There is definitely a conscious effort on the parts of Chancellor Merkel and her cohorts like Jörg Asmussen, Member of the Executive Board of the ECB and a fellow German, to impose their ideological approach to the European crisis. However, it is increasingly looking like a failure of leadership. She is working hard to lower…
For the first time since November 2008, the People’s Bank of China has cut the key lending rate by 25 basis points. “The changes indicate mounting concern in Beijing over slowdown of growth,” said Credit Agricole CIB economist Dariusz Kowalczyk in a report. Like other emerging economies, the Chinese economy is also feeling a drag and…
Paul Krugman thinks that by doing nothing, ECB is destroying the euro and is trying to put itself out of business. Oh, and survey data suggest that the euro area economy is really plunging now, plus Spain is on the brink. What about inflation? It’s falling fast — which is a bad thing under the circumstances. I…
Last month the Reserve Bank of Australia (RBA) cut rates by 50 basis points. If it cuts rates again in its June meeting on Tuesday, Australian banks may still not pass on the full difference to borrowers like last time. The market, on the other hand is rooting for a big cut. Financial markets, however, are already raising their bets that…
Influential Australian business leaders are urging RBA to cut rates in its June 5th meeting: The chief economist at AMP Capital, Shane Oliver, who is pushing for the cut, said he did not expect it to be fully passed on to borrowers. “That’s one of the reasons the Reserve Bank should and will cut 50 points,” …
The villagers of indomitable Gauls had superhuman powers thanks to the magic potion brewed by their druid, Getafix. Those Gauls were supremely confident in resisting the mighty Roman Empire and repeatedly trouncing its powerful armies. Their biggest fear was that the sky will fall on their heads. The country of USA also has ‘super-economic’ powers.…
Economist Paul Krugman recently gave an interview to German magazine Der Spiegel in which he argues that this is not the time to worry about debt and inflation. Here are some choice excerpts: On Greece leaving the euro zone: What happens if Greece leaves? Then you have again a bank run in other peripheral countries because they’ve set…
Minneapolis Federal Reserve Bank President Narayana Kocherlakota is an inflation hawk, who thinks that the US economy is close to maximum employment. Kocherlakota said that, for him, the inflation rate is key to determining how close the Fed is to the maximum achievable level of employment or the minimum achievable level of unemployment. And the signals are…
William K. Black of New Economic Perspectives writes that ex-President of ECB, Trichet is suggesting that EU give Greece a treatment that Governor Rick Snyder of Michigan gave to Benton Harbor: Michigan Governor Rick Snyder secured passage of “Public Act 4, the Local Government and School District Fiscal Accountability Act. The Act allows the Governor to appoint…
Economist Nouriel Roubini believes that the Greek euro tragedy is nearing its final act and the country will exit the euro either this year or next year. He says that Greece is stuck in a vicious cycle of insolvency, lost competitiveness, external deficits, and ever-deepening depression and the all the solutions that might improve Greece’s competitiveness require…
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