In The News

The Markets Prey on Debt-Laden Nations

Joergen Oerstroem Moeller January 17, 2011
The world has gross savings of more than $61 trillion, reports the International Monetary Fund. Those holdings are highly imbalanced: China’s surplus is more than $4 trillion while the US owes $14 trillion. Investors relentlessly detect and predict trends in pursuit of higher profits. Japan, the US and many European nations carry high debt loads. The financial markets are impatient with low...

China Extends Help to Tackle Euro Crisis

Jamil Anderlini December 31, 2010
The EU is China’s biggest export market: Trade for 2010 is up by more than 30 percent over 2009 levels. China, not wanting its huge customer base to struggle, purchases European bonds and assists in financial stabilization. “China classifies the composition of its foreign exchange reserves as a state secret and European and US officials say it is often very hard to determine the true scale of...

Brace for Change as the Global Economic Order Crumbles

Jeffrey E. Garten December 13, 2010
Asia increasingly accounts for a greater share of global revenues and financial clout. Yet power in global institutions, like the International Monetary Fund or the World Bank, is weighted toward the United States and other developed economies. Transition is underway in the global economic order. Jeffrey E. Garten, Yale University international trade and finance professor, warns that adjustment...

The G20: Captive in the Prison of Mercantilism

Ernesto Zedillo November 13, 2010
The G20 meeting of the world’s major economies concluded in Seoul without a serious plan for coordinating macroeconomic policies. Since the first G20 meeting in November 2008, global leaders have recognized that inconsistent, poorly coordinated policies spurred the global economic crisis along. But behaving like the mercantilists of old rather than world powers in the 21st century – delivering a...

Only the Weak Survive

Nouriel Roubini November 12, 2010
Export giant China has resisted revaluation of the renminbi. Eager for exports, nations follow China’s lead, increasingly engaging in competitive currency devaluations. These maneuvers exacerbate global imbalances already huge. “A world where over-spending countries need to reduce domestic demand and boost net exports, while over-saving countries are unwilling to reduce their reliance on export-...

G-20 to Push Current Balance Guidelines

Kim Yon-se November 12, 2010
The G-20 meeting in South Korea closed with assurances that leaders of the world's largest economies would set up a warning system on excessive current-account imbalances. The leaders rejected US proposals that would have placed specific caps on surpluses or deficits. The G-20 also agreed to refrain from currency manipulations and to allow the markets to direct currency values; pursue stable...

G-20 Pledges to Avoid Devaluations in Push to Defuse Global Trade Tensions

Simon Kennedy, Eunkyung Seo October 26, 2010
Relatively low currency values make a nation's exports more attractive for global customers. Before global recession struck, the US and other nations protested artificially low values of China's currency. Heeding the warnings, China insisted on a gradual rise in value. To counter global recession and boost domestic spending, the US and others pumped currency into markets, essentially...