https://www.scmp.com/rss/515789/feed The debt ceiling is the legal limit on the amount of money the US government can borrow. Since 1960, Congress has increased the debt ceiling 79 times - 49 times under Republican presidents and 30 times under Democratic presidents. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com SCMP Editorial SCMP Editorial The world might be going on a debt binge, but when it comes to government borrowing, the United States takes the cake. While other countries might owe more in percentage terms to their gross domestic product (GDP), the US owes more than anyone else in absolute terms. That is what makes it so dangerous to its creditors. Global debt hit a record high in 2025, reaching US$348 trillion, with nearly US$29 trillion of new debt added over the year, according to a study by the multinational Institute of... https://www.scmp.com/opinion/comment/article/3347289/us-debt-dysfunction-puts-global-economy-risk?utm_source=rss_feed https://www.scmp.com/opinion/comment/article/3347289/us-debt-dysfunction-puts-global-economy-risk?utm_source=rss_feed Sat, 21 Mar 2026 23:15:08 +0000 Frank Chen Frank Chen The United States’ rapidly mounting sovereign debt pile – which reached an unprecedented US$39 trillion on Wednesday – is becoming “alarmingly unsustainable” and a potential threat to the global economy, with spending likely to spiral even further amid the Iran war, analysts said. It remains unclear whether US President Donald Trump has the political will to rein in borrowing, despite promising to eliminate the national debt while campaigning for office in 2016, and other countries including... https://www.scmp.com/economy/global-economy/article/3347192/us-federal-debt-becoming-alarmingly-unsustainable-iran-war-fuels-spending-analysts?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3347192/us-federal-debt-becoming-alarmingly-unsustainable-iran-war-fuels-spending-analysts?utm_source=rss_feed Fri, 20 Mar 2026 02:00:10 +0000 Carol Yang Carol Yang As the United States grapples with mounting debt, China is doubling down on efforts to clean up its own balance sheet, vowing to tackle risks with “iron discipline”. The pledge came as the world’s second-largest economy weathers a years-long real estate slump and cooling domestic demand. Beijing faces growing pressure to balance short-term growth targets with longer-term deleveraging, as it seeks to transition to a more sustainable economy. In the government work report delivered on Thursday to... https://www.scmp.com/economy/china-economy/article/3345587/china-pledges-iron-discipline-tackle-debt-risks-us-borrowing-under-trump-surges?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3345587/china-pledges-iron-discipline-tackle-debt-risks-us-borrowing-under-trump-surges?utm_source=rss_feed Thu, 05 Mar 2026 11:00:11 +0000 Mia Nurmamat Mia Nurmamat Global debt climbed to a record high in 2025, rising at the fastest pace since the pandemic, with China and the United States accounting for a large share of the increase, according to a new report. Total global debt surged to US$348 trillion last year, with nearly US$29 trillion of new debt added over the year, the Institute of International Finance (IIF) said. Government borrowing accounted for more than US$10 trillion of the increase, with the United States, China and the euro zone together... https://www.scmp.com/economy/china-economy/article/3344903/global-debt-soars-us29-trillion-us-china-drive-rapid-build-report?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3344903/global-debt-soars-us29-trillion-us-china-drive-rapid-build-report?utm_source=rss_feed Fri, 27 Feb 2026 12:00:17 +0000 Sylvia Ma Sylvia Ma US President Donald Trump’s nomination of Kevin Warsh to head the Federal Reserve is unlikely to support a sustained rebound in the US dollar despite the possibility of short-term relief, Chinese economists said. Persistent doubts about the Fed’s autonomy during Trump’s second term could cap any durable recovery, as policy appeared increasingly geared towards domestic goals at the expense of the US dollar’s role as a global public good, they added. Concerns over the central bank’s independence... https://www.scmp.com/economy/global-economy/article/3342106/america-first-fed-chinese-economists-doubt-trumps-chair-nominee-can-shore-us-dollar?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3342106/america-first-fed-chinese-economists-doubt-trumps-chair-nominee-can-shore-us-dollar?utm_source=rss_feed Mon, 02 Feb 2026 11:00:15 +0000 Xinyi Wu Xinyi Wu China trimmed its holdings of US Treasuries in November to the lowest level since 2008, diverging from a global trend that saw total foreign ownership of the debt instruments hit a record high. Analysts say the prospect of a politicised Federal Reserve chairmanship under Donald Trump’s presidency has deepened Beijing’s concerns over its exposure to American debt, with more cuts expected. Beijing’s stockpile fell to US$682.6 billion in November, down from US$688.7 billion in October, according to... https://www.scmp.com/economy/global-economy/article/3340164/china-dumps-more-us-debt-buys-other-assets-trump-targets-powell?