The Guardian view on the global bond shock: Andy Burnham should take note | Editorial
Japan’s collision with Donald Trump reveals the dilemma facing Britain: economic independence is becoming more necessary – and more tricky to achieve“In the midst of every crisis lies great opportunity”...
By Editorial · The Guardian Opinion
Japan’s collision with Donald Trump reveals the dilemma facing Britain: economic independence is becoming more necessary – and more tricky to achieve “In the midst of every crisis lies great opportunity” is an aphorism attributed to Albert Einstein . It seems to be taken to heart by this White House. A global bond sell-off sparked by an inflationary shock emanating from the Gulf sees Donald Trump seeking to restrict plans by Japan – a longtime ally – to reduce dependence on an international system America dominates. Japan, a successful exporter, has long done things its own way. For years Tokyo saw off the bond vigilantes despite running enormous deficits and a huge national debt. It demonstrated how a central bank could fund public spending and keep interest rates low if it wanted to. This economic model was refined by Shinzo Abe, Japan’s longest-serving prime minister. However, this week the US treasury secretary, Scott Bessent , called time on Abenomics as his price for US help in stabilising Japan’s currency. Japan’s Sanae Takaichi, he indicated, should shrink her $2tn spending plans and raise rates. Abenomics did not suddenly become financially impossible. It became inconvenient to the issuer of the world’s reserve currency. Continue reading...