Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, November 13, 2025

AI Summary. Analysts forecast an average annual total return of 6.5% for the S&P 500 stock index over the next 10 years, within a range of 3% to 10%, which would rank in the 27th percentile of 10-year returns since 1900. The base case combines 6% annual earnings-per-share growth, a 1% annual decline in valuations, and a 1.4% average dividend yield.

Peter Oppenheimer, Timothy Moe, Ben Snider, Sharon Bell, et al. Goldman Sachs
Date Posted:

Goldman forecasts an annualised total return of 6.5% for the S&P 500 over the next decade, underperforming STOXX Europe 600’s 7.1% (7.5% in $ terms) and Japan’s 8.2% (10.2–11.7% in $ terms).

How much will US stocks return over the next decade?

Core argument: The forecast calls for an average annual S&P 500 total return of 6.5% over the next 10 years, with upside and downside scenarios spanning 3% to 10%, a base case that would rank in the 27th percentile of 10-year returns since 1900.

We forecast an average annual S&P 500 total return of 6.5% during the next 10 years, with upside and downside scenarios indicating a range of 3% to 10%. Relative to the distribution of S&P 500 10-year returns since 1900, this base case 6.5% return would rank in the 27th percentile. Adjusting for our economists' estimated average inflation rate of 2.2%, our forecast would indicate a real return of 4%. The building blocks of our base case 6.5% return forecast consist of 6% annualised earnings per share growth, a 1% annualised decline in valuations, and a 1.4% average dividend yield. The S&P 500 net profit margin and ROE currently stand near record highs, and many of the tailwinds to corporate profitability in recent decades are unlikely to boost profits to a similar extent going forward.

Takeaways by Macro Roundup® AI

  1. The forecast calls for an average annual S&P 500 total return of 6.5% over the next 10 years, with upside and downside scenarios spanning 3% to 10%, a base case that would rank in the 27th percentile of 10-year returns since 1900.
  2. The 6.5% base case comprises 6% annualised earnings-per-share growth, a 1% annualised decline in valuations, and a 1.4% average dividend yield, and implies a 4% real return against an estimated 2.2% average inflation rate.
  3. The S&P 500 net profit margin and return on equity stand near record highs, and many of the tailwinds to corporate profitability in recent decades are unlikely to boost profits to a similar extent going forward.

Related Articles:

  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.
  • How Much Wealth Would Be Destroyed By An AI Stockmarket Crash? — Americans hold about $42T, or 20% of total household wealth, in US stocks, up four percentage points since the dotcom era, while foreign investors hold $18T. A dotcom-scale drop would erase $16T of household wealth and, using an estimated $3.20 spending decline per $100 of lost stock wealth, cut consumption by roughly $890bn, or 2.9% of GDP.
  • Minsky Moments and AI CapEx — Capital-spending forecasts for the four largest cloud providers rose nearly 50% over the year, and AI data centers are increasingly funded through leveraged and off-balance-sheet structures, including $3.2bn in senior secured notes and a roughly $30bn asset-backed financing. The author argues this marks a speculative-finance phase where borrowers must roll over principal.

AI Summary. U.S. Treasury market liquidity briefly deteriorated around new tariff announcements, with wider bid-ask spreads, lower order book depth, higher price impact, and sharply higher price volatility, before quickly reverting to levels typical of recent years. The authors find the association between liquidity and volatility remained consistent with its historical relationship.

Michael Fleming Federal Reserve Bank of New York
Date Posted:

Treasury market liquidity, whether measured by bid-ask spreads, order book depth, or Treasury price volatility, sharply declined in response to the April 2 tariff announcement, but quickly recovered after April 9, when the tariffs were mostly postponed.

Did Treasury market liquidity deteriorate lastingly after new tariff announcements?

Core argument: Treasury market bid-ask spreads widened notably after the April 2, 2025 tariff announcement, but by much less than in March 2020 and somewhat less than during the March 2023 regional banking turmoil, narrowing after tariffs were mostly postponed on April 9.