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3340164/china-dumps-more-us-debt-buys-other-assets-trump-targets-powell?utm_source=rss_feed Fri, 16 Jan 2026 13:00:09 +0000 Chow Chung-yan Chow Chung-yan In today’s chaotic world, we can sum up the shift in the global economy and geopolitics with a single number: 1 trillion. The year 2024 will be remembered as the first time in history that a national government’s interest payments on its debt exceeded US$1 trillion, according to data from the Federal Reserve Bank of St Louis. Despite US President Donald Trump’s pledge to cut federal spending and his aggressive global trade war, the United States is now adding US$1 trillion in national debt every... https://www.scmp.com/news/china/diplomacy/article/3339507/forget-venezuela-and-greenland-here-real-trillion-dollar-question?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3339507/forget-venezuela-and-greenland-here-real-trillion-dollar-question?utm_source=rss_feed Mon, 12 Jan 2026 01:00:15 +0000 Massoud Amin Massoud Amin Donald Trump’s return to the presidency didn’t just shift US politics. It triggered a systemic stress test of the American republic. Constitutional, strategic, technological, fiscal and civic stabilisers are under simultaneous strain. Whether the United States adapts or drifts will shape the character of its institutions for decades. The most visible stress is constitutional. Early directives concentrated authority in the executive branch. Oversight officials have been removed, independent... https://www.scmp.com/opinion/world-opinion/article/3328276/will-us-republic-survive-stress-test-trumps-presidency?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3328276/will-us-republic-survive-stress-test-trumps-presidency?utm_source=rss_feed Sun, 12 Oct 2025 12:30:15 +0000 Haining Gao Haining Gao – https://www.scmp.com/plus/article/3328460/china-sells-us-treasuries-buys-gold?utm_source=rss_feed https://www.scmp.com/plus/article/3328460/china-sells-us-treasuries-buys-gold?utm_source=rss_feed Fri, 10 Oct 2025 03:49:28 +0000 Xinyi Wu Xinyi Wu As China works to defuse its debt risks, and with unchained US borrowing rocketing skyward, Ray Dalio finds himself at the centre of an important conversation in Beijing – advising top officials as they face a delicate path ahead. Chinese officials rolled out the red carpet this week for the billionaire investor and founder of Bridgewater Associates – one of the world’s largest hedge funds – as his words of caution on the risks facing major global economies appear to be increasingly resonating... https://www.scmp.com/economy/china-economy/article/3326700/china-ray-dalio-discusses-global-debt-issues-beijing-seeks-his-counsel?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3326700/china-ray-dalio-discusses-global-debt-issues-beijing-seeks-his-counsel?utm_source=rss_feed Wed, 24 Sep 2025 11:00:10 +0000 Sylvia Ma Sylvia Ma Concerns over China’s local-level debt have long loomed large in international discourse, with a mountain of “hidden” debt viewed as a “ticking time bomb” that threatens to trigger a cascade of defaults while posing a risk to financial stability. But some experts now contend that, after a sweeping debt-restructuring campaign, the outlook for China is shifting. And they say that, by comparison, the debt challenges facing the United States are causing considerable alarm. “After years of effort,... https://www.scmp.com/economy/china-economy/article/3321048/china-defuses-its-time-bomb-debt-us-hears-ticking-intensify?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3321048/china-defuses-its-time-bomb-debt-us-hears-ticking-intensify?utm_source=rss_feed Thu, 07 Aug 2025 06:01:14 +0000 Sylvia Ma Sylvia Ma A prominent Chinese economist has pushed back against Bridgewater Associates founder Ray Dalio’s views on the debt situations in China and the United States, as debate over the fiscal directions of the world’s two largest economies heats up. Xu Gao, chief economist at Bank of China International (China), said in a recent 9,000-word article that Dalio was mistaken in calling for China to deleverage, arguing that such a view “misjudges” the country’s debt dynamics. “China’s recent debt-rollover... https://www.scmp.com/economy/global-economy/article/3319988/why-did-chinese-economist-slam-ray-dalios-assessment-debt-situations-us-china?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3319988/why-did-chinese-economist-slam-ray-dalios-assessment-debt-situations-us-china?utm_source=rss_feed Tue, 29 Jul 2025 14:00:12 +0000 Ken Ip Ken Ip Imagine a 500lbs man. Eighty per cent body fat. His arteries are clogged, his heart is on the blink. A doctor tells him to do 100 burpees a day to save his life. It’s not bad advice – burpees are great for losing weight – but let’s be honest. The man can’t even kneel, let alone jump. The method isn’t wrong. It’s just impossible. That man is the US economy. And the debt – all US$36.65 trillion of it – is the fat. Let’s cut through the noise. Recent headlines have been about the supposed feud... https://www.scmp.com/opinion/world-opinion/article/3319137/debt-bloated-us-stablecoin-new-financial-weapon-making?