In previous posts we have discussed the belief among many states that Germany’s insistence on balanced budgets and a trade surplus is depressing demand in the global economy. Many of those states believe that Germany should take steps to increase domestic spending in order to stimulate purchases of foreign goods and services, thereby stimulating the global economy. The German reluctance to do so rests on its memory of the hyperinflation of 1923–increased government spending always carries with it the risk of greater inflation. The Economist has run an article that describes how this historical experience shapes current German policy.
It appears as if the US and Afghanistan have agreed on the status of American forces that will remain in Afghanistan after all US combat troops leave in 2014. The role of those forces will be merely to “train, equip, and assist” according to US Secretary of State Kerry. According to CBS News: “The Bilateral Security Agreement is a sweeping document that incorporates the usual Status of Forces Protection Agreement, which the U.S. signs with every country where its troops are stationed. The document covers everything from taxation and customs duties to a promise to protect Afghanistan from hostile action.” The Agreement needs to be ratified by the Loya Jirga which is he traditional ruling council of Afghanistan.
The process of globalization accelerated in the last 30 years, but the financial crises of 2007-08 which reverberated across the globe has led some analysts to think that the world is snapping back to a more nationalist orientation toward economic policy. At some level this conclusion seems substantiated. For example, many countries are certainly using currency valuations to protect their export markets. On the other hand, there is plenty of evidence, as described by Time magazine, to believe that globalization is still proceeding at a very fast rate.
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