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Excerpts:

The majority of the world’s currency reserves are held in US dollars—but that could merely be a side effect of developing nations becoming larger players on the global economic stage.

BY: JIM GLASSMAN, HEAD ECONOMIST, COMMERCIAL BANKING
FEB 20, 2019

A recent report from the International Monetary Fund shows that 62 percent of the world’s currency reserves are held in US dollars, more than double the combined foreign holdings of euros, yen and renminbi. In the past, the strength of the US economy drove the dollar’s status as a global reserve currency, but the picture today is more complicated. The accumulation of dollars overseas is now a result of trade imbalances, not confidence in the dollar as a backstop to disorderly market conditions.
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Today, almost all nations allow their currencies to float on global markets, and government interventions to prop up exchange rates are increasingly rare. Central banks have little need to maintain large reserves of dollars in case of a currency crisis. As the utility of foreign reserves declines, the dollar’s importance as a backstop in the global economy has also declined.

Trading in Dollars

The developing world naturally runs persistent trade surpluses with wealthier trading partners—developing nations have burgeoning manufacturing sectors that are able to produce cheap goods for export, but most of their consumers aren’t yet able to afford high-end products imported from the US and Europe.

Trade imbalances would naturally tend to push the currencies of developing nations higher, making their exports more expensive on the global market. To prevent this from happening, emerging economies often reinvest their surpluses into dollar-denominated assets, like bonds valued in dollars and traded on US markets.

As a result, foreign investors now hold $28 trillion in dollar-denominated assets, with an additional $1.6 trillion to $2 trillion arriving annually. Over the past decade, these investments have increasingly shifted toward the private sector. Despite worries about foreign banks hoarding massive reserves of US Treasurys, almost 80 percent of overseas holdings are now in private instruments like corporate bonds, equities and direct investment into American companies.

A Mixed Effect

The elevated level of global savings has had a mixed effect on the US economy. Borrowing costs fall when foreign nations reinvest their trade surpluses into the US bond market, and that has spurred growth by making capital investment more affordable for US corporations. Similarly, when overseas investors purchase US stocks, rising equity prices lift household portfolios.
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On the whole, it’s good that industrializing nations seek out the stability and liquidity of US markets. Over time, rising living standards in the developing world will even out trade flows, and developing nations will allow their currencies to climb. Today’s trade imbalances are laying the groundwork for a more prosperous future at home and abroad.  

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JIM GLASSMAN, HEAD ECONOMIST, COMMERCIAL BANKING

Jim Glassman is the Managing Director and Head Economist for Commercial Banking. From regulations and technology to globalization and consumer habits, Jim’s insights are used by companies and industries to help them better understand the changing economy and its impact on their businesses.

https://www.jpmorgan.com/commercial-banking/insights/global-role-us-dollar

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Anything from Namewee is always provocative…

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Why Malaysia’s Muhyiddin fears a free press

Malaysia’s new government is harassing and intimidating journalists in a fierce new clampdown on media freedoms

By NILE BOWIE
AUGUST 9, 2020

SINGAPORE – Advocates are sounding the alarm over a rapid deterioration of press freedom conditions in Malaysia following a series of police raids, arrests and interrogations of whistle-blowers and reporters who risk being jailed for years under draconian legislation often used to target the media.

Six journalists from Qatari broadcaster Al Jazeera are among those currently under criminal investigation for alleged sedition, defamation and transmitting offensive content after the network aired on July 3 a documentary chronicling Malaysia’s controversial treatment of undocumented migrants during the coronavirus pandemic.

In a separate case, Steven Gan, the editor-in-chief of the news organization Malaysiakini, widely considered the most popular independent media portal in Malaysia, faces contempt of court charges in connection with reader remarks posted in the comments section of an article that authorities said had threatened public confidence in the judiciary.

“We are already seeing a pattern where media freedoms are really being affected purely through the way certain media outlets or journalists are being targeted,” said Centre for Independent Journalism (CIJ) executive director Wathshlah Naidu. “This pattern can already show that there is a certain concerted effort by the government.”

Observers say the escalating crackdown on media and critical expression is driven by leadership insecurity. Prime Minister Muhyiddin Yassin presides over a fragile governing alliance with the slimmest parliamentary majority in the country’s history, and analysts are divided over whether his premiership will survive snap polls that could be called in 2021.