In 2025, the Federal Reserve has cut interest rates, trade policy has shifted abruptly, and economic policy uncertainty has increased. How have these developments affected the functioning of the key U.S. Treasury securities market?. We find that liquidity briefly worsened around the April 2025 tariff announcements. Bid-ask spreads widened notably after the April 2 tariff announcement, albeit to a much lesser extent than in March 2020 and even somewhat less than during the March 2023 regional banking turmoil.They narrowed after the April 9 announcement that the new tariffs were mostly being postponed and have since been commensurate with levels typically observed in recent years. Order book depth also points to relatively poor liquidity in April 2025, when available depth declined to the lowest levels since March 2023, [but] then quickly recovered. Price impact rose abruptly on April 2, but then quickly reverted. Treasury price volatility rose sharply following the April 2 tariff announcement, peaking between April 7 and April 9, but quickly declined after the April 9 announcement.The [featured] chart shows that the 2025 observations (in dark blue) fall in line with the historical relationship; i.e. the association between liquidity and volatility in 2025 has been consistent with the past association between these two variables.

Takeaways by Macro Roundup® AI

  1. Treasury market bid-ask spreads widened notably after the April 2, 2025 tariff announcement, but by much less than in March 2020 and somewhat less than during the March 2023 regional banking turmoil, narrowing after tariffs were mostly postponed on April 9.
  2. Treasury order book depth fell in April 2025 to its lowest levels since March 2023 and price impact rose abruptly on April 2, with both measures quickly recovering.
  3. Treasury price volatility rose sharply after the April 2 tariff announcement, peaked between April 7 and April 9, and declined quickly after the April 9 postponement, with the 2025 association between liquidity and volatility consistent with the historical relationship.

Related Articles:

  • Signs of Stress in Money Markets — Federal Reserve balance sheet reduction and heavy Treasury bill issuance are pushing money market funding spreads higher, with key overnight repo rates rising above the rate the Federal Reserve pays on bank reserves. The financial system is nearing the point where bank reserves are no longer ample, and persistent funding-rate volatility could affect credit markets.
  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.
  • Treasuries Rally Is Proving Trump’s ‘Sell America’ Critics Wrong — Investors have continued buying US government debt despite concerns over tariffs, tax cuts, budget deficits, and pressure on the Federal Reserve, with benchmark 10-year yields down about half a percentage point to roughly 4%. The $30tn Treasuries market has returned about 6%, and US 10-year yields have fallen the most among G-7 nations.

AI Summary. China's manufactured goods surplus exceeds $2tn in its own customs data, about 10.5% of Chinese GDP and over 2% of world GDP, far exceeding the combined peak surpluses of Germany and Japan. The author argues the International Monetary Fund understates this by relying solely on reported current account balances, which have not similarly jumped.

Brad Setser Council On Foreign Relations
Date Posted:
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China’s surplus in manufactured goods is now over 2% of global GDP; greater than the combined surpluses of Germany and Japan at their peaks. China’s overall goods surplus is $1.2T, $800B higher than it was in 2020.

Does relying on current account data understate China's manufacturing surplus?

Core argument: China's surplus in manufactured goods exceeds $2 trillion in China's customs data, around 10.5% of China's GDP and over 2% of world GDP, far exceeding the combined surpluses of Germany and Japan at their peaks.

In the IMF’s data on global goods trade volume, China’s exports are up a cumulative 40% in volume terms since the end of 2019, while imports in volume terms are up only 1%. China’s surplus in manufactured goods, in China’s customs data, now easily exceeds $2 trillion. That is around 10.5% of China’s GDP, and over 2% of world GDP, a surplus that far exceeds the combined surpluses of Germany and Japan at their peaks. China’s surplus in all goods is now $1.2 trillion in China’s customs data, after a roughly $800 billion increase over the last 5 years. The customs surplus is around 6% of China’s GDP and well over 1 percentage point of the GDP of China’s trading partners. Yet the IMF relies exclusively on countries' reported current account surpluses and deficits in its assessment of the size of external payments imbalances. And China’s current account surplus, scaled to its GDP, hasn’t really popped. The IMF’s preferred solution to deflationary pressures in Asia, is monetary easing—which tends to weaken the currency and raise the external surplus. The right response to a shortfall in demand that is leading to deflation and a rising trade surplus, though, is a sustained fiscal expansion.

