Just seeing shadows?

"Twenty years ago, Lawrence Summers came up with a particularly graphic analogy for market crises: airplane crashes," wrote W Pesek. Markets, like jet planes, are usually safe and beneficial, but when they crash the result is spectacular. Summers used to believe that the core center of developed countries can withstand a fall in peripheral markets, but no longer. Now he thinks that any serious event will affect the whole world. Markets "are going gangbusters" and so are vulnerable, " Say if Wall Street hit a 2008-like wall. China's debt meltdown arrived or Washington started a trade war. A major terrorist attack, conflict on the Korean peninsula, confrontation in the South China Sea or troubles in Iran or Pakistan could slam markets." While Pesek is critical of "the US being in the hands of of a leader threatening trade wars, redistributing wealth to the top 1%", Prof D Rodrik wrote, "Multinational corporations and investors have increasingly shaped the agenda of international trade negotiations" and have captured "autonomous agencies by the industries they are supposed to regulate". Rodrik thinks that while one should be wary about political populism, "Economic populism, by contrast, is occasionally necessary." Rodrik has been warning about the dangers of globalization for sometime. China has ambitions of making its currency, the yuan, a reserve currency like the dollar. The International Monetary Fund added the yuan to its basket of Special Drawing Rights in 2016 with a weight of over 10%, which means that the yuan should be freely tradable, but that has not happened. Only Pakistan central bank has allowed trade based on the yuan. Instead of allowing free exchange of the yuan China restricts its citizens from converting yuan to other currencies. Even as the IMF added the yuan to its SDRs, VA Nageswaran wrote that there is no chance of it becoming an international currency in the near future, because the power of the Communist Party means that it can never become fully open. Emerging markets could see a "reality check" in 2018, said an article in Bloomberg, as the Federal Reserve tightens its monetary policy, growth slows in China and the chance of high inflation in Turkey. Higher taxes to balance the budget led to riots across Iran, with protesters calling for death to the Supreme Leader, Ayatollah Ali Khamenei. However, some good may come out of economic problems. North Korea held talks with the South and has pledged to send a delegation to the Winter Olympics which start next month. A military intervention could become necessary in Venezuela to free the people from the scourge of Nicolas Maduro, wrote Prof R Hausmann. "As the Venezuelan situation becomes unimaginable, the solutions to be considered become inconceivable." Diverse septic spots could merge into a collapse. The danger is real.