1. Guerra comercial – guerra cambial – guerra real
Dr. Antony P. Mueller (UFS)
Semana do Economista
15 de agosto de 2018

2. The dollar is your problem
“The dollar is our currency but your problem.”
Nixon-era US treasury secretary John Connally in 1971
The Bretton Woods fixed the US dollar to the price of gold at $35 an ounce and had the other countries maintain a fixed and agreed parity vis-à-vis the dollar. The system was doomed as early as 1958 when the European currencies attained full convertibility and private capital flows began to accelerate. The unravelling reached a tipping point in The US economy suffered from a host of ills: inflation approaching 6%, GDP growth less than 1%, an emerging current account deficit, and gold coverage falling from 55% to 22%.
President Richard Nixon announced a ‘new economic policy’ on 15 August The prime architect of the ‘Nixon shock’ was treasury secretary John Connally. The measures included a unilateral 10% surcharge on all dutiable imports, a 10% reduction in foreign assistance expenditures, closing of the ‘gold window’ and a 90-day wage and price controls.

3. Trade and currency war 2018
"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar. Our relations with Turkey are not good at this time!“
President Donald J. Trump August 10, 2018
Turkey's currency plunged to fresh all-time lows against the dollar Friday after President Donald Trump announced in a tweet that he would double tariffs on aluminum to 20% and on steel to 50%. 
The lira dropped as much as 19% against the dollar, its steepest daily drop since at least It has been one of the worst-performing currencies this year but a deepening rift between Ankara and Washington has accelerated the selloff.
Source: html

4. Turkish Lira to US-dollar

5. Turkish revenge. New tariffs on US products
Turkey will impose an additional 50 percent tax on U.S. rice, 140 percent on spirits and 120 percent on cars. There are also additional charges on U.S. cosmetics, tobacco and some food products. Source

6. Turkey. Foreign debt

7. Turkey. Current account to GDP

8. Turkey. Central bank balance sheet

9. Valorização do dólar Interactive Map July 2018

10. Moldova
Leu -53.1
Mexico
Peso -53.3
Hong Kong
HK$ -53.8
India
Rupee -54.4
South Africa
Rand -57.9
Azerbaijan
Manat -57.9
Romania
Leu -58.0
Turkey
Lira -58.5
Taiwan
NT$ -58.8
Indonesia
Rupiah-60.2
Malaysia
Ringgit -61.9
Russia
Rouble -62.0
Over (+) and under (-) valuations against the US-dollar
Switzerland
Franc 18.8
Sweden
Krona 5.8
United States
US$ 0 BASE CURRENCY
Norway
Krone -5.2
Canada
C$ -8.0
Euro area
Euro -14.1
Denmark
Krone -14.4
Israel
Shekel -15.1
Australia
A$ -18.1
Uruguay
Peso
Brazil
Real -20.1
Lebanon
Pound -21.9
Singapore
S$ -22.4
New Zealand
NZ$ -23.2
Britain
Pound -23.2
Colombia
Peso -24.9
Chile
Peso -26.5
South Korea
Won -26.8
Costa Rica
Colón -26.8
UAE
Dirham -30.8
Sri Lanka
Rupee -33.9
Thailand
Bahrain
Dinar -42.6
China
Yuan -43.8
Pakistan
Rupee -44.0
Hungary
Forint -44.2
Vietnam
Dong -48.8
Jordan
Dinar -50.2
Poland
Zloty -50.3
Oman
Rial -50.5
Argentina
Peso -50.9
Philippines
Peso -52.5
Baht -34.9
Honduras 
Lempira -35.7
Japan
Yen -36.4
Kuwait
Dinar -37.0
Czech Rep.
Koruna -38.3
Guatemala
Quetzal -39.4
Croatia
Kuna -39.6
Qatar
Riyal -40.2
Nicaragua 
Córdoba -40.8
Peru
Sol -41.8
Saudi Arabia
Riyal -41.9

11. US trade deficit (monthly)

12. US current account deficit in % of GDP (mean = - 2.64%)

13. United States long-term TIC Flow
There was million of dollars worth of Treasury International Capital (TIC) flowing into the United States in May of Net Long Term Tic Flows in the United States averaged USD Million from 1978 until 2018, reaching an all time high of USD Million in September of 2014