Takeaways by Macro Roundup® AI

  1. China's surplus in manufactured goods exceeds $2 trillion in China's customs data, around 10.5% of China's GDP and over 2% of world GDP, far exceeding the combined surpluses of Germany and Japan at their peaks.
  2. China's export volumes are up a cumulative 40% since the end of 2019 in the IMF's global goods trade data, while its import volumes are up only 1%.
  3. The IMF relies exclusively on countries' reported current account balances to assess external payments imbalances, and China's current account surplus scaled to GDP has not popped even as its customs goods surplus rose roughly $800 billion over five years to $1.2 trillion.

Related Articles:

  • China’s “Anti-Involution” Campaign: Global Implications — China's economy has slowed as domestic investment stagnates and consumer spending stays weak, with the shortfall partly offset by rising net exports. The author argues these internal problems are being passed to the rest of the world, since export values are rising about 6% a year while import values are down 2.2%.
  • Chinese Exports Unexpectedly Slump for First Time Since February — China's exports contracted 1.1% from a year earlier, as a more than 25% drop in shipments to the US outweighed a 3.1% rise in exports to all other countries. Weak imports alongside export strength earlier in the year pushed China's trade surplus to a record $965bn.
  • Trade With China Is Becoming a One-Way Street — China's import volumes have shown no growth since the end of 2022 while its export volumes rose 33%, according to data from the Netherlands Bureau of Economic Policy Analysis. In dollar terms, Chinese imports fell 11% from the US, 17% from Japan, and 18% from Germany, as Chinese companies replace overseas suppliers with domestic ones.

AI Summary. Global trade openness — world exports plus imports as a share of world GDP — rose steadily until the global financial crisis and has since fluctuated without further advance or retreat, leaving trade at a plateau of peak globalization. US tariffs have diverted Chinese goods to other markets and prompted transshipment to the US via third countries.

Robin Brooks Robin Brooks Substack
Date Posted:
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The sum of global exports and global imports relative to global GDP has been stable over the past decade. Robin Brooks argues that despite the ongoing trade wars, “we’re essentially in a holding pattern at peak globalization.”

Has globalization retreated, or is global trade openness holding at a plateau?

Core argument: Global trade openness, measured as global exports plus imports divided by world GDP, rose steadily until the global financial crisis and has since moved sideways amid various shocks, leaving globalization neither advancing nor retreating.

The chart shows a widely-used measure of global trade openness, which is the sum of global exports plus global imports divided by world GDP. This ratio increased steadily until the global financial crisis, whereafter it went into a holding pattern with lots of ups and downs due to various shocks. While it’s true that globalization hasn’t advanced any further over the past decade, it hasn’t retreated either. We’re essentially in a holding pattern at peak globalization. The fact that there’s been no retreat in globalization is consistent with all the work I’ve done on Chinese exports in recent posts. US tariffs have resulted in massive trade diversion of Chinese goods to the rest of the world as well as transshipment of goods to the US via third countries. In the end, however, China remains the biggest producer of goods and the US is the biggest consumer. Those two forces inevitably have to meet in global trade, just - these days - on a more circuitous route.

Takeaways by Macro Roundup® AI

  1. Global trade openness, measured as global exports plus imports divided by world GDP, rose steadily until the global financial crisis and has since moved sideways amid various shocks, leaving globalization neither advancing nor retreating.
  2. US tariffs have resulted in trade diversion of Chinese goods to the rest of the world and transshipment to the US via third countries, according to the author's analysis of Chinese exports.
  3. China remains the biggest producer of goods and the US the biggest consumer, forces the author argues inevitably meet in global trade, now by a more circuitous route.

