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Showing posts from July, 2025

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 tariffs ...

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 creation of fi...