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3319137/debt-bloated-us-stablecoin-new-financial-weapon-making?utm_source=rss_feed Wed, 23 Jul 2025 08:30:08 +0000 Bloomberg Bloomberg US President Donald Trump’s recently enacted tax and spending law will add US$3.4 trillion to US deficits over a decade and leave millions without healthcare coverage, according to a new estimate from the non-partisan Congressional Budget Office. The CBO score for the law, released on Monday, reflects a US$4.5 trillion decrease in revenues and a US$1.1 trillion decline in spending until 2034, relative to a current-law baseline. The new analysis does not incorporate so-called dynamic effects,... https://www.scmp.com/news/world/united-states-canada/article/3319065/trump-tax-law-add-us34-trillion-us-deficits-leave-millions-without-health-cover?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3319065/trump-tax-law-add-us34-trillion-us-deficits-leave-millions-without-health-cover?utm_source=rss_feed Mon, 21 Jul 2025 19:56:17 +0000 Sylvia Ma Sylvia Ma China trimmed its US Treasury holdings for a third straight month in May, amid escalating trade tensions with Washington and mounting concerns over a sweeping tax and spending bill. Beijing’s holdings fell to US$756.3 billion from US$757.2 billion in April, according to US Treasury Department data. That was the lowest level since March 2009, based on figures compiled by Wind. The decline has continued since March, when China dropped to third place among foreign holders, behind Japan and the... https://www.scmp.com/economy/china-economy/article/3318694/china-cuts-us-treasury-holdings-third-month-amid-trade-war-debt-ceiling-fears?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3318694/china-cuts-us-treasury-holdings-third-month-amid-trade-war-debt-ceiling-fears?utm_source=rss_feed Fri, 18 Jul 2025 08:00:15 +0000 Orange Wang Orange Wang US President Donald Trump’s latest tax and spending act might “cause some trouble” for China, according to analysts. However, they also said Beijing may be able to benefit in certain areas if the act – known officially as the One Big Beautiful Bill – generates further political instability and damages domestic industries such as the US clean energy sector. The act aims to make permanent tax cuts, lock in Trump’s priorities on border and defence financing, increase Washington’s debt limit by US$5... https://www.scmp.com/news/china/diplomacy/article/3317588/will-trumps-big-beautiful-bill-offer-opportunities-china?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3317588/will-trumps-big-beautiful-bill-offer-opportunities-china?utm_source=rss_feed Wed, 09 Jul 2025 14:00:09 +0000 Desmond Lachman Desmond Lachman When he was France’s finance minister in the 1960s, former French president Valéry Giscard d’Estaing famously complained about the “exorbitant privilege” that the dollar’s position as the world’s leading reserve currency conferred on the United States. This meant, essentially, that the US could borrow at low interest rates, run persistently large trade deficits and print money to finance its budget deficits. He never could have imagined the US would end up letting these advantages slip through... https://www.scmp.com/opinion/world-opinion/article/3317284/trump-single-handedly-slaughtering-americas-exorbitant-privilege?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3317284/trump-single-handedly-slaughtering-americas-exorbitant-privilege?utm_source=rss_feed Tue, 08 Jul 2025 06:30:11 +0000 Sylvia Ma Sylvia Ma The passage of a sprawling budget bill has raised concerns over the long-term debt of the United States, which analysts said could compound already heightened worries over the reliability of the country’s currency as a safe-haven asset. Winning a narrow 218-214 vote in the House of Representatives on Thursday, the “One Big Beautiful Bill Act” – which raises spending on border security and defence while making the record tax cuts enacted in 2017 permanent – now heads to US President Donald Trump... https://www.scmp.com/economy/global-economy/article/3316991/did-trump-get-his-big-beautiful-bill-us-dollars-expense?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3316991/did-trump-get-his-big-beautiful-bill-us-dollars-expense?utm_source=rss_feed Fri, 04 Jul 2025 11:30:13 +0000 Leopold Chen,Mandy Zuo Leopold Chen,Mandy Zuo With the US Senate voting to move an updated version of US President Donald Trump’s sweeping budget legislation – the “One Big, Beautiful Bill Act” – forward in the legislative process, the controversial bill now comes closer to becoming law. It has also brought the country’s mounting debt back into the spotlight. Rife with spending increases, tax cuts and no additional revenue sources to compensate, the bill has been estimated to add US$3.3 trillion to the nation’s debt over the next decade; a... https://www.scmp.com/economy/global-economy/article/3316399/trumps-big-beautiful-bill-debt-bomb-can-pennsylvania-plan-defuse-it?