Related Articles:

  • Why Global Imbalances Do Matter — From 2008 to 2023 the US household and corporate sectors ran average savings surpluses of 3.5% and 1.6% of GDP respectively, leaving the federal government as the dominant net borrower in the US economy. This suggests the benefit of persistent net capital inflows is the ability to run larger fiscal deficits and grow public debt.
  • How NOT To Negotiate With China — Trade diversion signals deep distress in China's export sector, and the author argues a sustained 10% tariff hike would be more credible than larger ones and could counter China's rare earths leverage. Easing up on Chinese exporters instead signals weakness and discourages Europe from coordinating with the US.
  • The True Cost of China’s Falling Prices — Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.

AI Summary. China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.

Jon Emont and Raffaele Huang Wall Street Journal
Date Posted:

While China is planning on easing exports of rare earths, a “validated end-user” system will keep them out of the American defense supply chain going forward, meaning the US defense industrial base will have to build an alternative supply chain.

Is China easing rare-earth exports while blocking military-linked buyers?

Core argument: China plans a "validated end-user" (VEU) system that would fast-track export approvals of rare earths and other restricted materials to U.S. firms while excluding companies with ties to the U.S. military, according to people familiar with the plan.

China plans to ease the flow of rare earths and other restricted materials to the U.S. by designing a system that will exclude companies with ties to the U.S. military while fast-tracking export approvals for other firms, according to people familiar with the plan. The “validated end-user” system, or VEU, would enable Chinese leader Xi Jinping to follow through on a pledge to President Trump to facilitate the export of such materials while ensuring that they don’t end up with U.S. military suppliers, a core concern for China.

Takeaways by Macro Roundup® AI

  1. China plans a "validated end-user" (VEU) system that would fast-track export approvals of rare earths and other restricted materials to U.S. firms while excluding companies with ties to the U.S. military, according to people familiar with the plan.
  2. The VEU system would let Chinese leader Xi Jinping honor his pledge to President Trump to facilitate exports of such materials while ensuring they do not reach U.S. military suppliers, a core concern for China.

Related Articles:

  • Mad Libs: Just Fill In The Blanks — China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.
  • China Cracks Down On Foreign Companies Stockpiling Rare Earths — China is warning foreign buyers of rare earths and derived products such as magnets that building large inventories will bring supply restrictions, and is limiting approved export volumes to prevent stockpiling, according to people familiar with the matter.
  • China’s Weaponisation of Rare Earths is a New Kind of Trade War — China's export controls on rare earth materials and magnets threatened to halt production across the auto industry, the largest manufacturing sector in most advanced economies, and forced Washington to negotiate on tariffs. Despite China's well-known dominance of rare earth production, Western governments and companies have not developed alternative suppliers.

Friday, November 14, 2025

AI Summary. Africa's population, now about 1.5bn, is projected to reach 4bn by 2100, with sub-Saharan Africa approaching 3.5bn and Nigeria's working-age population forecast to exceed 320m. Between 2005 and 2020, Congo, Nigeria, Ethiopia and other large states averaged only one job created for every two entrants to the working-age population.

Michael Cohen, Nduka Orjinmo, Yvonne Mhango, Tom Fevrier, et al. Bloomberg
Date Posted:
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Sub-Saharan Africa’s population, currently ~1.3B, is forecast to reach ~3.5B in 75 years. ~60% of the population is < 25. Worryingly, a Bloomberg analysis finds that between 2005 and 2020, for every two new working-age persons only one job was created.

Can Africa create enough jobs for its rapidly growing working-age population?

Core argument: Africa's population, about 1.5 billion after doubling in three decades, is predicted to reach 4 billion by 2100, with sub-Saharan Africa growing from 1.3 billion to nearly 3.5 billion and Nigeria approaching half a billion.

