Brendan Brown, PhD, is one of the world’s leading monetary theorists. He is senior fellow at the Hudson Institute and associate scholar at Mises Institute. He is a columnist for Nikkei Veritas and a frequent guest on Bloomberg TV and Radio. Brown is a monetary economist whose areas of special expertise include Austrian monetary tradition, European monetary integration, Japanese monetary issues, the global flow of capital and international financial history. He has developed techniques of market analysis during a long career in international financing including the role of chief economist at Mitsubishi (UFJJ) International Finance. He has published many books on international financial topics including most recently (2018) “The Case Against 2 per cent inflation” (Palgrave). He received a PhD from University of London and MBA from University of Chicago.
Dr. Brown has begun a new publication, "Monetary Scenarios,” the inaugural issue of which is below. To receive further mailings, contact him directly at email@example.com.
At his recent cabinet meeting, President Trump presented an entirely false account of the Soviet invasion of Afghanistan in 1979 — precisely the account being pushed by Vladimir Putin. It is an account which is false. It both justifies the Soviet invasion and misstates the effect of the Soviet defeat in Afghanistan on the collapse of the USSR. Where Trump got that interpretation and why he is offering a justification for the USSR invasion remains a mystery — along with so much else about him.
In recent years, foreign owned enterprises in China have been under increasing price pressures. For example, according to tradingeconomics.com, wages in manufacturing in China increased to 64,452 CNY/Year in 2017 from 24,192 CNY/Year in 2008. At current exchange rates, that is equivalent to $9,268.47/Year. Many companies have canvassed Southeast Asia for lower cost manufacturing countries. Some bailed out of China for Indonesia, Thailand, and Vietnam. Now, added pressure on companies in China has been added from the tariffs that President Trump imposed on Chinese manufacturing exports. Once again, fleeing China seems a good option. But no other country in the region (and probably the world) can offer the benefits of manufacturing in China. Here is one explanation, by a Chinese manufacturing sourcing company, as to why Vietnam, in fact, is not a good alternative to China.
In his role as military leader, Trump fails as he does as moral leader of the American people and, apparently, as leader of the non-military federal bureaucracy
The Trump-Bolton sanctions recently levied against Iran will not force Iran’s government to buckle under to U.S. wishes and end its ballistic missile program; its aggressive foreign policy; its support for Hezbollah and the Houthis; it’s flirtation with the Taliban or other U.S. goals. Instead it will find inventive ways to export some oil and acquire sanctioned goods and services.
Prime Minister Netanyahu has tied Israel to U.S. Republicans. That did not start with President Trump but has deepened under his Presidency. (In fact, Netanyahu made a very public show of supporting Mitt Romney in 2012.) Through his deep ties with President Trump, Netanyahu has achieved some of his major goals. The U.S. withdrawal from the nuclear deal with Iran has been a central goal for Netanyahu. Moving the U.S. Embassy to Jerusalem to legitimize his claim that the city was, in fact, Israel’s capital (and not the capital of Palestine) was another major goal. And America’s de facto approval of Israel’s occupation of the Palestinians has been another major accomplishment. All the while, this has frayed ties with more liberal American Jews who support the Democrats.
Now a new source of dismay with Israel has arisen for many American Jews. Netanyahu appears to support the right wing populist Hungarian leader, Victor Orban, against George Soros. Orban has been censured by the European Union for his anti-democratic policies. But certainly not by Prime Minister Netanyahu.
Miles Morland, the sage of contrary British thinkers, offers two contrary predictions — on the fate of the UK after BREXIT and of President Trump’s party in the U.S. Midterms. Whether his predictions turn out to be right or wrong, he is guaranteed to stimulate your thinking.
The Khashoggi murder is not the first of its kind. The late and little lamented Saddam Hussein killed a British journalist and escaped retaliation. But the more recent murder of Khashoggi is proving more difficult for the Saudis to lay to rest. Despite their public relations campaign, even President Trump now senses that the Saudis have lied. One thing for certain, this mess is not going away quickly.
The U.S. economy is barreling ahead. For now. But Trump's economic policies will prove to be anathema to U.S. stock prices. How deep will the fall be? Read on.
Yes, the stock market is at historic highs. Yes, the economy continues to grow robustly. Yes, employment is really low and wages are beginning to rise. But what else would you expect from the various stimulative policies adopted by President Trump. The massive tax cuts combined with increased federal spending have done wonders for all the indicators (including a massive increase in the annual federal budget deficit). But powerful costs follow as well. As interest rates rise, the burden of carrying increasing annual deficits of a trillion dollars becomes significant. Given the massive deficits, the feds will have less ammunition the next time the economy needs stimulating. Other challenges follow as well. Here are some of them.
African population growth continues at a startling pace. In 2017, Africa’s population was estimated at 1.3 billion people. By 2030 the number is estimated to grow to 1.7 billion. Nine out of the ten countries with the highest total fertility rate (TFR - the average number of babies a woman births over the course of her reproductive life) are in Africa. (The tenth is Afghanistan.) The average number of babies born to women in Niger, for example, is 7.3. The average number of babies born to women in Nigeria is 5.5.
