops to hold jobs at all costs until Trump’s opening, hoping to keep negotiations leverage.

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Calling inequality unnatural, Thomas Piketty shows a way forward – Asia Times

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Book Review: Nature, Culture, and Inequality by Thomas Piketty, translated by Willard Wood ( Scribe )

Thomas Piketty’s Character, Society, and Inequality is a little guide that lists an issue of great value: Is the social injustice we observe every day normal?

Drawing on traditional economic data from all over the world, Piketty identifies a trend toward greater political and socioeconomic justice from the late 18th centuries. From 1914 to 1980, this was especially evident in Western nations. Since then, that craze has slowed significantly.

Piketty explains that injustice manifests in various ways in different cultures, as well as in various ways in the same societies throughout history. Disparity, he says, has “followed dramatically different trajectories – social, economic, cultural, civilizational, and religious”.

This shows us that people culture is more adjustable, and therefore more pliable, than some have assumed. ” It is society in the broadest feel”, he argues,” and more particularly political participation” that “provides an argument for the variety, education, and structure of the social inequalities we observe”.

There is no justification for us to maintain the 20th century episode of growth toward greater fairness in the present. In truth, without significantly addressing injustice, Piketty argues, we may wish to properly address the climate crisis.

Piketty is the co-director of the World Inequality Lab and a professor at the Paris School of Economics and the École des Hautes Études en Sciences Sociales ( EHESS). He is best known for his landmark 2013 book Capital in the Twenty-First Century, which became a bestseller and sparked a global conversation about capitalism, injustice, and tax policy.

Piketty argued using historical data and statistics that if the return on capital exceeds the economy’s growth rate, it follows that riches will become more and more focused. This, in turn, leads to disturbing rises in inequality, which are not only harsh but undermine democratic and normative values, trust in institutions and social cohesion.

Piketty’s new guide is designed to make his thought accessible to a wider audience. It is based on his book A Brief History of Equality ( 2021 ) and his lecture on inequality from the World Inequality Database in 2022.

Verbal in tone, and accompanied by attractive colour charts, the text moves rapidly through topics including income and wealth disparity, gender inequality, the rise of the welfare state, education spending, progressive taxation of income and inheritance, the collapse of imperial assets, public debt crises and the climate crisis.

Piketty presents what he believes to be the key to a more simply and lasting world by dissing some of his key insights about the evolution of income and wealth disparity throughout history.

Income and wealth disparity

When it comes to income ( who earns what ), the bottom 50 % of earners receive 5-6 % percent of total income in the most inegalitarian countries ( e. g. South Africa ). In more egalitarian countries ( e. g. those in northern Europe ), the bottom 50 % earn 20-25 % of total income.

The distribution of wealth ( who owns what ) is even less equal. In any nation on earth, the poorest 50 % do not own more than 5 % of the world’s total wealth.

Even though they have been significant, the main issues with reducing disparity in the 20th century were the distribution of income. ” When it comes to the transmission of wealth”, Piketty argues,” things have changed quite much”.

As he points out, the “great redistribution” of property in his native France, largely between 1914 and 1980, had” a significant impact on reducing disparity between the richest 10 % and the next 40 %”, via the emergence of a “property-owning middle class”. Despite this significant development,” the poorest 50 % have hardly ever benefited from the transfer of property in the last two decades.”

Piketty argues that, like the 20th century action towards greater justice, new styles of increasing injustice are not obvious. Nor are they explainable in terms of “personal talent, native endowment or natural temperament”.

The notion that “great disparities are somehow’natural’ because ability or entrepreneurialism is unevenly distributed across individuals ( or countries, or ethnic groups ) is frequently “used to argue that efforts to reduce inequality will either be ineffective or reduce growth and prosperity, or both,” as journalist Jonathan Portes once remarked.

This claim is not supported by the historical data, says Piketty. He refutes the notion that “very large inequalities are the inevitable outcome of a well-functioning market economy,” which predominates in much contemporary economic thought and policy discussion. The key to understanding reductions in inequality, he argues, is that they are directly related to a country’s political culture and institutions. They are primarily a result of the historical function of collective political mobilization to influence change.

What works: Sweden vs. the United States

Sweden in the 20th century, Piketty writes, is an example of the power of political organization, social struggle and” the ability to build new institutional outcomes”.

Until around 1920, Sweden, like other European countries, was “extremely inegalitarian”. Its political system was elitist. Only the richest 20 % of men could vote. Votes were distributed based on individual wealth: the more votes you could cast, the wealthier you were.