Africa’s population has doubled in three decades and it’s now home to about 1.5 billion people, a figure that’s predicted to grow to 4 billion by the turn of the century. Sub-Saharan Africa is estimated to be home to 1.3 billion people, having grown from fewer than 200 million in 1950. The region’s population is predicted to swell to nearly 3.5 billion by the turn of the century, with close to half a billion in Nigeria alone. Nigeria’s working-age population (aged 15–64) is forecast to more than double, reaching over 320 million by 2100. Already about 60% of people south of the Sahara desert are younger than 25, compared with one-third in the US, according to the United Nations. The expected number of annual births in Congo is more than 800,000 greater than across the US or the European Union’s 27 member states. So while the developed world worries about getting old, Africa is getting younger. Most countries on the continent already struggle to provide sufficient jobs. For every two people that joined Congo’s working-age population between 2005 and 2020, only one job was created on average, a pattern repeated across Nigeria, Ethiopia and other large states, according to Bloomberg Economics analysis of International Labor Organisation data.

Takeaways by Macro Roundup® AI

  1. Africa's population, about 1.5 billion after doubling in three decades, is predicted to reach 4 billion by 2100, with sub-Saharan Africa growing from 1.3 billion to nearly 3.5 billion and Nigeria approaching half a billion.
  2. For every two people who joined Congo's working-age population between 2005 and 2020, only one job was created on average, a pattern repeated across Nigeria, Ethiopia and other large states, according to Bloomberg Economics analysis of International Labour Organisation data.
  3. About 60% of people south of the Sahara are younger than 25, compared with one-third in the US, according to the United Nations, and Nigeria's working-age population aged 15-64 is forecast to more than double to over 320 million by 2100.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • 21st-Century Africa Governance and Growth — Sub-Saharan Africa's GDP per capita has fallen relative to the world average over three decades, from 30% to 22%, reflecting the region's inability to sustain growth. Had it grown at the global pace since 1990, income per capita would be over 40% higher; at emerging East Asia's pace, nearly 3x higher.
  • Changing Sub-Saharan Africa’s Growth Trajectory — Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.

AI Summary. The share of young adults who are neither in education, employed, seeking work, nor caring for children is rising in many countries, among both young men and young women. Including stay-at-home parents in the standard "not in education, employment or training" measure obscures this increase.

John Burn-Murdoch Financial Times
Date Posted:
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About 10% of Americans aged 20–24 are not working or seeking work, nor are they in school or raising children, about twice the fraction during the 1990s. This group spends seven hours per day alone, up from five a decade ago.

Are more young adults disengaged from work, school, and parenting?

Core argument: The share of young adults who are neither in education, working, seeking work, nor parenting is rising in many countries, among young men and young women alike.

People’s early interactions with the labour market are so critically important for shaping their futures that in the 1990s British researchers came up with the acronym “NEET” — standing for young people who are Not in Education, Employment or Training — to capture the group of adolescents and twenty-somethings struggling to make the transition from compulsory schooling to the world of skills and work. As originally defined, NEETs include young mothers (or in very rare cases fathers) whose reason for not being in work or education is that they’re at home looking after their children. Counting young stay-at-home parents as part of a problem group of the economically disengaged and disadvantaged always felt like an odd fit (albeit defensible). But the inclusion of the shrinking pool of full-time parents is now actively obscuring the fact that the group we are most concerned about — young adults who are neither in education, working or seeking work, or parenting — is marching upwards in many countries, not only for young men but women too.

Takeaways by Macro Roundup® AI

  1. The share of young adults who are neither in education, working, seeking work, nor parenting is rising in many countries, among young men and young women alike.
  2. British researchers coined "NEET" in the 1990s — Not in Education, Employment or Training — to capture adolescents and twenty-somethings struggling to move from compulsory schooling into skills and work.
  3. Counting young stay-at-home parents within the NEET measure obscures the rise in young adults who are neither studying, working, seeking work, nor parenting, as the pool of full-time young parents shrinks.