If Muhyiddin moves to consolidate power in bolder and more controversial ways in the months ahead, through the persecution of his political opponents, for instance, the suppression and intimidation of critical media and dissenting voices would give him greater room to maneuver while his administration’s nationalist messaging drowns out alternative views.   

Read more:

https://asiatimes.com/2020/08/why-malaysias-muhyiddin-fears-a-free-press/

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Aug 2, 2020,11:29am EDT

Intel, Nvidia, Et Al., And American Semiconductor Hegemony

George Calhoun
ContributorMarkets
Founder & Director of the Quantitative Finance Program and Hanlon Financial Systems Center at the Stevens Institute of Technology (New Jersey) and Advisory Board Member at Hanlon Investment Management

One thread in the fabric of alarmist political/economic commentary on American Decline has to do with the state of the semiconductor industry. Supposedly the U.S. is losing/could lose/has already lost leadership in this “critical” field of technology, the understructure of the digital economy, a loss which puts at risk practically everything we might care about – life (“Semiconductors are essential to modern life”), liberty (“American leadership in semiconductors also is vital to the technological superiority of the U.S. military”), and presumably happiness as well (Facebook, Youtube, Instagram and Netflix NFLX -2.8% all run on silicon)… 

Politicians, journalists and think tank analysts have been pushing this dire story year after year, decade after decade, administration after administration.
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The threat is (of course) China. According to The Boston Consulting Group, the game is probably already over…
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American Semiconductor Hegemony (more or less)

The story is all wrong. It is based on a crude misunderstanding of the structure of the industry. In fact, the U.S. is in firm control of the high ground in the semiconductor business, which dominates the rest of the industry (with one quasi-exception). 
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The Fabless vs. Foundry contrast

The difference between the Fabless and Foundry models is based on the economics of IC fabrication, which are staggering. A new IC fab plant can cost up to $20 Bn – about twice the cost of a Nimitz class aircraft carrier, three times the cost of a nuclear power plant – and an IC fab may have a useful lifetime of just a few years before it becomes technologically obsolete. The implications of this are significant, and mostly negative from a strategic standpoint. It is a scale-based business (as all heavy-capex industries are) and it is dominated today by one firm: Taiwan Semiconductor Manufacturing Company (TSMC). 

The Fabless model is “asset-lite.” They do not need to buy a new aircraft carrier every year, so to speak. Instead, they can invest in design talent and functional innovation. 

IDMs like Intel still do both. But the capital expenditure demands weigh heavily. Over time, a number of IDMs have surrendered to the economic logic and have split themselves into two pieces – a Fabless design firm and a foundry – to go their separate ways…

The confusion of these business models under the non-discriminating category “semiconductor companies” is surprisingly common.
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The first flag that the “Decline thesis” is invalid is the fact that 10 of the 14 firms listed here are American. One is Taiwanese, two are Korean. Only Hi-Silicon – a Fabless IC designer – is based in mainland China. HiSilicon is a fully owned subsidiary of Huawei, which puts them in the middle of the risky geopolitical chess game I have discussed elsewhere. Huawei takes about 90% of HiSilicon’s output – “output” which HiSilicon does not and cannot manufacture, but outsources to Taiwan’s TSMC (and perhaps others now).  

All in all, the American position, even by this crude tabulation, is strong. 
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In short, the U.S. controls the semiconductor world, and controls the direction of technological innovation. China is starting at the bottom, and it will be tough hill to climb. In the 21^st-century economy, value accrues to companies that control the “intangible” assets like design, brand, human capital (talent), loyal customers, and intellectual property. Traditional 19^th-century style “assets” like factories, machinery, inventories, accounts receivable, and even excess accumulations of cash begin to seem more like, well, liabilities. U.S. companies – in many segments of the economy, not just semiconductors — have figured this out. Except for Huawei – troubled Huawei – China is mostly still stuck in the industrial age.

https://www.forbes.com/sites/georgecalhoun/2020/08/02/intel-nvidia-et-al-and-american-semiconductor-hegemony/#4dc2f758c298

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Be careful in passing judgment

By ZAINUL ARIFIN
August 9, 2020 @ 12:10am
All the intense politicking is not doing our institutions any favour. The latest being the MACC over its decision to charge former finance minister and Penang chief minister Lim Guan Eng and his wife on several graft allegations. – NSTP file pic
All the intense politicking is not doing our institutions any favour. The latest being the MACC over its decision to charge former finance minister and Penang chief minister Lim Guan Eng and his wife on several graft allegations. – NSTP file pic
ALL the intense politicking is not doing our institutions any favour.