The Social Democratic Party and the trade unions then “put the state capacity of Sweden in the service of a different political project” through” collective mobilization.” Instead of “using the records that had made it possible to allocate the right to vote,” they instead used them to “impose a progressive tax, with the aim of funding access to education and healthcare.”

The Swedish example, according to Piketty, is instructive on a number of fronts, according to Piketty. Firstly, it shows that” a country is never inegalitarian or egalitarian by nature”. That “depends on the government’s power and goal.” Secondly, Sweden’s social democratic policies led to it becoming both one of the most equal societies in the world, as well as one of the richest.

The United States makes an interesting comparison. In recent history, the wealth of its middle class has been shrinking. Having at one point reached wealth distribution patterns similar to Europe’s, it is now headed in the direction of” Europe’s pre-World War I levels”.

Between 1932 and 1980, inequality decreased in the United States. The nation’s prosperity and rising income levels were present during that time, which” stifled neither economic growth nor innovation.” The totemic Reagan-era reduction of high tax rates in the 1980s failed to deliver on its promises to its backers. Economic growth in the United States in the period 1990-2020 was half what it was in 1950-1990. Inequality accelerated.

Addressing inequality

Despite how imperfect the process has been, the welfare state’s creation was the most crucial factor in addressing inequality in the 20th century. Progressive taxation was used to fund increased spending on healthcare, pensions, housing, infrastructure and education. According to Piketty, the roughly tenfold rise in public spending over the past century was a significant contributor to promoting individual freedom, reducing inequality, and raising productivity and living standards.

The question of what might represent “acceptable levels” of income disparity, according to Piketty, is” clearly a question that a democratic process and public deliberation should deicide”. However, he suggests a ratio of 1 to 3 or 1 to 10 between the richest and the poorest. These levels can accommodate diversity of aspirations, while maintaining the incentives “necessary for social and economic organization”. Nothing, economically or socially, justifies ratios of 1 to 50 or 1 to 100.

Low tax rates and astronomical corporate incomes were not a key component of the United States ‘ historical advantage over its competitors in terms of productivity, especially in the industrial sector. It was its lead in education. The “near-universal” access to secondary education the United States achieved in the 1950s was not realised in Germany, France and Japan until the 1980s and 1990s.

Since then, despite the significant expansion of access to tertiary education, with its acknowledged advantages, spending on education across Western countries has stagnated.

Inequality and the climate crisis

Returning to the “nature” theme at the conclusion of his book, Piketty argues that understanding inequality makes it easier for us to comprehend the problem of climate change and what we need to do in response. He succinctly summarizes his main point in an interview with Manuela Andreoni, a reporter for the New York Times:

If we don’t address our inequality challenge at the same time, there’s no way we can preserve… planetary habitability in the long run.

This is a result of the Global North’s comparatively high carbon emissions in comparison to those of the Global South. However, it is also a result of global carbon emission disparities, particularly the large carbon footprints of the wealthiest 10 %.

According to Piketty,” It is obvious that we’re going to have to change our production and consumption regime throughout the world.” This will need to be society-wide, but with particular focus on the rich and the middle class:

If you don’t demand a lot more effort from the people at the top, there is simply no way for the middle-class and lower-income groups to accept the kind of transformation that is needed.

According to Piketty, the climate crisis “may result in a greater demand for equality than we’ve recently seen.” In the 20th century, many countries achieved the expansion of access to health care and education – and,” to a lesser extent, transport, housing and energy” – by taking these parts of the economy out of market frameworks and viewing each of them as a public good.

” A similar shift”, he suggests,” could help the world curb climate change and stop biodiversity loss”. Piketty responds to Andreoni’s question about sceptical and cynical responses to a proposal like this:

that’s what we did for education and health. We recently decided that learning about this and that was important for all children at the ages of 6 and 10, 15, and then 18, respectively. And we didn’t let the market system decide this. And now, no one wants to return to the previous circumstance.

At Deakin University, Christopher Pollard is a sessional academic in sociology and philosophy.

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Pacific island nations still lose out despite superpower rivalry – Asia Times

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A 140 million aid agreement signed on December 9 between Australia and Nauru is a primary example of the Pacific nations ‘ walking on a geopolitical wire in the twenty-first era.

The package provides Darwin with strong fiscal support, stable banking services, and policing and security resources. In exchange, Australia will have the right to object to any agreement Nauru may reach with various nations, particularly China.

The filibuster terms are comparable to the late last year” Falepili Union,” which gave Tuvaluans access to American citizenship and help for climate change in exchange for security guarantees.