Related Articles:

  • Changes in Milestones of Adulthood — Among US young adults aged 25–34, the share completing a high school or college degree rose 9 percentage points to 83%, while the share ever married fell 18 points to 44% and the share living with a child fell 16 points to 39%. Economic milestones became more common as family formation milestones became less common.
  • All Over The Rich World, Fewer People Are Hooking Up And Shacking Up — In the US, 41% of women and 50% of men aged 25-34 were single, double the share of five decades earlier, and the share of people living alone rose in 26 of 30 mostly rich OECD countries. One estimate puts the global increase in single people at over 100m in a decade.
  • Marriage, Cohabitation, and Separation: A Dynamic Approach to the Second Demographic Transition — Four decades of U.S. monthly demographic data show marriage has declined while cohabitation has risen, both union types have become more stable, and remaining single has become more common, alongside a substantial fertility decline. A matching model estimates that rising match-formation costs outpaced gains from partnering, reducing partnership formation.

AI Summary. China's central bank has officially reported buying just 25 tonnes of gold this year, but Société Générale estimates from UK export and trade data that actual purchases could reach 250 tonnes, more than a third of global central bank demand. Buying also occurs through China's sovereign wealth fund and military, which need not disclose holdings promptly.

Leslie Hook Financial Times
Date Posted:

Official gold purchases by China’s central bank are so low that “few in the market believe the official figures.” Société Générale estimates that China’s total purchases of gold this year could be 250 tonnes or 1/3 of global central bank demand.

Is China buying far more gold than it officially reports?

Core argument: Société Générale analysts estimate, using trade data including UK gold exports, that China's purchases could reach 250 tonnes this year — more than a third of global central bank demand — versus the 25 tonnes officially reported.

Publicly reported buying by China’s central bank has been so low this year that few in the market believe the official figures. Analysts at Société Générale estimate, based on trade data, that China’s total purchases could reach as much as 250 tonnes this year, or more than a third of total global central bank demand. Its official gold-buying programme, which is managed by the State Administration of Foreign Exchange (Safe), part of the People’s Bank of China, has officially bought just 25 tonnes so far this year. Reserve gold is typically stored either in Shanghai or in Beijing. Safe has one-year and five-year targets for its purchases of gold, and current holdings remain far below target, according to a former Safe official. The purchases are made not only by Safe and its intermediaries, but also by China’s sovereign wealth fund CIC and the military, which are not mandated to disclose their holdings on a timely basis. One proxy for Beijing’s official buying is to look at UK gold exports to China, because the large bars favoured by central banks are mainly traded in London. Using this method, Société Générale estimates that Safe will import about 250 tonnes this year.

Takeaways by Macro Roundup® AI

  1. Société Générale analysts estimate, using trade data including UK gold exports, that China's purchases could reach 250 tonnes this year — more than a third of global central bank demand — versus the 25 tonnes officially reported.
  2. China's official gold buying is managed by the State Administration of Foreign Exchange within the People's Bank of China, but purchases are also made by sovereign wealth fund CIC and the military, which need not disclose holdings on a timely basis.
  3. A former Safe official says the agency holds one-year and five-year gold purchase targets and that current holdings remain far below target, with reserve gold typically stored in Shanghai or Beijing.

Related Articles:

  • State of Chinese Gold Demand — Gold broke above its $3,200–$3,400 range to a record high above $3,600, with the near-term catalyst identified as threats to Federal Reserve independence driving US investor demand. Chinese total gold demand bottomed near $9bn and nearly doubled to $16bn before moderating to about $13bn as private-sector buying partially normalized.
  • De-Dollarization? Diversification? Exploring Central Bank Gold Purchases and the Dollar’s Role in International Reserves — Central banks' gold accumulation is generally not associated with reducing the dollar's share of international reserves at the country level, apart from a few prominent cases, and is more consistent with modest overall diversification. Gold's role as an official-sector store of value has grown, but its use as a unit of account and medium of exchange remains limited.
  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.

