And escalatory because it is clearly potentially putting at play forces that could that if there's a miscalculation could - could make things much, much more dangerous.Īnd the next question you're gonna ask me is, have we changed our strategic deterrent posture. We believe that this is not only an unnecessary step for him to take but an escalatory one, unnecessary because Russia has not ever been under threat by the west or by NATO and certainly wasn't under any threat by Ukraine. We have no reason to doubt the validity of these reports. We - so, again, I'm on background to Senior Defense Official. Before I go in with the sort of situational update as we see it, I know that the first question I'm going to get asked is about this order by Mr. It's SDO, sorry to be a couple minutes late here, spent the last five minutes just trying to figure out how to use the phone system and dial the 10 different numbers that needed to dial to get in here. Please use THIS LINK from Interactive Brokers to register for the webinar.SENIOR DEFENSE OFFICIAL (SDO): Good morning, everybody. Blog members are more than welcome to join us tomorrow (April 7) at noon EST to see what today’s platform data tells us about tomorrow’s policy trajectories. Our PolicyScope platform will capture every incremental move as the pandemic peaks and then again when the economy is ready to return to normal.Īn earlier version of this post originally appeared at Traders Insight hosted by our strategic partners at Interactive Brokers in order to promote tomorrow’s webinar with them. The trade and fiscal policy arenas will likely see the most action in the near-term. The next moves will likely be technical and incremental in most areas. Policymakers can continue to relax rules and stay within DEFCON 4 for quite some time. As we noted in this research note for the Mercatus Center last week, the time has come for trade ministers to take comparably broad and bold action to their fiscal, monetary, and financial regulations colleagues. This increases the risk of deep supply chain ruptures that will be far more difficult to address. Extended periods to clear shipments at the dock and at border crosses create non-tariff barriers to imports that exacerbate supply chain tensions. In the current situation, selected decreases in import tariffs by some countries has been offset by the proliferation of export bans from 80+ countries with respect to medical equipment and, last week, some agricultural products. As noted recently, policymaking at the base of Maslow’s Hierarchy of Needs sometimes requires policy choices that in ordinary times would generate rancor and concerns about trade wars. Despite an elaborate process to promote cross-border cooperation, trade policymakers are more at risk for taking contradictory action during periods of stress. ![]() Trade ministers are usually the last to issue “WIT” (whatever it takes) rhetoric. Supply chain disruptions occur not infrequently they are often remedied within a quarter. As noted above, trade ministers have been the last to engage. This leaves trade ministers as the main mechanism for additional economic support. Subsidies can profoundly distort competition and be difficult to unwind later, after the crisis has passed. The broad substitution of sovereign risk for private risk through guaranteed loans is not well understood from a risk perspective across all credit instruments, from loans to small- and medium-sized companies to sovereign debt issuance. However, there may be real limits on how far these fiscal tools can - or should be - used if tax payments remain suspended as well. ![]() Fiscal policymakers can expand stimulus and subsidy support structures. ![]() The answer is yes, but it is going to be a long haul.Ĭentral banks and financial regulators can make important, incremental moves to expand existing facilities. Some may question whether policymakers have any fire power left to address the pandemic if disruptions and catastrophic loss of life in the advanced economies (which drive global growth) should persist into the summer.
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