IMF Official Warns of Risk of Cold War II: U.S. and China

A Turning Point: Are We on the Brink of Cold War II?

The first deputy managing director of the International Monetary Fund (IMF), Gita Gopinath, addressed the topic of "Cold War II" during her speech at the 20th World Congress of the International Economic Association. She emphasized that we are at a turning point and discussed whether we are on the brink of a new Cold War.

Parallels and Differences with the Cold War

Gita Gopinath compared the current situation to the Cold War era, highlighting the key differences between the two. While the Cold War involved the U.S. and the Soviet Union, today it is the U.S. and China that are the major players. However, she pointed out that the stage on which these forces are unleashed is fundamentally different now.

Increased Economic Interdependence

One significant difference Gopinath noted is the higher degree of economic interdependence between countries today. With economies more integrated into the global marketplace and complex global value chains, global trade as a percentage of GDP has risen to 60%, compared to 24% during the Cold War. This increased economic interdependence raises the costs of fragmentation.

Greater Uncertainty and Swings in Ideology

The IMF official also highlighted the greater uncertainty in today's world, with swings in the ideology of political leadership within countries. This makes it difficult to predict allegiances and further raises costs. She emphasized the importance of not losing sight of the gains from open trade and advocated for a multilateral rules-based trading system and the institutions that support it.

The Economic Costs of Cold War II

While Gopinath acknowledged that there are currently no signs of a broad-based retreat from globalization, she warned that fault lines are emerging, and geoeconomic fragmentation is becoming a reality. If fragmentation deepens, there is a risk of entering a new Cold War. The economic costs of such a scenario could be significant, as the world has become more integrated, and there are unprecedented common challenges that a fragmented world cannot effectively tackle. Emerging and developing countries would face the biggest losses, and even those who initially benefit from fragmentation would ultimately lose in a full-blown Cold War.


In conclusion, the IMF official's warning about the risk of Cold War II between the U.S. and China highlights the potential economic costs and challenges that a fragmented world would face. It is crucial for policymakers to advocate for a multilateral rules-based trading system and institutions that support it to preserve the gains from open trade.

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$6 per month is the Individual Retirement Account Fee (IRA). This includes account maintenance fees and investment costs for your chosen investments.

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  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
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  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (

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How To

Three ways to invest in gold for retirement

It is crucial to understand how you can incorporate gold into your retirement plans. There are many ways to invest in gold if you have a 401k account at work. It is also possible to invest in gold from outside of your work environment. You could, for example, open a custodial bank account at Fidelity Investments if your IRA (Individual Retirement Account) is open. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.

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  1. Buy Gold with Your Cash – Don't use credit cards or borrow money to fund your investments. Instead, instead, transfer cash to your accounts. This will help protect you against inflation and keep your purchasing power high.
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By: Kevin Helms
Title: IMF Official Warns of Risk of Cold War II: U.S. and China
Sourced From:
Published Date: Wed, 13 Dec 2023 03:30:24 +0000

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