{"id":5645,"date":"2015-02-13T06:59:40","date_gmt":"2015-02-13T11:59:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=5645"},"modified":"2015-02-13T06:59:40","modified_gmt":"2015-02-13T11:59:40","slug":"heres-a-9-trillion-question","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=5645","title":{"rendered":"Here’s a $9 Trillion Question"},"content":{"rendered":"

Here’s a $9 Trillion Question<\/span><\/a><\/h3>\n

(Bloomberg) — When Group of 20 finance ministers this week urged the Federal Reserve to \u201cminimize negative spillovers\u201d from potential interest-rate increases, they omitted a key figure: $9 trillion.<\/p>\n

That\u2019s the amount owed in dollars by non-bank borrowers outside the U.S., up 50 percent since the financial crisis, according to the Bank for International Settlements. Should the Fed raise interest rates as anticipated this year for the first time since 2006, higher borrowing costs for companies and governments, along with a stronger greenback, may add risks to an already-weak global recovery.<\/p>\n

The dollar debt is just one example of how the Fed\u2019s tightening would ripple through the world economy. From the housing markets in Canada and Hong Kong to capital flows into and out of China and Turkey, the question isn\u2019t whether there will be spillovers — it\u2019s how big they will be, and where they will hit the hardest.<\/p>\n

<\/div>\n

\u201cLiquidity conditions globally will start to tighten,\u201d said Paul Sheard, chief global economist at Standard & Poor\u2019s in New York. \u201cEmerging markets won\u2019t be the only game in town. You will have a U.S. economy that is growing more strongly and also offering rising interest rates and a return on capital that is starting to vie for new investment opportunities around the world.\u201d<\/p>\n

The broad trade-weighted dollar has strengthened 12.3 percent since June, and it\u2019s forecast to advance further as the Fed tightens while the European Central Bank starts buying sovereign debt and Japan extends record stimulus. The stronger greenback will be the main channel through which the rest of the world feels the effects of a tighter Fed policy, according to Joseph Lupton, a senior global economist at JPMorgan Chase & Co. in New York.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s a $9 Trillion Question (Bloomberg) — When Group of 20 finance ministers this week urged the Federal Reserve to \u201cminimize negative spillovers\u201d from potential interest-rate increases, they omitted a key figure: $9 trillion. That\u2019s the amount owed in dollars by non-bank borrowers outside the U.S., up 50 percent since the financial crisis, according to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1733,1269,303,305,312,344,3499,431],"class_list":["post-5645","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-for-international-settlements","tag-bis","tag-fed","tag-federal-reserve","tag-financial-crisis","tag-g20","tag-interest-rate-rise","tag-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5645"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5645\/revisions"}],"predecessor-version":[{"id":5646,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5645\/revisions\/5646"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}