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🚨🇨🇳 Forcing countries to use new currencies could have lasting consequences. Kenneth Rogoff, former IMF chief economist, says once businesses learn to operate outside the dollar, switching again becomes easier. That is how long-term shifts begin. Kenneth S Rogoff

59,835 次观看 • 3 个月前 •via X (Twitter)

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Japan was richer per capita than the US in the late 1980s. Today it sits at the bottom among developed countries. How does an economic superpower fall this far and never recover? Kenneth Rogoff (former Chief Economist of IMF) walked me through what he believes was a catastrophic mistake. In 1985, the US pressured Japan to rapidly strengthen the yen and liberalize its financial markets through the Plaza Accord. The yen doubled in value in just 3 years. To offset the economic shock, Japan slashed interest rates and flooded the economy with cheap credit. Japanese banks, suddenly freed from decades of tight regulation, went on a lending spree. They poured money into real estate and stocks with little risk assessment. Japan's stock market became worth more than the US stock market despite having half the population. The total value of Japanese real estate was 4 times the value of all US real estate. When the bubble burst in 1991, banks were left with massive bad loans. The entire financial system seized up, creating a "lost decade" of deflation and stagnation. Here's what stunned me: Rogoff estimates Japan would be 50% wealthier per person today without this crisis. I didn't grasp before this interview how devastating financial crises are. They don't just cause a temporary recession - they permanently alter a country's growth trajectory. Three decades later, Japan still hasn't recovered. Full interview with Kenneth S Rogoff out tomorrow.

Dwarkesh Patel

426,760 次观看 • 1 年前

🚨Peter Schiff: China🇨🇳 is silently dumping the dollar, a US🇺🇸 dollar crisis is coming soon! ‘China is gradually weaning themselves off of the dollar. That’s why, if you look at their holdings of US Treasuries, they’ve actually gone down a bit over the years. If you look at all the new Treasuries we’ve issued over the years, the fact that the Chinese haven’t bought any of them is a big deal because they used to be a main buyer of these assets. Instead of buying more Treasuries, they’ve bought more gold. So if you look at US dollar debt as a percentage of all the reserves the Chinese own, Treasuries are a much smaller percentage of their total reserves than they once were, especially if you consider the appreciation of gold. I would guess the reason they’re not moving more dramatically is because they probably don’t want to cause a crash, the dollar to implode, the Treasury market to implode, because they are trying to sell and want to get a decent price. So I think they’re happy to slowly bleed it off to try to get that good price. They just have to worry about the impact on the dollar, because if they try to dump too many dollars at once, the dollar could go down, and especially if a lot of other countries see that and want to get out. There could be a run on the dollar. If all the holders decide they want to get out, they don’t want to be the last one holding the dollar, and so it becomes a rush, and we could be in a US dollar crisis relatively soon anyway… I think we’re heading for a real crisis in the US, and I think countries that are smart would be trying to get ahead of that by selling whatever they can, as quietly as they can, out of US dollars and any US dollar-denominated debt.’ -Peter Schiff on Going Underground

Afshin Rattansi

107,856 次观看 • 6 个月前