The latest being the Malaysian Anti-Corruption Commission (MACC) over its decision to charge former finance minister and Penang chief minister Lim Guan Eng and his wife on several graft allegations.

There seems to be little interest to discuss the merits or demerits of the case. Even before a single charge was read out, or evidence disclosed, or a witness questioned, a verdict has been reached. Opinions, predictably, are split along the political fault line.

I fear we may have lost the ability to look at anything beyond our narrow political leanings.

He is either guilty or a victim of political persecution; either there is evidence against him or he has enemies entertaining ways to do him in. The MACC is an inconvenience as far as how the conclusions are reached, but is instrumental in the narratives told.

The MACC, it is suggested, is being used by the government to go after its political enemies, of which Guan Eng is one.

If that is the case, can we assume more MACC action against other enemies of Perikatan Nasional and Tan Sri Muhyiddin Yassin?

While we can readily accept members of the public harbouring this sort of opinions — the coffee shops are already raging with the slings and arrows of conspiracy theories—should we expect those who should know better, including those who had held some of the highest offices in the land, to be less free with their unverifiable “gut instinct”?

I get that some people are unhappy Guan Eng and wife are charged by the MACC, but the cases have yet to bear out. Incidentally, they may even be the same people who applauded the MACC for its action against former premier Datuk Seri Najib Razak and wife.

I am not equating one set of charges and circumstances with another, lest supporters of either one get up in arms. But it is the same MACC that made the arrests.

The same MACC, minus the previous head, that did the investigations and put together the investigation papers and prepared the charge sheets. It is a constant — the same people, more or less, were responsible for Najib’s case, and presumably for Guan Eng’s, too.

The MACC is still presumably driven by the same agenda to rid the country of corruption.

Yet, the MACC is doing a good job, unless he is after our guys.

We have to be careful in passing judgment and emoting political motives in cases such as this.

While we understand some political grandstanding is to be expected — statements aimed at stirring the anger and righteousness of the constituents—politicians must try to weigh the consequences of what they say on public institutions such as the MACC, the judiciary, law enforcement agencies and the civil service.

We understand the politics and chipping at the reputation of institutions by insinuating nefarious political schemes do work.

Yet, while seemingly effective in the short run, it can be bad for the country over time.

Every one of our politicians knows the long-term damage their comments can have on these institutions, but they cannot resist the cheap shots when their political instincts take over.

All statements are made without any evidence or corroborating evidence — or was it how it was last time when institutions were used by the executive? Almost click-bait in nature, are to be turned into headlines and news bites, and shared ad-infinitum to raise our ire and anger against whomever the target may be.

It just occurred to me that the judiciary, which is now received with renewed enthusiasm over Najib’s verdict, may be a subject to scorn if it were to arrive at the same decision against his opponents. And the judge who presided over the trial, now heralded as a national hero, may just fall on the sword of political convenience.

It is, of course, a lonely path to take for the MACC and other institutions, if indeed they are governed by standards and procedures, and are doing their job without fear or favour.

I suppose if every side of the political divide is not happy at any point, it must be doing okay.

However, it is, of course, in politically dangerous choppy waters, and many are quick to use it as political convenience.

I have no issues with politicians calling one another names. They are thick-skinned enough to take it.

Yet, the deliberate erosion of public confidence in institutions cannot be easily reversed, even if there were to be a change in government, or the ones in the opposition were to gain control.

The writer, a former NSTP group managing editor, is now a social media adviser. He can be reached at zainulisa@gmail.com

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August 08, 202008:51

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.

Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.

Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.

Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.

“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.

“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.

https://www.arabnews.com/node/1716426/business-economy

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Datuk Zarul Ahmad Mohd Zulkifli is currently the senior executive director of Consortium Zenith Construction Sdn Bhd.

He claims to have been cheated of RM19 million.