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3316399/trumps-big-beautiful-bill-debt-bomb-can-pennsylvania-plan-defuse-it?utm_source=rss_feed Mon, 30 Jun 2025 11:00:01 +0000 Haining Gao Haining Gao / https://www.scmp.com/plus/article/3316013/chinese-sell-us-treasuries?utm_source=rss_feed https://www.scmp.com/plus/article/3316013/chinese-sell-us-treasuries?utm_source=rss_feed Fri, 27 Jun 2025 02:08:08 +0000 Ji Siqi Ji Siqi China reduced its stockpile of US Treasuries to a 16-year low in April, as an escalating trade war with Washington sparked concerns about the long-standing status of American government bonds as the world’s safest asset. Beijing’s holdings dropped to US$757 billion, down US$8.2 billion from March, according to the latest data released by the US Treasury Department. The figures for April marked the second consecutive month of decline and the lowest level since March 2009, according to data... https://www.scmp.com/economy/china-economy/article/3315093/china-cuts-us-treasury-stockpiles-16-year-low-amid-trumps-trade-war?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3315093/china-cuts-us-treasury-stockpiles-16-year-low-amid-trumps-trade-war?utm_source=rss_feed Thu, 19 Jun 2025 13:00:11 +0000 Reuters Reuters US President Donald Trump’s sweeping tax-cut bill, which had been stalled for days by Republican infighting over spending cuts, won approval from a key congressional committee on Sunday in a rare victory for Trump and House Speaker Mike Johnson. At an unusual Sunday night session, four hardline Republican conservatives on the House Budget Committee, who had blocked the legislation on Friday, allowed the bill to move forward as they pressed for deeper spending cuts in closed-door talks with... https://www.scmp.com/news/world/united-states-canada/article/3310876/trumps-big-tax-cut-bill-advances-debt-concerns-mount?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3310876/trumps-big-tax-cut-bill-advances-debt-concerns-mount?utm_source=rss_feed Mon, 19 May 2025 05:54:18 +0000 Bloomberg Bloomberg Investors faced yet another bumpy start to the trading week with US assets coming under fresh pressure, although it’s mounting concern over American debt rather than tariffs generating volatility this time. Longer-dated Treasuries dipped with US equity futures and the dollar in early Asia trading after Moody’s Ratings announced on Friday evening it was stripping the American government of its top credit rating, dropping the country to Aa1 from AAA. The company, which trailed rivals, blamed... https://www.scmp.com/business/markets/article/3310872/moodys-downgrade-us-debt-fears-unsettle-markets-reviving-mini-sell-america-trade?utm_source=rss_feed https://www.scmp.com/business/markets/article/3310872/moodys-downgrade-us-debt-fears-unsettle-markets-reviving-mini-sell-america-trade?utm_source=rss_feed Mon, 19 May 2025 04:45:42 +0000 Winston Mok Winston Mok It was financial markets that checked one of US President Donald Trump’s excesses: his unilateral tariffs targeting much of the world. It wasn’t just the US stock market, whose declines were expected. What probably caused Trump to blink was the rapidly climbing yield of 10-year US Treasury bonds. From around 4 per cent on April 4, it approached 4.5 per cent in a week. The US dollar has also depreciated against other currencies since its peak in January. A falling stock market usually results in... https://www.scmp.com/opinion/world-opinion/article/3309676/trump-team-risking-us-exorbitant-privilege-short-term-theatrics?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3309676/trump-team-risking-us-exorbitant-privilege-short-term-theatrics?utm_source=rss_feed Tue, 13 May 2025 08:30:08 +0000 DeepSeek has unravelled the assumption that a few hyperscalers will dominate the artificial intelligence market, extracting payments from an AI-dependent global economy. The Chinese company’s open-source program lets businesses develop their own applications without having to pay anyone. The revenue assumption of hundreds of billions of dollars that underpins hyperscalers is looking like hot air. The US economy depends on its buoyant stock market which, at twice the value of its gross domestic... https://www.scmp.com/opinion/china-opinion/article/3298748/how-deepseeks-disruption-could-finally-burst-us-stock-bubble?