Germany’s current account surplus — the balance of all its transactions with the rest of the world — is the highest in the world. In 2018 it was $294 billion. Japan’s surplus was $173 billion. China’s was a paltry $49.1 billion in the same year (although non-official estimates put the actual number $1 billion higher). Meanwhile, the U.S. ran up a current account deficit of $478.6 billion. Germany’s staggering surplus reflects a basic truth about the country. Germans like to save. They don’t like to spend. Here is an explanation for why that is true….
——Marvin Zonis

The DSM is basically the ‘Bible’ of mental health professionals in the United States. "The Diagnostic and Statistical Manual of Mental Disorders (DSM–5) is the product of more than 10 years of effort by hundreds of international experts in all aspects of mental health. Their dedication and hard work have yielded an authoritative volume that defines and classifies mental disorders in order to improve diagnoses.” (https://www.psychiatry.org/psychiatrists/practice/dsm) Here, an MD takes the components of the DSM definition of an “Anti-Social Personality Disorder” and applies them to the long personal history of what we know about President Trump. The result produces the shocking realization that our President is emotionally impaired and a text book example of a DSM mental disorder. This diagnosis was made during the 2016 Presidential campaign. Nothing that characterizes the President since that campaign changes this diagnosis. The value of the diagnosis is that it helps us understand more of his behavior and contributes to better forecasts of what he is likely to to do in the future.
——Marvin Zonis

Past Saudi policies in Yemen are the most likely explanation for the slow rise of the Houthis and their anti-Saudi stance. For the last four years, the Saudis have waged war against them to diminish their control over much of the country. The war has accomplished at least three things. First, it has demonstrated the total incompetence of the Saudi military. The Saudi goal of becoming a major Middle Eastern power is now obviously an absurdity. Second, the Saudi bombing campaign has utterly pulverized Yemen while its blockade of the major port of Hodeidah has inflicted a humanitarian disaster by preventing food and medicine imports. Third, by ginning up what is basically a non-existent Iranian threat, the Saudis have managed to keep President Trump committed to the Saudi cause. All in all a disaster of the first order.
——Marvin Zonis

The Trump administration has just concluded a global conference held in Warsaw meant to ratchet up pressure on Iran. More than 60 nations attended although several major countries — particularly the Europeans -- refused to send their top diplomats. Vice President Pence set the conference tone by referring to the Iranian regime as “evil” and accusing them of planning a new Holocaust. While the conference was going on, another conference was being held in the same city, a conference organized by the Iranian opposition group, the Mujahedin-e Khalq or MEK. The MEK, apparently funded by the Saudis, is committed to the overthrow of Iran’s clerical regime. The highlight of their conference was a speech by President Trump’s lawyer, Rudy Giuliani. While President Trump claims regime change is not his goal in Iran, Giuliani’s speech signals otherwise.
——--Marvin Zonis

There are many ways in which government policies decrease inequality. Unfortunately, for those who believe America’s skyrocketing inequality is not only bad but even dangerous for the country, government tax policies actually increase inequality.
——Marvin Zonis

While the administration slams Iran for its domestic repression, nothing is heard of the abuse that Saudi Arabia imposes on its subjects. Since MBS — Muhammad Bin Salman — became Crown Prince, any sign of dissent in the Kingdom and any sign of criticism that comes from anyone but the Crown Prince has been ruthlessly suppressed. So women who advocated for the right for women to drive — a right granted by MBS - were imprisoned. Religious scholars with opinions contrary to MBS’ coterie of clerics get similar treatment. Here is the story of a cleric who has been outside the Saudi religious establishment and the price he and his family is paying for that independence.

(My sources in the Kingdom conform the essential authenticity of this piece.)

———Marvin Zonis

Something is clearly wrong in the U.S. Whether the statistics deal with life expectancy, social mobility, income inequality or a host of other factors, the statistics show the same thing — the majority of Americans are getting left behind. The two questions that need to be asked are “why has this come about?” and "what is to be done about it?” This article does not try to answer the first question. Instead it suggests that the American elite — made up largely of corporate executives plus some retired politicians, for example, Bill Clinton — are attempting solutions to the second question that may provide some amelioration of the problem but simultaneously preserve their own position at the top of the hierarchy. Instead, the author argues, both the analysis of the problem and the creation of solutions belong squarely in the political arena. Of course, if you believe as I do that the political arena has largely been captured by the same elite, the author’s “solution” is not going to work.
———Marvin Zonis

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 brendanbrown@monetaryscenarios.com.

——Marvin Zonis

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.
--Marvin Zonis

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
--Marvin Zonis

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.
——Marvin Zonis

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.
——Marvin Zonis

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.
--Marvin Zonis