Restoring Global Order and Stability in World Markets
Fri, 08/05/2022 – 08:31
In the winter of 1984–85 the United States faced the rising threat of global economic and financial instability in the world monetary system, which could have led to a global market meltdown or severe world recession. Now, once again, the US dollar is at record highs against all other currencies, and inflation at levels not seen for many decades is spreading around the world. The United States is threatened by recession and possibly a period of stagflation; Europe already faces declining growth; Russia’s war in Ukraine promises continued economic stress; emerging-market countries face potentially disastrous adjustment challenges; the US and other leading stock markets, including China’s, are highly volatile, with a bias toward negative territory; and global debt by any past measure is at unsustainable levels. Finally, there is a clear absence of global leadership willing and able to deal with a looming economic catastrophe. The G7, for example, seems paralyzed today, limited to useless, futile gestures.
It was not always like this. For example, the falling dollar and widespread evidence of a decline in US leadership was followed by the election of President Reagan in 1980 …read more
Source:: Hoover Institution