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3298748/how-deepseeks-disruption-could-finally-burst-us-stock-bubble?utm_source=rss_feed Tue, 18 Feb 2025 21:30:08 +0000 “Speak softly and carry a big stick”, a phrase attributed to former US president Theodore Roosevelt, is often cited as advice on the art of diplomacy. By contrast, Donald Trump speaks loudly but it may not be long before financial markets undermine his ability to wield a “big stick”. Maintaining a dominant military presence around the world, as the US has done for decades, is an expensive proposition and when financing it is dependent largely upon borrowing, the indebted country’s hold on the... https://www.scmp.com/opinion/world-opinion/article/3298494/trumps-big-stick-diplomacy-wont-go-far-todays-world-system?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3298494/trumps-big-stick-diplomacy-wont-go-far-todays-world-system?utm_source=rss_feed Sat, 15 Feb 2025 08:30:08 +0000 With the return of the highly unpredictable Donald Trump as US president in January next year, how should one manage the coming risks? Risk can be defined as the possibility of the occurrence of an event or condition that would negatively affect our well-being. One scans for risks to try to avoid or mitigate them. The first thing to remember is that risk cannot be eliminated; it can only be managed or hedged. In a static zero-sum system, one man’s risk is another man’s opportunity. If you... https://www.scmp.com/opinion/world-opinion/article/3291522/world-fraught-risk-trump-will-add-bumps?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3291522/world-fraught-risk-trump-will-add-bumps?utm_source=rss_feed Fri, 20 Dec 2024 12:30:07 +0000 What could Donald Trump’s victory in the US presidential election mean for the American and global economies? In a December 2016 commentary titled “The Trump Boom?”, I argued that, despite concerns about Trump’s personality and economic policies, it was entirely plausible that the United States could experience robust gross domestic product growth – albeit with a risk of higher inflation. For the “crime” of trying to be objective and suggesting the US economy might perform well under Trump, I... https://www.scmp.com/opinion/world-opinion/article/3290760/why-trump-economic-boom-much-less-likely-time-around?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3290760/why-trump-economic-boom-much-less-likely-time-around?utm_source=rss_feed Tue, 17 Dec 2024 12:30:07 +0000 Over the past week, around 15,000 people, including heads of state and ministers, representing more than 190 countries have gathered in Cali, Colombia, for the Cop16 UN Biodiversity Conference. The setting is apposite: Colombia is one of the world’s most biodiverse countries. If the honourable aims of the 16th Conference of the Parties – to settle national biodiversity strategies and action plans, reform the global food system, which is the single biggest driver of biodiversity loss, and find... https://www.scmp.com/opinion/world-opinion/article/3283704/cash-strapped-west-will-ignore-calls-protect-biodiversity?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3283704/cash-strapped-west-will-ignore-calls-protect-biodiversity?utm_source=rss_feed Fri, 25 Oct 2024 08:30:08 +0000 Former US president Donald Trump wrongly believes America’s trade deficit is an urgent economic problem. Worse, his preferred corrective – wide-ranging import tariffs – would damage the US and world economies, while diverting attention from the US deficit that matters. The external trade balance is what a country earns from exports minus what it spends on imports. Last year, the US trade deficit was nearly 3 per cent of its gross domestic product. For comparison, the trade deficit averaged 2.82... https://www.scmp.com/opinion/world-opinion/article/3273298/trumps-tariffs-wont-tackle-us-deficit-really-matters?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3273298/trumps-tariffs-wont-tackle-us-deficit-really-matters?utm_source=rss_feed Tue, 06 Aug 2024 06:45:11 +0000 To paraphrase prose written by American poet Carl Sandburg, money is power, freedom, a cushion and the root of all evil. Since the pseudonymous Satoshi Nakamoto created bitcoin cryptocurrency in 2009, techies today can create money, somewhat eroding the legal power of central banks to create fiat money. Few doubt that the mighty American empire is founded on the power of the United States dollar. Not only is the US able to create that currency, it has the power to sanction anyone using it,... https://www.scmp.com/opinion/world-opinion/article/3271727/how-americas-national-debt-has-become-worlds-liability?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3271727/how-americas-national-debt-has-become-worlds-liability?utm_source=rss_feed Fri, 26 Jul 2024 08:30:11 +0000 For some two and a half years now the rest of the world has watched with a mixture of wonderment and envy as the US economy has gone on churning out more jobs, higher consumer spending and relatively strong growth, so much so that inflation became a problem. Where did all this growth come from? Was it simply that the world’s largest economy is better managed than those elsewhere? The Biden administration, which has presided over this extended growth period, would certainly like us to believe... https://www.scmp.com/opinion/world-opinion/article/3270948/us-must-ground-its-economic-policy-reality-sooner-rather-later?