AI Summary. Markets are front-running what they see as inevitable debt monetization and fleeing into safe-haven assets, a "debasement trade" reflected in rapidly rising long-term government bond yields and a rally in precious metals. This reflects a broad loss of confidence in fiat currencies rather than a flight from the dollar alone.

Robin Brooks Robin Brooks Substack
Date Posted:

Noting that the end of the US government shutdown “has seen a resumption of the precious metals rally” with “gold and silver back to near their October highs,” Brooks concludes that “appetite for safe havens is much stronger than I would have thought.”

Do rising yields and metals signal lost confidence in fiat currencies?

Core argument: Brooks argues a "debasement trade" is underway, in which markets front-run what they see as inevitable debt monetization and flee into safe haven assets, which he says explains the rapid rise in longer-term government bond yields in many places.

[Brooks argues that the] “debasement trade,” [defined as “the idea that markets have begun front-running what they see as inevitable debt monetization and are fleeing into safe haven assets”] [is underway]. This is why yields on longer-term government bonds have been rising so rapidly in many places. Markets are [also] hunting for safe haven assets, which is what the crazy rally in precious metals is about. Markets are constantly testing if other things might be good safe havens. Low-debt countries like Sweden and Switzerland are definitely in vogue. The debasement trade isn’t about a flight out of the Dollar. It’s about a much broader loss of confidence in fiat currencies. Appetite for safe havens is much stronger than I would have thought. The end of the US government shutdown has seen a resumption of the precious metals rally, which is counterintuitive. After all, the end of the shutdown reduces recession odds and pushes up real rates, which are things that should weaken demand for gold and silver. Markets are treating good news as bad news. The end of the US government shutdown has taken gold (black) and silver (purple) back to near their October highs. [Editors note: research shows that short-run movements in gold and similar asset prices remain largely unexplained.]

Takeaways by Macro Roundup® AI

  1. Brooks argues a "debasement trade" is underway, in which markets front-run what they see as inevitable debt monetization and flee into safe haven assets, which he says explains the rapid rise in longer-term government bond yields in many places.
  2. Brooks characterizes the debasement trade as a broad loss of confidence in fiat currencies rather than a flight out of the Dollar, with markets favoring low-debt countries such as Sweden and Switzerland.
  3. Brooks calls it counterintuitive that the end of the US government shutdown has taken gold and silver back near their October highs, since reduced recession odds and higher real rates should weaken demand for precious metals.

Related Articles:

  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.
  • Global Debt Report 2025 — About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.
  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.

AI Summary. The U.S. announced joint statements with four Latin American countries under which it would reduce tariffs on a range of goods not produced domestically, including bananas and coffee from Ecuador and beef from Argentina. Officials said no government-sponsored beef shipments are planned, but tariff cuts on beef are expected.

Gavin Bade Wall Street Journal
Date Posted:

The White House is planning to cut tariffs on goods from Ecuador, Argentina, El Salvador and Guatemala that are not produced domestically, such as coffee and bananas, as well as tariffs on Argentinian beef.

Will the US cut tariffs on goods it doesn't produce domestically?

Core argument: The U.S. released joint statements with four Latin American countries pledging to reduce tariffs on a variety of goods not produced domestically, including bananas and coffee from Ecuador and beef from Argentina.

The administration released joint statements with the four Latin American countries, saying that the U.S. would reduce tariffs on a variety of goods not produced domestically. A senior administration official told reporters those products would include bananas and coffee from Ecuador, along with beef from Argentina. Trump has said in recent weeks that he would consider boosting beef imports from Argentina in an effort to relieve rising prices for American consumers, sparking backlash from ranchers and farm-state lawmakers in Congress. The senior official said that Trump’s team isn’t planning for government-sponsored shipments of beef from the nation to the U.S., but that officials expect to reduce tariffs on the product in the weeks to come.

