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