vc43 Three outlooks of a crisis

The current crisis has three different outlooks.

The first is based on some sort of agreement between China and the US and their respective currencies, the Dollar and the Yuan. In fact, that would be an agreement between the world’s factory and the world’s biggest consumer. Today, US-China bilateral trade rounds 300 billion dollars. Thanks to its exports, China holds a massive 1,8 trillion Dollars in reserves, 500 billions of which is invested in US Treasury bonds. This puts the only superpower and its main competitor in a relationship of close interdependence.

The second outlook extends a possible agreement on the game rules to Russia and Europe – mostly Germany and France. Together with the US and China, these powers could craft a new Bretton Woods, that could come to light in the G8 summit of New York, at the end of November.

The third, most pessimistic scenario sees an increase in current unbalances and ongoing conflicts. That would be a highly risky situation, given the many nuclear powers that crowd the world’s scene.

Category:

News & Politics

Tags:

• US
• China
• crisis