An Asian Perspective on Gold and the Dollar

Too Important to Miss!

Chow Chung-yan is the Editor-in-Chief of the South China Morning Post, a leading source of information on China.  What follows is a digest of his January 12 opinion piece called “Forget Venezuela and Greenland – here is the real trillion-dollar question” that addresses the rebalancing of the global economy and geopolitics:

In today’s chaotic world, we can sum up the shift in the global economy and geopolitics with a single number: 1 trillion.

The year 2024 will be remembered as the first time in history that a national government’s interest payments on its debt exceeded US$1 trillion, according to data from the Federal Reserve Bank of St Louis.

Despite US President Donald Trump’s pledge to cut federal spending and his aggressive global trade war, the United States is now adding US$1 trillion in national debt every 71 days – up from every 150 days in 2024, according to the US Congress Joint Economic Committee. This pace marks the fastest peacetime accumulation of national debt in history, with no sign of slowing soon.

• According to Forbes, the 15 richest billionaires in the US added US$1 trillion to their collective net worth during the first year of Trump’s second term – the fastest concentration of wealth at the top in recorded history.
• At the same time, a trillion-dollar crisis unfolded at the bottom. American credit card debt, having crossed the US$1 trillion mark in 2023, surged to a record US$1.23 trillion last year.

Even as America slides deeper and deeper into debt as Chow describes, America remains intent on dominating the globe militarily.  President Trump is now calling to increase defense spending by 50 percent, from $1 trillion annually to $1.5 trillion.

Chow writes that China is hitting some different trillion-dollar benchmarks.  “Last year, it became the first nation ever to post a US$1 trillion annual trade surplus – an extraordinary feat given the intensifying trade war with the US and growing resistance from the European Union. Beijing achieved this by aggressively expanding into non-US markets, especially Belt and Road Initiative countries.”

• According to a forecast by US-based R&D World magazine, China matched the US in research and development expenditure on a purchasing power parity basis last year – with each surpassing US$1 trillion – and is projected to overtake it this year. The report called this shift “the sharpest reversal of innovation leadership in the modern era”.

We want top off this important piece on debt and development, by adding a graphic to illustrate what China (and other nations) are doing on the monetary front.