Is A Recession Around The Corner?

In the last post we talked about the difficult task facing the Fed with interest rates. If interest rates are raised to cool off excess demand and at the same time the short-term drivers of inflation subside on their own (people spending their savings from government payments, supply chain issues resolving, and geopolitical tensions easing) […]

Will Demand Stay Strong?

In the last post, we discussed the issue of the 4-decade high inflation and what is causing it. In previous posts, I had reviewed the data from the last few decades and how there has been a raging debate about why inflation has been so low for so long. All of a sudden last year, […]

What Will Happen to Prices?

In the last few months, we have extensively discussed the issue of inflation. My focus has been on examining the drivers of inflation, why it picked up after years of dormancy, whether it’s transient (whatever that means!) and what are the short- and long-term implications for demand and growth. My view has been that many […]

US Needs to Seize This Moment

US posted higher economic growth than China last year for the first time in decades. This was due to a strong government response to the pandemic and the underlying dynamic nature of the US economy that enabled it to weather the storm better than any other economy in the developed world. Also, some of the […]

The Financial Sector Can Determine China’s Future Potential

The financial sector of any economy is very different than any other sector. It supplies the key ingredients for all of the other sectors of the economy: Capital! Any problems in this sector rapidly disseminates to all of the other sectors of the economy. If credit or investments dry up because of issues with the […]

Key Challenges to China’s Long-Term Economic Growth

China’s rise as an economic power has been marked by tapping the potential of a large, mostly under-used population. It moved hundreds of millions of people from rural to urban areas and became the production factory for the world. This has increased the GDP per capita in China to around ten thousand dollars. This is […]

US Economic Resurgence and Implications For the International Competition

Something amazing happened last year: US had a higher economic growth rate than China! This has not happened in decades. US being a large, fully developed economy with a high GDP/Capita is expected to grow 2-3% per year. However, last year, the US economy grew at 5.7%, highest growth rate in decades. This happened while […]

The Emerging Landscape of International Competition II

Continuing with our discussion of how the competition for international influence and geopolitical climate will evolve in the coming decades and century, it’s worth examining some of the key drivers of economic growth and international influence.   In the last blog post in this series, we discussed how recent actions by the central government in […]

The Emerging Landscape of International Competition I

Last year saw several milestones signifying China’s rising global influence: it attracted more foreign investment than the U.S. for the first time and the number of Chinese companies on Fortune’s list of the world’s largest overtook the U.S. And for all the talk of supply-chain diversification amid the trade war, China’s share of global trade actually increased at a record pace […]

Will China Continue to Defy Gravity?

In the last post, we discussed China’s astonishing economic growth over the last few decades. As a result, it is now the world’s second largest economy and continuing to gain on US. This is not just the size of their economy but also their overall confidence in the international sphere and challenging the West for […]