A number of factor account for Africa’s rapid population growth. One is that African women report that they wish for larger families than women from any other continent. Another is the absence of modern contraception in certain countries. Below is a chart on the percentage of women using modern contraceptives, by country. Virtually all African countries are below the levels of the rest of the world.
Simultaneously, some of the world’s lowest total fertility rates are to be found in Europe. The average number of babies born to women in Italy is 1.3; in Germany, 1.5; in France, 1.9. Since the average has to be 2.1 babies per woman to maintain stable adult levels, these numbers will actually result in shrinking populations. But even where the population grows, the numbers for Europe are tiny. For example, Spain’s population is expected to grow from 46 million in 2015 to 48 million by 2050. In the same period, Tanzania’s population will grow from 48 million to 138 million.
It seems a sure bet that those 138 million will not find adequate employment opportunities or a level of well being at home they consider acceptable. Their answer seems obvious — head for those rich European countries whose population have grown only by minuscule amounts or even better, have actually shrunk over the previous decades.
The reality is that Europe faces yet another threatening challenge — from demography.
President Trump has expressed his willingness to meet without preconditions with President Rouhani of Iran. Immediately after, Secretary of State Pompeo listed preconditions: “If the Iranians demonstrate a commitment to make fundamental changes in how they treat their own people, reduce their malign behavior, can agree that it's worthwhile to enter into a nuclear agreement that actually prevents proliferation, then the president said he's prepared to sit down and have the conversation with them.” Obviously, Pompeo just killed off President Trump’s offer.
At about the same time, the rial-dollar exchange rate fell to over 100,000 as Iranians continued their rush to get out of their own currency. When I left Iran in September 1979, 70 rials would buy a dollar. (I urged my Iranian friends to convert whatever rials they had into dollars.)
The widespread protests in Iran at the end of 2017 and periodically in 2018 were put down relatively easily by the Iranian police without the help of the Iranian Revolutionary Guard Corps or the Basij (the Mobilization). The Basij, the organizing and arming of neighborhood men by their local mosques, was crucial for suppressing the 2009 uprising. The regime has committed major resources to professionalizing the police and training them in riot control. The implication is that the regime has not only the will but the means of putting down any protests that arise from the widespread economic discontent. A significant analysis of the Iranian police by Saeid Golkar can be read at
Below is a response to my recent piece on Iran from Howard Rotblat-Walker, a PhD in Sociology from the University of Chicago whose thesis research was done in the bazaars of the Iranian city of Yazd and who recently returned from a trip through that country.
The heart of the U.S. administration is made up of anti-Iran hardliners.
*DOD Secretary Mattis: “Iran is the single most enduring threat to stability and peace in the Middle East” and not really a nation-state at all but “a revolutionary cause devoted to mayhem.” And of course, the more famous “the three gravest threats facing the United States are “Iran, Iran, and Iran.”
*NSA Chief John Bolton: “To Stop Iran’s Bomb, Bomb Iran.”
*State Secretary Pompeo: “The [Iranian] regime has been fighting all over the Middle East for years...After our sanctions come in force, it will be battling to keep its economy alive. Iran will be forced to make a choice: Either fight to keep its economy off life support at home or squander precious wealth on fights abroad. It will not have the resources to do both.”
And of course the Commander in Chief, President Trump: “My number one priority is to dismantle the disastrous deal with Iran.”
Their hostility - stemming from the Iranian revolution that overthrew the Shah in 1979; the seizure of U.S. citizens and their 444 day captivity; the killing of 241 U.S. military personnel when Hezbollah blew up the U.S. Marine barracks in Beirut in 1983; the 1991 car bombing of Khobar Towers in Saudi killing 19 U.S. airfare personnel and from many other causes — has now coalesced around a policy of forcing regime change in Iran.
Along with stringent new sanctions to crush the Iranian economy will come an all out information war directed at the Iranian people to turn against their regime and the initiation of U.S. and Israeli clandestine activities to mobilize anti-Islamic Republic groups within Iran.
This serious new chapter in U.S. foreign policy is now underway.
President Trump's initiation of a trade war with China will result in the U.S. and the American people as the ultimate losers. China is far better suited to withstand the pain of reduced exports to the U.S. than is the U.S. in its trade with China. To a significant extent, this is due to the authoritarian nature of the Chinese government and its ability to control its economy.
Is the failure of President Trump to understand the role of imports merely ignorance or willful obfuscation? If the latter, what could be his motive?
The Kimchi Matters: Global Business and Local Politics in a Crisis Driven World,
co-authors Daniel Lefkovitz and Sam Wilkin, Chicago: Agate Press, 2003
The Eastern European Opportunity, A Complete Guide and Sourcebook,
co-author Dwight Semler, New York: John Wiley and Sons, 1992
Majestic Failure: The Fall of the Shah,
Chicago: The University of Chicago Press, 1991
Khomeini and the Islamic Republic of Iran,
co-author Daniel Brumberg, Cambridge: Harvard Middle East Papers, 1987
The Political Elite of Iran.
Princeton: Princeton University Press, 1976
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