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Trump's new 30% tariff against Sri Lanka. 2nd Sri Lankan default? Who will rescue now?

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  Article's purpose This short article highlights the failure of the Sri Lankan government to agree on a comprehensive trade deal with the US to benefit from the US economy and the new world trade order being laid by the US under its new trade and economic policy ( Read the policy article here) .  The short background of the article is as follows. The US President Donald Trump through his letter dated 9 July 2025 addressed to the Sri Lankan President has communicated the final reciprocal tariff rate of 30% on imports from Sri Lanka. This is a downward revision on the 44% reciprocal tariff imposed on Sri Lanka on 2 April 2025 to be effective from 9 April 2025 which was later suspended for 90 days. The formular for the initial 44% tariff was the half of the percentage of the US trade deficit with Sri Lanka in the total value of the US imports from Sri Lanka in the year 2024. Sri Lanka is one country out of almost all countries in the world who confronted such reciprocal tar...

Central bank independence abused & lost? The Fed is now in trouble? Other central banks alerted.

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  Article's purpose and background This short article sheds some lights how the present management of the Fed (the US central bank ) has failed in the maintenance of so-called its independence, given its highly theoretical and arbitrary approach of the monetary policy framework .  This failure has been revealed by the current conflict between the Fed and the President Donald Trump which questions the reality of the central bank independence . The central bank independence is nothing but a hypothesis built by monetary economists who fail to understand that central banks and underlying monetary systems have been built and operate on money created on fiscal operations and debt . Therefore, the background of the article is summarized as follows. The origin of the present paper currency-based monetary systems operating in the world is the private bank notes and lending business. However,  in early 20th century, governments nationalized such monetary systems with the creatio...

Trump's trade deals. America to be new global export hub? Dollar debtors are bailed out?

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Article's purpose and background The purpose of this short article is to highlight that the objective of the US trade deals being negotiated at present is to make the US an export economy primarily through advanced manufacturing products in place of the present import economy.  Accordingly, trade deals are being designed to rebalance the global trade and economy in order for the US to become the leading export economy in the world. This is revealed from several official interviews of the US authorities such as the the US President, Treasury Secretary and Commerce Secretary , circulated in the media.  Therefore, this article is primarily based on views expressed by the US Commerce Secretary at a recent interview with CNBC ( Watch the interview here) . However, national leaders of many countries are seen making political statements that deals are being finalized to their favour to impress the public. This is completely wrong as the US has no interest other than cutting its tr...

Central bank losses on money printing. Is it modern economics? or independence?

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  Article's Purpose and Background This short article highlights why central banks making losses on the business of money printing is unjustified and unethical even in common sense in modern monetary economies. Therefore, this article is in the following background. It has now become a general practice for many central banks led by the US Federal Reserve , the world's largest and most influential central bank, to report massive losses. This is a puzzle why central banks make losses although they fund their operations through the monopoly printing of money or issuance of fiat money without any business rules and regulations. In contrast, banks who carry on business through the creation of money are required to make a sufficient profit if they are to stay in the business within rules stipulated by central banks as bank regulators. In economics, any business must make at least normal profit or be breakeven to escape the closure. However, central bank can continue with any amount ...

Trump tells IMF & World Bank to get reformed or lost? How fair is the threat?

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  Article's Background This short article highlights the bleak future of the IMF and World Bank  ahead  as a result of the President Donald Trump's new trade and governance policy for the American economy. The US Treasury Secretary Scott Bessent at a recent public forum heavily criticized the failure of the IMF and World Bank to deliver their founding roles envisaged for the global economic and monetary order and balance. Accordingly, present trade turmoil is a result of their failure ( Listen to the speech here) . He stated that the US would back both the institutions so long as they get reformed back to be IMF and World Bank and respective management and staff are accountable to respective roles. The IMF Managing Director's presentation made at the IMF-World Bank Spring Meetings held on 17 April also backed the US new trade policy as an outcome of the unfair international economic system prevailing at present ( Read the article with the presentation) . Accordingly, the ...