The Financial Times’ Martin Wolf gives a cogent and sober assessment of what he deems to be a destructive refusal to adjust policies on behalf of the world’s two biggest exporters, China and Germany. The problem is that both simultaneously want to have their cake and eat it too.

I am going to talk here a little bit about the looming trade war between China and the United States. But I am going to come at it from a side angle via some historical analogies.

Common folklore in the United States says that the Soviet Empire collapsed in large part due to the efforts of American President Ronald Reagan and not due to internal forces. Others downplay Reagan’s role and see internal forces as more significant.

The Chinese new year has only just started, and already trade tensions are ratcheting up. This is perhaps appropriate — astrologers tell us that the year of the Tiger is often a year of instability and conflict — and I suspect things will almost certainly get worse. The timing of various domestic political events in the US, China and Europe will make it harder than ever for any of these countries to back down before 2012 (by which time, presumably, the world will have ended anyway).

Oil Market Summary 03/08/2010 to 03/12/2010

Crude oil prices tread water for the week as uncertainty about demand continued to weigh on the market. Prices were down slightly on the week, with the benchmark West Texas Intermediate settling on Friday at $81.24 a barrel, compared with $81.50 a week ago.

Part of the confusion is the failure to distinguish between the question of what caused the crisis and the factors that made it much worse once it occurred. But it is rather striking that if you ask a simple question, "what is the single most important factor in explaining why the crisis happened," there is very little consistency in the answers given by economists. I find it a bit disturbing that, even after this much time to figure it out, there is little consensus on what caused the problems. Worse, those that hate government seem to find government at fault, those that think that the deregulation movement that began in the 1970s was an error point to regulatory failures, and so on, and so on.

On Monday, the world marked International Women’s Day. As a husband and father of strong, wonderful women, I am always very much aware of the occasion. But as the Vice President responsible for the gender portfolio at the World Bank, women’s day became a powerful reminder of all the things we still need to do in the quest for gender equality.

EXECUTIVE SUMMARY

Each day in recent weeks has brought new evidence of troubles in the once stalwart “trans-Atlantic relationship,” the outdated misnomer for ties between Washington and its major Western European partners: Britain, France, Germany and more recently, the European Union. Disputes and slights – some real, some imagined – have led to speculation about a drift in a relationship that dominated (and indeed founded) most of the global institutions of the second half of the 20th century. While few see any evidence of an actual rivalry between the two sides, it’s possible that the combined damage to the relationship caused by the 2003 Iraq War and then the global financial crisis in 2008 has altered the way the major players view each other. In particular, hopes that maturing EU institutions could simplify this relationship so far remain unfulfilled. Ties between various individual European states and Washington vary greatly, with Poland and the Baltic states on the warm end and an increasingly disgruntled Turkey and bellicose Russia on the other.

With monetary authorities around the world preparing for their exit, there are fears in some circles that a new Armageddon is in sight. Volatility could shoot up, it is argued, as investors try to figure out the impact of a synchronous global tightening on their respective asset classes—let alone the difference between, say, the effective fed funds rate and the interest on excess reserves!

After the financial and banking crisis of 2007/2008, the year of 2010 will certainly be dominated by the following global macroeconomic themes:

a) the growing importance in the world economy of Brazil, Russia, India and China – the so-called BRIC countries – with excellent perspectives, as far as their impact on world economic growth is concerned;

b) the dangerous fiscal and/or balance-of-payments situation of Portugal, Ireland, Italy, Greece and Spain – the so-called PIIGS countries – bringing serious risks for the world economy, including a renewed credit crunch;

c) the contradictory economic policies of the G-5 “big” economies ( US, UK, Germany, Japan and France).

The elections in Iraq on March 7, 2010, are likely to serve as an important indicator of the prospects for a resolution of the long-running dispute over the administration of the ethnically mixed and resource-rich province of Kirkuk in the north of the country.