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“We’ve had a trend for most of the past 200 years: GDP of countries like China and India went down while the West surged. That’s now changed. Emerging economies will go up, and your children in the West will have a lower standard of living than you did. Absolutely. We won’t sink to the bottom of the sea. But other countries will grow much faster than us. The world is very competitive, and the odds are stacked against us. Americans, with their inborn arrogance, will not let it go that easily, so there will be lots of tension going forward.”
Ebay is offering a well-thumbed volume of "Dying of Money: Lessons of the Great German and American Inflations" at a starting bid of $699 (shipping free.. thanks a lot). The crucial passage comes in Chapter 17 entitled "Velocity". Each big inflation -- whether the early 1920s in Germany, or the Korean and Vietnam wars in the US -- starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.
This is not a picture of America, or Britain, or Europe in 2010. But we should be careful of embracing the opposite and overly-reassuring assumption that this is a mild replay of Japan’s Lost Decade, that is to say a slow and largely benign slide into deflation as debt deleveraging exerts its discipline.
Japan was the world’s biggest external creditor when the Nikkei bubble burst twenty years ago. It had a private savings rate of 15pc of GDP. The Japanese people have gradually cut this rate to 2pc, cushioning the effects of the long slump. The Anglo-Saxons have no such cushion.
There is a clear temptation for the West to extricate itself from the errors of the Greenspan asset bubble, the Brown credit bubble, and the EMU sovereign bubble by stealth default through inflation. But that is a danger for later years. First we have the deflation shock of lives. Then -- and only then -- will central banks go to far and risk losing control over their printing experiment as velocity takes off. One problem at a time please.
EUR Libor at 0.83063%, Euribor at almost 0.9%, and top tier European Commercial Paper are now at their worst levels since about a year ago. The stress test came and went, and the market couldn't care less.
Oil falls a second day after US supplies gain, Consumer confidence drops.
The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.
That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings."
With U.S. government debt already at a level that is high by historical standards, and the prospect that, under current policies, federal debt would continue to grow, it is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis. It is also possible, however, that investors would lose confidence abruptly and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries.
Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States.
California Gov. Schwarzenegger orders furloughs: report
"bailing out the financial system went directly against our shared beliefs in free markets and fair play."
And then there is a camp in the middle—defending last year's stimulus, but urging a deficit-cutting plan now.
Previously, foreign corporations could legally spend money on American elections only through their political action committees. Now, however, U.S. subsidiaries of multinational corporations can spend directly on advertising for and against candidates and issues, although foreign individuals are barred from being involved in the spending decisions.
“The court has, in effect, legalized foreign governments and foreign corporations to participate in our electoral politics,” said Pat Choate, an author and former Reform Party candidate for vice president, told Politico. “It’ll happen instantaneously. It’ll happen in the 2010 elections. … The Japanese corporations, the European corporations will do it instantly through American subsidiaries.”
The DISCLOSE Act would seek to close the loopholes created by Citizens United by banning electioneering by any corporation when foreign nationals control 20 percent or more of the voting shares, a majority of the board of directors are foreign nationals, or if a foreign national runs the U.S. subsidiary.
But with united Republican opposition and holding only 59 seats, Democrats did not have the votes to break a Republican filibuster and bring the measure to the floor for a final vote. The final tally in a straight party-line vote was 57 to 41, three votes short of the three-fifths majority required to defeat Republican stall tactics. The House passed the measure earlier this year with only two Republican votes
Johannesburg - Despite concern over global unemployment and Europe's debt issues, world trade seems to be healthy - judging from shipping container volumes. In a recent newsletter to clients, Stanlib director Paul Hansen pointed to an 18% year-on-year rise in container volumes, remarking "world trade is strong in 2010". Information was collected by Macquaries Equities Research among 200 container ports in 58 countries. This confidence, however, does not seem to reflect in the share price of JSE-listed shipping group Grindrod [JSE:GND]. Since April, the share has slid from a high of 1 730c to trade at around 1 420 cents per share. However, when Grindrod reported its full-year results in February, CEO Alan Olivier was upbeat on activity levels. "The improved economic activity - mainly driven by growth in China and India - has led to increasing commodity demand, generally higher commodity prices and a substantial rise in trade volumes." While container data would suggest the economy is on the rebound, there have been a number of shocks around the world. These include a perceived slowdown in economic activity in China, and recent data showing a sharp decline in the US markets. If either of these heavyweights lose momentum, it could have a negative effect on global economic growth. - Fin24.com
“[this economic condition] has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.”
Gross domestic product expanded at a 2.4 percent annual rate, the Commerce Department said in its first estimate, after a revised 3.7 percent growth pace in the January-March quarter.
Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 2.5 percent rate in the second quarter. The government had previously estimated a 2.7 percent growth rate for the first three months of this year.
Actually it will surpass US before the end of the year, or that is what is been prognosticated so far.
The stand-off between striking truck drivers and authorities in Greece intensified today hours after the government issued an emergency order to force protesters back to work. With fuel shortages stranding thousands of tourists and disrupting supplies of food and medicines nationwide, prime minister George Papandreou resorted to emergency legislation, more usually used at times of war or great natural disaster, to end the walk-out.
The prime minister, George Papandreou, resorted to emergency legislation late on Wednesday, telling the drivers that unless they returned to work they would face stiff fines and their vehicles being requisitioned. It was the fourth time since the end of military rule in 1974 that a mobilisation order – usually announced at times of war or great natural disaster – has been issued by a government. "This is an unpleasant decision … but the country cannot afford adventures in the middle of the summer," Papandreou said.But the reaction was swift and unforgiving. "It is highly unusual that after just three days of going on strike we should be mobilised in this way," said Giorgos Stamos, a member of the truck drivers' union. "The order is coming through to [drivers] but I have no idea how they are going to react to it." In a culture where workers' rights are seen as sacred, the mobilisation call has riled unionists with the KKE communist party newspaper, Rizospastis, declaring that the government was bent "on smashing every striker's right". "There is nothing left but to gather forces and fight," it proclaimed from its front page.
Last year, America accounted for 19.9 percent of the world’s 8.6 trillion manufacturing output, amounting to 1.7 trillion worth of goods.
China was hot on America’s heels. Beijing was responsible for 18.6 percent of the world’s manufacturing output and 1.6 trillion worth of goods.