Additionally, more details about a security agreement between the United States and Papua New Guinea were revealed just last week. It is now known to be fair US$ 864 million. In exchange for funding in military facilities development, training and equipment, the US increases unlimited access to six ships and terminals.

Even last year, PNG signed a ten-year, A$ 600 million offer to finance its own group in Australia’s National Rugby League competitors. In exchange,” PNG won’t mark a security agreement that would permit the presence of Chinese police or military forces in the Pacific.”

These preparations represent the political conflict that exists between the US and its allies in the Pacific, on the one hand.

This tactical conflict is frequently depicted in political commentary and mainstream media as an extension of” the great game” waged by rival countries. Pacific countries can be seen as attempting to profit from their own growth priorities, from a standard protection perspective.

However, this presumption that Pacific governments are “diplomatic value setters” who can pit China and the US against one another ignores the very actual power disparities that exist.

The danger, as the authors of one new research argued, is that the” China risk” tale becomes the explanation for “greater Western militarisation and financial dominance”. In other words, Pacific countries become political value takers.

Defense politics

The countries in the Pacific are vulnerable on a number of fronts: the majority have weak monetary foundations, and many are in debt. They are also at the forefront of rising sea levels and climate shift.

More bill and greater risk are the result of the costs associated with recovering from more numerous extreme weather events. Weather funding in the Pacific typically takes the form of concessional funding, as was reported at the UN COP29 summit this year.

The Pacific is already one of the country’s most aid-reliant areas. However, when victim nations continue to struggle to achieve their development goals, there is still much uncertainty about the effectiveness of that help.

Governments frequently lack the capacity to handle growing help packages at the national level. And they fight with the political responsibilities that the new political conditions demand.

In August, Kiribati also closed its borders to officials until 2025 to let the new state “breathing space” to attend to domestic politics.

In the past, Australia’s economic aid included institutional support and management. However, a significant portion of development aid is then geared more toward defense and policing.

Australia just committed A$ 400 million to the Pacific Policing Initiative, on top of a host of different security-related activities. This is all a part of a general increase in the so-called “defense diplomacy,” which has caused some observers to condemn the democratization of help at the cost of the Pacific’s most vulnerable people.

Lack of great belief

In addition, some political parties in the Pacific region operate largely unofficially and without complete plan manifestos. Most institutions lack political departments for examining foreign policy.

The end result is that small scrutiny can be given to international policy and security arrangements because they can get driven by personalities rather than by policy priorities. Pacific regions are even susceptible to corruption, as outlined in Transparency International’s 2024 Annual Corruption Report.

Executive Director of Transparency Solomon Islands, Ruth Liloqula, wrote about the effects of the Solomon Islands ‘ political conflict:

Since 2019, my country has become a center for political tensions and unusual disturbance, and undue effect.

Also, Pacific affairs specialist Steven Ratuva has argued the Australia–Tuvalu arrangement was one-sided and showed a “lack of great faith”.

Behind these developments, of course, lies the evolving AUKUS security pact tying together Australia, the US and the United Kingdom, a response to growing Chinese presence and influence in the” Indo-Pacific” region.

The responses from the Pacific countries have been political, perhaps because they cannot “rock the submarine” very much given their relationships to the major powers at play. But past Pacific Islands Forum secretary-general Meg Taylor has warned:

Pacific leaders needed to start raising their voices for the sake of their fellow citizens because they were being sidelined by significant political decisions affecting their place.

While there are clear benefits associated with strategic alliances, the substantial effects for Pacific countries are still incomprehensible. Not a second target is on record to be accomplished by 2030, according to the UN’s Asia and the Pacific progress report on sustainable development goals.

Unless these alliances are grounded in great faith and real sustainable development, the grass effects of geopolitics-as-usual may never change.

Sione Tekiteki is a senior teacher at Auckland University of Technology’s Faculty of Law.

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Trump 2.0: Asia in a highly risky place in America’s inflation era – Asia Times

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As Asia brackets for the fantastic” Trump business” experience of 2025, the instructions from 2024 are fast piling up.

The biggest session is how badly the inflation-is-transitory deal worked out for buyers. And for citizens and earth officials who don’t appreciate a Donald Trump 2.0 president.

The&nbsp, US prices surge has some parents — from post-Covid supply chain disruptions to exceptionally low interest rates to an blast of over-the-top state signal. But Trump’s election is the mother-of-all part results from fiscal and monetary laws run rampant.

And Asia has the greatest front-row seats for what’s to come as Trump retakes the ropes with really big — and&nbsp, questionable — programs.

The Trump-to-be-war is the subject of the most attention. But far more attention should be on the fireworks sure to come as Trump ‘s&nbsp, policy promises&nbsp, meet with a fiscal train wreck unfolding in slow motion.