G Gnanaraja was accused of cheating Consortium Zenith Construction Sdn Bhd executive director Zarul Ahmad Mohd Zulkifli of RM19 million between July and August 2017 at various locations in Petaling Jaya and Kuala Lumpur.

Gnanaraja was said to have deceived Zarul into believing that he could help the latter close money laundering investigations against him by the Malaysian Anti-Corruption Commission (MACC).

Ex Datuk Seri Gnanaraja Gnanasundram (DSG): Charged for cheating over the Penang Undersea Tunnel Project…

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PN’s revenge politics
By Mariam Mokhtar in Malaysiakini
https://www.malaysiakini.com/columns/537694

COMMENT | Sometimes, you realise the true character of a person, by way of a photo, or deed.

The photo of Hishammuddin Hussein, vaping in Parliament (above) showed his arrogance, a mark of disrespect for his colleagues and contempt for Parliament. Worst of all, it proves that Hishammuddin is an ineffectual and “rules-don’t-apply-to-me” Umno-Baru politician. He only apologised because he had been exposed.

Muhyiddin Yassin’s denouement came with his infamous “I am Malay first, Malaysian second” remark. Rewarding those who supported his back-door entry into Putrajaya plunged the nation into a state of pessimism. His popularity is fragile and he has done untold damage to the Malay psyche and community.

The new Dewan Rakyat Speaker, Azhar Azizan Harun, giving the thumbs-up sign with 17 of his new friends whilst feasting on an expensive snack of freshwater prawns, was an insult to the rakyat. Sandwiched between Muhyiddin, and the racist and sexist Abdul Azeez Abdul Rahim, the former social activist had no qualms about dining at the rakyat’s expense. We know where Azhar’s loyalty lies.

Azhar also knows on which side his bread is buttered. When former finance minister Lim Guan Eng repeatedly asked Zafrul Abdul Aziz if the US$3.9 billion settlement by Goldman Sachs had been agreed by the cabinet, Speaker Azhar leapt to Zafrul’s defence. Parliament descended into chaos and again, Azhar failed to control the Dewan.

In the case of the felon Najib Abdul Razak, it was not a photo but a video which showed that he was born with a golden foot in his mouth.

A week after his conviction, Najib made a seven-minute video pleading innocence. He claimed that the SRC International money had been used for Umno-Baru’s “welfare programmes” and “corporate social responsibility” (CSR) initiatives for orphans and that none had been used for himself.

Throughout his trial, Najib denied that RM42 million had been transferred into his personal bank account. He said, “… I’m not so stupid as to put stolen money into a personal account.”

Najib can fool the likes of his most loyal lackey Ramesh Rao, his gullible followers and the Mat Rempits who were allegedly lured with RM50 to appear at the High Court Complex to support him; but he cannot deceive the majority of the thinking public.

When he claimed that the SRC money had been used to help the orphans, he just admitted that he made the orphans recipients of stolen money.

When he said he gave some money to Umno-Baru’s welfare programmes, he ignored the conflict of interest when giving public money to his own political party.

Najib is no Robin Hood. Nottingham’s Robin Hood robbed the rich to give to the poor because England was ruled by an oppressive king. In sharp contrast, Najib robbed the rakyat to enrich himself, his spouse and their cronies.

A hoodlum is a thug who engages in crime and violence, and in America, the slang for hoodlum is “hood”. It would be correct to call the felon Najib a “Robbing Hood” – someone who robs, but not Robin Hood.

Najib’s alleged theft from 1MDB has saddled Malaysia with an RM1.2 trillion national debt. Our children and grandchildren will suffer.

People blame Dr Mahathir Mohamad for the rot in Malaysia, but remember that successive prime ministers did nothing to correct this decline and reverse his policies. They only perfected the corrupt system to enrich themselves.

Many senior Umno-Baru/BN politicians and high ranking civil servants cashed in. They sold out the Malaysian rakyat. They made money from corruption in public office, and on retirement, were parachuted into GLCs or private firms to earn more millions of ringgits. Military men became defence contractors. Former political aides became lobbyists or public relations experts advising the government on foreign policy.

Under Mahathir, Abdullah Ahmad Badawi, Najib (and now Muhyiddin), dissenters were silenced. This is how you destroy governments. Members of the bullied bureaucracy learnt to keep their heads down or were seduced into the rotting system. They were cowed, corrupted or crushed.