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3270948/us-must-ground-its-economic-policy-reality-sooner-rather-later?utm_source=rss_feed Sat, 20 Jul 2024 21:30:14 +0000 This time last year, the consensus of the world’s leading economists and economic institutions was virtually for a deep recession, continuing into 2024. By March, economist Nouriel Roubini was warning of “the mother of all debt crises”. “We’re moving from the great moderation to the great stagflationary debt crisis and instability,” he said. In April, the International Monetary Fund judged that “risks are firmly on the downside”. What has happened since, that forecasters are now predicting a... https://www.scmp.com/comment/opinion/article/3247313/no-recession-2023-its-not-yet-time-breathe-sigh-relief?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3247313/no-recession-2023-its-not-yet-time-breathe-sigh-relief?utm_source=rss_feed Fri, 05 Jan 2024 06:30:21 +0000 China’s economy is more sustainable precisely because it is deflating its bubbles, while a US economy that continues to rely on an expanding debt bubble can only be headed for a cliff. For the first three quarters of this year, China’s growth of 5.2 per cent came from improving efficiency on the supply side; in the US, growth came on the back of its fiscal deficit increasing sharply as a proportion of its gross domestic product. Yet there is manufactured consensus in the West that China’s... https://www.scmp.com/comment/opinion/article/3242206/booming-us-economy-and-chinese-crash-think-again?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3242206/booming-us-economy-and-chinese-crash-think-again?utm_source=rss_feed Tue, 21 Nov 2023 11:00:08 +0000 Moody’s on Friday changed its outlook on the US credit rating from “stable” to “negative”, citing large fiscal deficits and a decline in debt affordability. The move follows a rating downgrade of the sovereign by another rating agency, Fitch, earlier this year, which came after months of political brinkmanship around the US debt ceiling. Federal spending and political polarisation have been a rising concern for investors, contributing to a sell-off that took US government bond prices to their... https://www.scmp.com/news/world/united-states-canada/article/3241167/moodys-downgrades-outlook-us-credit-rating-stable-negative?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3241167/moodys-downgrades-outlook-us-credit-rating-stable-negative?utm_source=rss_feed Fri, 10 Nov 2023 23:32:05 +0000 The escalating war in the Middle East could be the straw that breaks the back of the US dollar super bubble. As oil prices rise and the US budget deficit widens, bond yields will surge. This is likely to pop the stock and property bubbles in the US, then everywhere else. China’s surging trade surplus and wage inflation will only add pressure to its unofficial dollar peg. Once that “peg” breaks, the dollar will collapse. There is little doubt the US is experiencing a super bubble. Its asset... https://www.scmp.com/comment/opinion/article/3239054/dollar-super-bubble-may-finally-be-popped-israel-gaza-war?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3239054/dollar-super-bubble-may-finally-be-popped-israel-gaza-war?utm_source=rss_feed Thu, 26 Oct 2023 06:15:11 +0000 Overshadowed by the Gaza conflict, over the past week of outpourings from the International Monetary Fund’s annual meetings in Marrakech, the irresistible pressure has been towards doom and caution. Severe shocks were “becoming the new normal for a world that is weakened by weak growth and economic fragmentation”, said IMF managing director Kristalina Georgieva. “Successive shocks since 2020 have pushed global output down by US$3.6 trillion as of this year.” This, according to the IMF, was... https://www.scmp.com/comment/opinion/article/3237966/imf-world-bank-make-desperate-call-cooperation-anybody-listening?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3237966/imf-world-bank-make-desperate-call-cooperation-anybody-listening?utm_source=rss_feed Sun, 15 Oct 2023 11:30:07 +0000 Pride comes before a fall, it is said, and the mixture of arrogance and complacency which the United States is displaying at present with regard to the state of its public finances suggests that it could trip up badly before long. It almost seems to be courting disaster wilfully. To shrug off a government debt downgrade just when many other countries are anxious to lessen their dependence on the massive US government securities market and on the US dollar seems perverse in the extreme. Even so,... https://www.scmp.com/comment/opinion/article/3231499/us-ignores-fitch-credit-rating-downgrade-its-own-peril?