Trade Barriers and the Middle Age
Trump-Zelensky Chitchat at St Peter’s.
Source: Neil Brown.
Unequal Decline of Manufacturing
Compared to other developed economies, manufacturing has fallen a lot more in the US and UK.
Why? According to Greenmantle:
the relatively strong U.S. and UK currencies;
larger trade deficits
greater financialization;
less willingness to engage in industrial policy;
greater readiness to offshore production, rather than to develop regional supply chains as in the case of Germany or Japan
Source: Greenmantle
Trade Barriers and the Middle Age
Historians used a huge database of ancient coins to map trade as the Roman-Byzantine world disappeared.
Overall trade declined after the Arab conquests of much of the Mediterranean in the 7th century AD. What was once united under the Roman empire was now divided.
Trade and wealth concentrated around a new Arab Caliphate, but a new trading centre emerged in the Frankish lands of northern Europe thanks to:
gains from running trade deficits financed by seigniorage revenyes.
strong increases in relative productivity
both of which outweighed any limits to foreign market access.
In contrast the Byzantine Empire experienced the largest declines in economic activity in the seventh century.
Source: Boehm & Chaney
AI Can Now Generate Hyper-Realistic Games
Source: X
China: Bank to an Emerging World.
In the past decade, China has become the largest creditor to developing countries, surpassing the IMF, World Bank, and Paris Club countries.
Here are the top five borrowers of Chinese money (in absolute dollar terms)
Russia ($61.43 billion),
Angola ($17.50 billion),
Brazil ($15.96 billion),
Pakistan ($15.29 billion), and
Ecuador ($10.54 billion).
Source: CEPR
British Assets = Opportunity?
BlackRock CEO Larry Fink announced a significant increase in holdings of UK assets, viewing them as undervalued and promising under the new administration.
Follows gossip of growing demand for UK assets as an alternative to overexposed US investment. Evidenced with growing value of GBP relative to USD.
Meanwhile, UK stocks have been wounded since the April 2 tariff shock:
