Brad Setser on the dollar and the world's trade imbalance

Brad W. Setser, Senior Fellow at the Council on Foreign Relations and one of the most respected voices on global capital flows, joins us for a wide-ranging conversation on what is driving the dollar today, why China's export boom is a problem for the whole world, and what happens if the AI bubble bursts.

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0:00 – Introduction

2:38 – History of Dollar Strength & What Drives It

5:26 – AI & Private Capital Flows into the US

9:08 – Strait of Hormuz Crisis & Oil Markets

12:49 – UAE Leaving OPEC: What It Signals

15:21 – Why Surplus Countries (China, Korea, Taiwan) Keep Buying Dollars

19:23 – Origins of Export-Led Growth: Asia's Dollar Accumulation

27:38 – What Should China Do to Fix Its Imbalances?

34:24 – Is Export-Led Growth Still Viable?

39:31 – Deglobalization: Is It Actually Happening?

45:45 – Trump-Xi Summit: Who Has the Leverage?

48:44 – Trump's Industrial Policy vs. Biden's CHIPS Act

52:42 – Brad's Experience Translating Research into Policy

56:07 – How Countries Creatively Reroute Trade & Hide Capital Flows