14. US net long-term “Tic flow” – Treasury International Capital

15. US net international investment position

16. Sources: Federal Reserve; US Department of the Treasury

17. China. Foreign Exchange reserves

18. China. Exchange rate (yuan per US-dólar)

19. Japan. Foreign exchange reserves

20. Japan. Exchange rate (Yen per US-dólar)

21. Brazil. Foreign exchange reserves

22. Brazil. Exchange rate (real per dólar)

23. U.S. Government debt

24. U.S. government debt coefficient (Federal debt in % of gdp)

25. USA Military Expenditure

26. Military spending 2017 (US 2019: 717bn)
Rank
Country
Spending ($ Bn.)
% of GDP
% of World share
World total
1,739
2.2 01
United States
610.0
3.1
35.0 02
People's Republic of China[a]
228.0
1.9
13.0 03
Saudi Arabia[a][b]
69.4 10
4.0 04
Russia
66.3
4.3
3.8 05
India
63.9
2.5
3.7 06
France
57.8
2.3
3.3 07
United Kingdom
47.2
1.8
2.7 08
Japan
45.4
0.9
2.6 09
Germany
44.3
1.2
South Korea
39.2 11
Brazil
29.3
1.4
1.7

27. Costs of “War on terror”((Source: "National Defense Budget Estimates for FY 2018," Office of the Under Secretary of Defense, June 2017.) FY
WoT OCO
DoD Budget Increase
VA Budget Increase
Total WoT          
Boots on Ground*
2001
      $22.9
     $6.5
    $1.5
     $31.0
    9,700
2002
      $16.9
   $40.8
     $59.1
2003
      $72.5
   $36.7
    $2.6
    $111.9
136,800
2004
      $90.8
   $11.6
    $105.0
169,900
2005
      $75.6
   $23.6
    $3.1
    $102.3
175,803
2006
    $115.8
   $10.5
    $0.7
    $127.0
154,220
2007
    $166.3
   $20.9
    $5.3
    $192.5
186,563
2008
    $186.9
   $47.5
    $1.2
    $235.6
181,000
2009
    $153.1
   $34.2
    $9.8
    $197.1
183,300
2010
    $162.4
   $14.7
    $3.9
    $181.0
144,205
2011
    $158.8
     $0.3
    $3.3
105,555
2012
    $115.1
     $2.2
    $2.3
    $119.6
  65,800
2013
      $82.0
  -$34.9
      $49.6
  43,300
2014
      $85.2
     $0.8
    $2.0
      $88.0
  32,500
2015
      $64.2
     $1.0
    $1.8
      $67.0
  12,650
2016
      $58.6
   $24.3
    $6.5
      $89.5
  12,457
2017
      $82.4
    -$5.6
    $3.5
      $80.3
   n.a.
2018
      $64.6
    $58.4
    $3.8
    $126.8
TOTAL
 $1,774.1
  $293.6
  $58.0
 $2,125.7

28. “War on drugs”

29. “War on Poverty”

30. SDR – Composition of Special Drawing Rights
Currency
Weights determined in the 2015 Review
(percent)
Fixed Number of Units of Currency for a 5-year period Starting Oct 1, 2016
  U.S. Dollar
41.73
  Euro
30.93
  Chinese Yuan
8.33
1.0174
  Japanese Yen
8.09
11.900
  Pound Sterling
 10.92

31. Composition of foreign exchange reserves holdings
Currency
Global share 2017
in percent
US-dollar
62.70
Euro
20.14
Japanese Yen
4.89
Pound Sterling
4.54
Canadian dollar
2.02
Australian dollar
1.80
Chinese Renminbi
1.23
Swiss Franc
0.18

35. Debt expansion phase – Debt contraction
Trade balance
Capital balance
Asset/Debt
Expansionary Phase
Creditor country
EX > IM
CIM < CEX
Asset accumulation
Debtor country
EX < IM
CIM > CEX
Debt accumulation
Contractionary Phase
Asset reduction
CI< < CEX
Debt reduction

36. United States imports of steel

37. Brazil. Structure of exports (Source: OEC)

38. Brazil. Structure of imports (Source: OEC)

39. Brazil. Direction of exports (Source: OEC)

40. Brazil. Origin of imports (Source: OEC)

41. Contact and references antonymueller@gmx.com

42. Additional sources www.continentaleconomics.com