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3231499/us-ignores-fitch-credit-rating-downgrade-its-own-peril?utm_source=rss_feed Sat, 19 Aug 2023 17:00:13 +0000 The US Federal Reserve will next meet on June 13-14 to discuss monetary policy. For the first time since the rate-raising cycle began in March 2022, the discussion is likely to revolve around whether to stop raising interest rates. Economic data, the vulnerability of the banking sector and the US government debt ceiling saga all influence the decision. The Fed could opt to leave rates unchanged – but there is a growing probability that this would just be a pause, rather than the end of the... https://www.scmp.com/comment/opinion/article/3223370/us-inflation-jobs-report-show-fed-cant-just-stick-autopilot-interest-rate-rises?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3223370/us-inflation-jobs-report-show-fed-cant-just-stick-autopilot-interest-rate-rises?utm_source=rss_feed Fri, 09 Jun 2023 13:15:14 +0000 There is an odious American political mythology concerning bipartisanship, according to which bitter adversaries, scarred by battle, find common ground, join hands and stroll off together into the sunset. It is mostly hokum. Ulysses S. Grant did not reconcile with Robert E. Lee after Appomattox. Franklin D. Roosevelt did not reconcile with Herbert Hoover during the Great Depression, nor John F. Kennedy with Richard Nixon after the 1960 election. One does hear sugary reminiscences of Ronald... https://www.scmp.com/comment/opinion/article/3223234/democrats-disastrous-us-debt-ceiling-deal-snatches-defeat-jaws-victory?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3223234/democrats-disastrous-us-debt-ceiling-deal-snatches-defeat-jaws-victory?utm_source=rss_feed Wed, 07 Jun 2023 13:30:11 +0000 Catastrophe averted? From the narrow perspective of global financial market stability, yes. Knowing that left-flank Democrats such as Representative Pramila Jayapal of Washington and Senator Elizabeth Warren of Massachusetts would almost certainly oppose the US debt ceiling deal that President Joe Biden struck with House Speaker Kevin McCarthy, Republicans could have pushed the US and global economies off a cliff by sticking together. They didn’t, though. This is an important development in the... https://www.scmp.com/comment/opinion/article/3222964/mainstream-republicans-choosing-us-debt-ceiling-deal-over-global-economic-chaos-welcome-sign-sanity?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3222964/mainstream-republicans-choosing-us-debt-ceiling-deal-over-global-economic-chaos-welcome-sign-sanity?utm_source=rss_feed Mon, 05 Jun 2023 17:30:09 +0000 When the fog of global gloom gets too hard to bear, my thoughts often flicker back to Monty Python’s 1979 epic Life of Brian and Eric Idle tied to a cross in Golgotha singing: “Always look on the bright side of life”. Even in the wake of the Covid-19 pandemic, amid US debt crisis negotiations, fears of recession, Russia’s assault on Ukraine, the deepening US-China conflict, glacial progress in addressing climate change, Idle can still induce a wry, if grim, smile. But there are more constructive... https://www.scmp.com/comment/opinion/article/3222635/despite-war-climate-fears-and-economic-woes-life-really-getting-better?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3222635/despite-war-climate-fears-and-economic-woes-life-really-getting-better?utm_source=rss_feed Fri, 02 Jun 2023 07:45:14 +0000 US President Joe Biden hailed a “big win” for Americans and the US economy after the Senate voted to pass legislation to lift the government’s US$31.4 trillion debt ceiling, avoiding a catastrophic sovereign default. Passing 63 to 36 votes in the Senate on Thursday, the bill heads to Biden, who had brokered the debt deal with Republican House Speaker Kevin McCarthy. Biden had urged lawmakers to get the bill to his desk to sign in time to avoid a first-ever US default that could have come as... https://www.scmp.com/news/world/united-states-canada/article/3222678/us-senate-passes-debt-ceiling-deal-averting-catastrophic-default?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3222678/us-senate-passes-debt-ceiling-deal-averting-catastrophic-default?utm_source=rss_feed Fri, 02 Jun 2023 03:02:55 +0000 Kevin McCarthy earned his stripes as Republican speaker of the US House of Representatives on Wednesday, navigating fierce hardline opposition to pass a debt ceiling bill containing federal spending limits that President Joe Biden for months vowed to resist. Six months after he endured 15 humiliating floor votes just to be elected speaker, McCarthy proved capable of dragging Biden into negotiations over spending and other Republican priorities, and then marshalling two-thirds of his often... https://www.scmp.com/news/world/united-states-canada/article/3222565/mccarthys-moment-us-debt-win-secures-republican-house-speakers-standing?