mandag 14. august 2017

How Trump v Kim can wreck the world economy without a shot being fired

Full marks for timing, Mr President. Last week marked the 10th anniversary of the start of the biggest financial crisis since the Great Depression, making it an appropriate moment for Donald Trump to threaten North Korea with obliteration. One of the few achievements Trump can point to in his first six months in office is that shares on Wall Street have been steadily rising since his election victory last October. The “fire and fury” remark and the inevitable counter blast from Kim Jong-un gave the markets pause for thought. But not much more than that.

All things considered, the financial markets took the Kim and Trump show in their stride. Sure, there was a sell-off in shares and the customary flight to safe haven assets such as gold and the Swiss franc in times of heightened tension. But nothing to touch the panic of a decade ago, when the markets suddenly froze up and banks refused to lend to each other.