On January 20, Trump did gain a federal loan exceeding US$ 36 trillion. And depending on which columnist you follow, Trump may be about to axe the debt in significant ways with huge tax cuts, or given the enormous knife Trump has given Elon Musk, to aggressively reduce it.

Which result might result in significant risks for world markets.

Door No. One could see payment rating companies stumbling over US debt as US debt rises to US$ 40 trillion. Washington was quickly lose its final Premium standing, from Moody’s Investors Service. Asia is directly at the center of the conflict that a downgrade may cause in the world’s relationship, stock, and money markets.

Door No. 2 may see Trump’s Tesla tycoon patron trying to trim&nbsp, national spending&nbsp, by firing government workers here and there. However, Musk’s state performance product won’t make a gash until Team Trump is ready to attack the military and privileges like Social Security, Medicare, and Medicaid.

Deregulation and excessive grants for sectors like Musk’s private businesses would have much more success. A lack of funding in productivity-boosting industries and technologies made the US so vulnerable to inflation.

” With Trump and some good appointees focused on reducing diplomatic deficits”, says Andrew Tilton, &nbsp, an analyst at Goldman Sachs,” there is a danger that — in a sort of’ whack-a-mole’ way — burgeoning bilateral deficits was eventually fast US tariffs on another Asian economies”.

Tilton adds that” Korea, Taiwan and, particularly, &nbsp, Vietnam&nbsp, have seen big trade benefits versus the US”, things Trump 2.0 isn’t possible to let slip. As such, Asia’s leading trading nations does try to narrow surplus to “deflect” Team Trump’s focus away from them.

According to Barclays Bank analyst Brian Tan,” business plan is where Mr. Trump is likely to be most significant for emerging Asia in his second word as US leader,” inflicting “greater pain” on more empty economies.

Suffice it to say, America’s debt excesses also will challenge — and most likely plague — the Trump 2.0 era in ways the president-elect doesn’t seem to realize.

If ever there were a buckle-your-seatbelt moment for Asia, 2025 is it. The combination of runaway debt and inflation will limit the Federal Reserve’s ability to continue&nbsp, cutting rates. And even if Fed Chairman Jerome Powell tries, fiscal realities will result in higher-than-hoped long-term rates.

The state of the banking system is one of the pressing concerns of the Fed. Banks have been huge buyers of Treasury securities. If medium and long-term government debt yields fall faster than expected, will institutions experience stability issues?

This could trigger supply issues, too. If interest rates move too low or move too quickly, is it reasonable to ask if banks can continue to buy Treasuries?

According to Yanmei Xie, an economist at Gavekal Dragonomics, one of Asia’s issues is that it’s unclear who Trump will be in the White House in roughly a month.

The issue with interpreting trade policy in a second Trump administration is that Trump has publicly supported both positions and that Trump has publicly stated his views on them. The common feature is tariffs or the threat of tariffs: 60 % or more on China and 10-20 % on the&nbsp, rest of the world. But to what end?”

One possibility, she says, is that Trump will go with his once and possibly future trade czar, Robert Lighthizer, in pushing for a rapid, across-the-board disengagement from China.

Trump,” Xie says,” promised a four-year plan to phase out all imports of essential goods from China, including everything from electronics to steel to pharmaceuticals, and pledged to include strong safeguards to prevent China from bypassing restrictions by passing goods through conduit nations. In this scenario, there would be a ramping-up of coercive pressure on allies to join in the&nbsp, anti-China&nbsp, agenda.”

Trump might also use the threat of tariffs as leverage to strike a deal with China, despite the content of any such deal being very uncertain. This is the approach favored by Scott Bessent” – Trump’s pick for Treasury secretary –” who claims that Trump is in fact ‘ a free trader ‘ who will deploy tariffs to escalate to&nbsp, de-escalate,” Xie notes.

Another major Trump wild card is a US dollar devaluation, which many Trump advisers see as the fastest way to regain broad-based manufacturing competitiveness.

” China is unlikely to cooperate with this agenda,” Xie says”, but the theory of the across-the-board tariff on all trading partners seems to be that it will also be used as leverage in currency negotiations.”

Trump has in fact mentioned a Plaza Accord 2.0, which lowers the dollar against the yen.

In 1985, US President Ronald Reagan’s Treasury secretary, James Baker, managed to convince the most powerful industrialized nations to push the yen sharply higher and the dollar lower. It was the high-point of Reagan’s mercantilist policy mix, which inspired Trump. The Plaza Hotel, a landmark hotel in New York that Trump once owned, was the location of the transaction.