Takeaways by Macro Roundup® AI

  1. The U.S. released joint statements with four Latin American countries pledging to reduce tariffs on a variety of goods not produced domestically, including bananas and coffee from Ecuador and beef from Argentina.
  2. Trump has said he would consider boosting beef imports from Argentina to relieve rising prices for American consumers, drawing backlash from ranchers and farm-state lawmakers in Congress.
  3. A senior administration official said Trump's team isn't planning government-sponsored beef shipments from Argentina to the U.S., but that officials expect to reduce tariffs on the product in the weeks to come.

Related Articles:

  • Who Pays Trump’s Tariffs? — Amalgamated estimates from Goldman Sachs, the Yale Budget Lab and Allianz Trade indicate U.S. importers initially absorbed 64% of U.S. tariff costs, with 14% borne by foreign exporters and 22% passed to consumers. The estimates project the consumer share rising to about 67%, leaving the price level 1–1.5 percentage points higher than without the tariffs.
  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • Trump’s Tariffs Are a Massive Money Grab. That’s Why They Are in Trouble — The US administration's own budget office estimates the tariffs amount to $3.9tn over a decade, the largest tax increase since 1982. Though the Supreme Court tends to read presidential authority over foreign policy broadly, allowing any president to impose such a tax without input from Congress may exceed its limits.

AI Summary. The heads of all but one of China's five regional military commands are unaccounted for, under investigation, or fired, and commanders of the navy and ground force have been targeted following those of the rocket force. Heads of several departments under the Central Military Commission have disappeared from public view, and scores of political commissars have been ousted or investigated.

Kathrin Hille Financial Times
Date Posted:

A senior Taiwanese official notes that the large-scale promotion of younger PLA officers may lead to a “less risk-averse, more nationalistic and more aggressive” PLA officer corps, though the ongoing purge may impact military readiness in the short term.

Do sweeping removals of senior commanders weaken China's military readiness?

Core argument: The heads of four of the People's Liberation Army's five regional commands are unaccounted for, under investigation, or have been fired.

The heads of all but one of the PLA’s five regional commands are currently unaccounted for, are under investigation or have been fired. The navy and the ground force have followed the rocket force in having their commanders targeted. The heads of several specialised departments under the Central Military Commission, the top command organ led by Xi, have disappeared from public view. And scores of political commissars have been ousted or are under some form of party investigation.

Takeaways by Macro Roundup® AI

  1. The heads of four of the People's Liberation Army's five regional commands are unaccounted for, under investigation, or have been fired.
  2. Commanders of the PLA navy and ground force have been targeted following the rocket force, and the heads of several specialised departments under the Central Military Commission, led by Xi Jinping, have disappeared from public view.
  3. Scores of PLA political commissars have been ousted or placed under some form of party investigation.

Related Articles:

  • China Sees Lowest Attendance at Plenum Since Cultural Revolution — A tally by Bloomberg News found only 168 of the 205 members of China's Communist Party Central Committee attended the party's fourth plenum, the lowest attendance rate since the Cultural Revolution, with 42 officials including alternate members absent without explanation. The tally suggests the anti-corruption purges are wider than publicly known.
  • The Sinister Disappearance Of China’s Bosses — China's liuzhi detention system operates alongside normal policing, requiring no court approval and denying detainees lawyers, with windowless cells, constant lighting and round-the-clock supervision. Stock-exchange filings show 39 executives at listed companies disappearing into the system by the end of September, exceeding the prior year's record.
  • Xi Jinping Says He Is Preparing China for War — China's leadership has emphasized war readiness, announcing a 7.2% increase in the defense budget—which has doubled over the past decade—and plans to reduce dependence on foreign grain imports. China has also opened National Defense Mobilization recruitment offices across the country, while cities in Fujian Province opposite Taiwan build or upgrade air-raid shelters.