At the time of writing, Lim Guan Eng has been arrested by the MACC and will be charged in the morning. The timing is obvious. With a general election in the pipeline, questions being asked about PN’s handling of the Goldman Sachs issue in the 1MDB saga, and the royal intervention in Abu Dhabi’s IPIC scandal, it would be judicious to get Lim out of the way.

As a former finance minister, Lim has the knowledge and the wherewithal to scrutinise the answers given by his successor, Zafrul.

Moreover, PN hopes to weaken the DAP and demoralise the Opposition (Pakatan Harapan), by charging Lim.

In the days and weeks to come, principled people who cannot be swayed to join PN may also be harassed.

A vaccine may be found for coronavirus, but only the will of the people can stop the destruction of Malaysian democracy. If we do not act fast, the damage may be irreversible. Now is not the time to give up.

MARIAM MOKHTAR is a defender of the truth, the admiral-general of the Green Bean Army and president of the Perak Liberation Organisation (PLO). Blog, Twitter.

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There is no one unified Global net but several global spheres…

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Firewall + Great Wall of China = The Great Firewall of China

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The Great Firewall of China (GFW; simplified Chinese: 防火长城; traditional Chinese: 防火長城; pinyin: Fánghuǒ Chángchéng) is the combination of legislative actions and technologies enforced by the People’s Republic of China to regulate the Internet domestically. Its role in Internet censorship in China is to block access to selected foreign websites and to slow down cross-border internet traffic.^[1] The effect includes: limiting access to foreign information sources, blocking foreign internet tools (e.g. Google search,^[2] Facebook,^[3] Twitter,^[4] Wikipedia,^[5][6] and others) and mobile apps, and requiring foreign companies to adapt to domestic regulations.^[7][8]

Besides censorship, the GFW has also influenced the development of China’s internal internet economy by nurturing domestic companies^[9] and reducing the effectiveness of products from foreign internet companies.^[10] The techniques deployed by the Chinese government to maintain control of the Great Firewall can include modifying search results for terms, such as they did following Ai Weiwei’s arrest, and petitioning global conglomerates to remove content, as happened when they petitioned Apple to remove the Quartz business news publication’s app from its Chinese App Store after reporting on the 2019–20 Hong Kong protests.^[11][12]
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The term Great Firewall of China is a portmanteau of firewall and the Great Wall of China, and was first used in print by Geremie Barmé in 1997.^[15][16] The term started its use in Beijing in 1996 by Stephen Guerin of Redfish Group, a Beijing-based web consultancy. 1996 interviews of Guerin by CNN’s Andrea Koppel and NPR’s Mary Kay Magistad included Guerin discussing China’s “reversing the firewall”.^[17][18]

https://en.wikipedia.org/wiki/Great_Firewall

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Welcome to the ‘splinternet’: Trump adds to fractures in worldwide web

The U.S. has mostly opposed the balkanization of the internet into global factions, but experts said two new executive orders may help change that.

Aug. 8, 2020, 6:07 AM +08By David Ingram

It may not be possible to have a worldwide internet, after all.

Tech policy experts said Friday that the idea of the internet as one global, unifying phenomenon was at stake after President Donald Trump took the sudden step of announcing bans on two popular Chinese apps, TikTok and WeChat, calling them security risks.

It was an extreme example of Trump using security powers to stifle the spread of technology, and people who study how the internet is governed said his orders will only worsen an international breakup along regional and political lines that’s already years in the making.

“This is definitely the splinternet,” said Dipayan Ghosh, a former Obama White House tech adviser who now directs the Digital Platforms & Democracy Project at the Harvard Kennedy School.

“We’re seeing increasing division between the U.S., Russia, China and the E.U., and clear factions are starting to develop. I don’t think it’s helpful, coming especially as it is from a politicized administration,” he said.

Trump’s action took the form of two executive orders. The one about TikTok in effect formalized a deadline for Microsoft’s ongoing talks to buy much of that company. The other order said the U.S. would ban “any transaction that is related to WeChat by any person” starting in 45 days.

https://www.nbcnews.com/tech/internet/welcome-splinternet-trump-adds-fractures-worldwide-web-n1236203?cid=sm_npd_ms_tw_ma

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