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3222565/mccarthys-moment-us-debt-win-secures-republican-house-speakers-standing?utm_source=rss_feed Thu, 01 Jun 2023 06:23:20 +0000 The US House of Representatives on Wednesday passed a bill to suspend the country’s debt ceiling and set federal spending limits, putting it on course to avert a looming sovereign default that was days away. House Speaker Kevin McCarthy managed to tamp down strident opposition to the bill from hard-right Republicans who were unable to prevent it from coming to the chamber’s floor, where it passed 314 to 117, with 71 members of the speaker’s party voting against it. “Tonight, we all made history... https://www.scmp.com/news/china/article/3222524/us-debt-ceiling-deal-house-passes-bill-over-hard-right-republican-opposition-senate-next-vote?utm_source=rss_feed https://www.scmp.com/news/china/article/3222524/us-debt-ceiling-deal-house-passes-bill-over-hard-right-republican-opposition-senate-next-vote?utm_source=rss_feed Thu, 01 Jun 2023 01:30:47 +0000 United States President Joe Biden and Republican House speaker Kevin McCarthy appear to have reached a deal over the so-called debt ceiling that threatened a sovereign default for the world’s richest country. The two sides may have avoided a self-inflicted calamity, but it will come at a significant cost as foreign countries and investors are left flabbergasted by the domestic political dysfunction of the United States. Republicans have made the fight about excessive borrowing by the government,... https://www.scmp.com/comment/opinion/article/3222512/us-debt-drama-comes-human-cost?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3222512/us-debt-drama-comes-human-cost?utm_source=rss_feed Wed, 31 May 2023 18:27:07 +0000 US House Speaker Kevin McCarthy dismissed threats from Republican hardliners to oust him over the debt-limit deal he forged with President Joe Biden and expressed confidence that lawmakers will pass legislation in time to avert a US default. The bill, heading for a House vote on Wednesday evening (Thursday morning Hong Kong time), prompted Republican congressman Dan Bishop to call for a vote on removing McCarthy as speaker, claiming that the deal granted too many concessions to... https://www.scmp.com/news/world/united-states-canada/article/3222388/kevin-mccarthy-confident-us-debt-vote-despite-threat-hardline-republicans-oust-him?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3222388/kevin-mccarthy-confident-us-debt-vote-despite-threat-hardline-republicans-oust-him?utm_source=rss_feed Wed, 31 May 2023 03:51:40 +0000 Jacob, a management trainee in Singapore, visits neighbouring Malaysia about once a month for activities such as car shows, road trips or just a midnight snack. The Singapore dollar hitting an all-time high against the ringgit last week prompted a change of heart. “I’ve changed more spare ringgit at such a good rate, I probably wouldn’t mind popping in when I’m free and there’s no [traffic] jam,” said Jacob, who declined to give his full name. Communications specialist Haikel Fahim, who crosses... https://www.scmp.com/week-asia/economics/article/3222343/its-lot-cheaper-singaporeans-plan-holidays-malaysian-ringgit-plunges-amid-us-debt-woes?utm_source=rss_feed https://www.scmp.com/week-asia/economics/article/3222343/its-lot-cheaper-singaporeans-plan-holidays-malaysian-ringgit-plunges-amid-us-debt-woes?utm_source=rss_feed Tue, 30 May 2023 12:35:42 +0000 The White House and Republican congressional leaders geared up lobbying campaigns to win approval of a deal to avert a US default as environmentalists, defence hawks and conservative hardliners condemned concessions. President Joe Biden’s cabinet members and senior White House staff already had made individual lobbying calls to at least 60 House Democrats by early Monday morning to press them for votes in favour, a Democratic official said. Both Biden and Republican House Speaker Kevin McCarthy... https://www.scmp.com/news/world/united-states-canada/article/3222242/joe-biden-and-kevin-mccarthy-push-votes-spending-deal-us-debt-default-looms?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3222242/joe-biden-and-kevin-mccarthy-push-votes-spending-deal-us-debt-default-looms?utm_source=rss_feed Mon, 29 May 2023 19:10:56 +0000 US President Joe Biden has reportedly struck a tentative deal with Republican House Speaker Kevin McCarthy to hopefully avoid a devastating debt default before the government runs out of money in little more than a week’s time. The deal still needs approval from a divided US Congress. However, the markets should be relieved that a truce has been reached in principle on raising the government’s US$31.4 trillion debt ceiling limit. It’s a crisis that should never have happened in the first place.... https://www.scmp.com/comment/opinion/article/3222157/even-tentative-us-debt-ceiling-deal-washington-needs-reform-or-dollar-will-suffer?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3222157/even-tentative-us-debt-ceiling-deal-washington-needs-reform-or-dollar-will-suffer?utm_source=rss_feed Mon, 29 May 2023 12:15:15 +0000