Increasing numbers of national governments are abandoning the US sphere of influence. Opportunities from trade with Asia compare favourably with rising currency and banking risks in a dollar-centric world. Against an imploding banking system in long-established financial markets, China’s renminbi looks like a safe haven. Thanks to a savings-driven economy, China’s consumer price inflation remained very low, when those of the western alliance soared. Now we face a credit crunch, as banks struggle to reduce their operational gearing which has become uncomfortably high. Consequently, borrowing rates will be driven higher, taking interest rate control out of central banking hands. Higher … Continue reading →