When Trump was in office, advisors like Peter Navarro and then-Treasury Secretary Steven Mnuchin made hints about Trump’s desire for a “new Plaza Agreement” that would send the Chinese yuan into a soaring range. Now, as&nbsp, Trump 2.0&nbsp, gears up, Trump seems ready to give the strategy another try.

Xi Jinping, the Chinese leader, would undoubtedly reject. Chinese officials are aware of how the 1985 currency deal caused Japan’s asset bubble in the late 1980s, which resulted in decades of economic stagnation. A stronger yuan would slam China’s crucial export engine, but many economists worry that a weaker dollar might cause inflation to go into the stratosphere.

One way Trump might try to engineer a weaker dollar is by commandeering&nbsp, Fed policy&nbsp, decisions. Trump and his advisers have made it clear that in January, the Fed’s independence will be in jeopardy. The” Project 2025 “scheme that Republican operatives cooked up for Trump 2.0 includes curbing the Fed’s autonomy.

Jerome Powell, Trump’s handpicked Fed chairman, had a challenging time during Trump 1.0. From 2017 to 2021, Trump cajoled Powell’s team with a verve never before seen from a White House. Trump attacked the Fed in speeches, press conferences and on social media. Trump even mulled firing Powell. That year, the Fed suddenly began cutting rates, adding liquidity to an economy that didn’t need it.

In October, Trump mocked Powell’s policymaking team”. I think it’s the greatest job in government,” Trump told Bloomberg”. Everybody talks about you like a god when you say, “let’s say flip a coin,” and you show up to the office once a month.

Trump also contends that presidents have the authority to compel the central bank to do their bidding. Trump said in August that the Federal Reserve is a very interesting thing and that it has sort of gotten it wrong frequently. He added that” I feel the president should have at least say in there, yeah. I feel that strongly. I think that, in my case, I made a lot of money. I was very successful. And I believe I have a better sense of instinct than those who, in many cases, would be chairman or the Federal Reserve.

Such maneuvers are of particular concern in Asia, where central banks have the largest stocks of US Treasury securities. Japan alone holds US$ 1.1 trillion of US debt, &nbsp, China&nbsp, US$ 770-plus billion. The largest investors in Asia have approximately US$ 3 trillion worth. Many pieces of Asian state wealth could be in danger as a result of Trump’s 2.0 presidency.

Trump’s antics here could send the dollar sharply lower. Many investors argue, of course, that continued dollar strength isn’t necessarily great news for the global financial system heading toward 2025 either. In recent years, the dollar’s “wrecking ball” tendencies have shook global markets. It sucked up outsized waves of global capital, disadvantaging emerging economies in particular. &nbsp,

When Tom Dunleavy, a partner at MV Capital, states that the risks posed by this wrecking ball dynamic are “particularly acute in emerging markets because” they rely heavily on commodities and have debt in dollars, he speaks for many. ” Oil, most trade and debt are still priced in dollars. And, he says”, The denominator of everything is going up.”

Regardless of the dubious logic behind it, the more crowded a continued-dollar-strength trade becomes, the worse the global fallout when depressed punters flee for the exits. If Trump’s Treasury team works to devalue the dollar, the U-turn could be particularly chaotic. The more chaotic a maneuver becomes the more inflationary it turns out to be.

Economists including former US Treasury Secretary Larry Summers are warning that Trump would be wise to abandon his campaign promises, in order to avoid sending&nbsp, inflation&nbsp, sharply higher. &nbsp,

Summers was right about US inflation being of the longer-lasting variety. Now, he worries that Trump’s plans to impose giant tariffs, cut taxes, deport undocumented workers and mess with the Fed’s mandate will boost inflation.

According to Summers,” If he sticks to what he said during his campaign, there will be an inflation shock that will be far greater than what the nation experienced in 2021.”

Summers worries that the upcoming Trump stimulus may bring prices down to the nine-decade high of 9.1 %, which was recorded in June 2022. In 2025, US inflation almost certainly will rule the world economy, even if this proves to be too pessimistic.

According to Kelvin Wong, senior market analyst at broker OANDA,” the incoming Trump administration’s ‘ America First ‘ policy may see a further escalation of deglobalization that could lead to headwinds to global economic growth and spurt another round of inflationary pressure resurgence.”

Wong points out that Trump’s mercantilist policies may cause the 10-year US Treasury yield to increase faster than the 2-year rate because of higher inflationary pressures.

Far from being transitory, US inflation may be about to get a very powerful second wind, one sure to blow Asia’s way early and often in 2025.

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