In The News

Globalized Inflation

Joachim Fels June 20, 2008
Intricate connections between global economies – including trade treaties, exchange rates and foreign investment – prevent individual nations from completely controlling how their individual economies are molded. Low US interest rates have fueled a credit crisis and inflation so drastically as to render ineffective any region’s effort to staunch inflation. The inability of other regions, like...

Oil Currency Hypocrisy

Kenneth Rogoff June 17, 2008
The internet and instant communication quickly expose inconsistent policies, even in the most technical of areas. An example of such inconsistency, according to economist Kenneth Rogoff, is US policy on currency exchange rates. The US simultaneously criticizes Asian countries for manipulating currencies, preventing them from appreciating faster against the dollar, while supporting elaborate...

Paulson Financial Regulation Reform Plan Already Faces Discounting

April 4, 2008
The mortgage-backed securities crisis has resulted in turmoil in the global markets, but politics could get in the way of any quick fixes of the US financial system, reports Thomson Financial News. Three short-term recommendations in the proposal from Treasury Secretary Henry Paulson include expanding a presidential working group on the financial markets; establishing a federal commission to...

Weak Dollar Feels New Stress

Joanna Slater March 12, 2008
Most countries around the world are fighting a trend of global inflation by tightening their currencies, allowing the values to rise. That places pressure on a declining US dollar, writes Joanna Slater for the Wall Street Journal. A declining dollar contributes to rising prices for raw materials like oil, which in turn contributes to inflation. “The inflation dilemma is at its most stark in...

It's the Dollar, Stupid

Judy Shelton March 6, 2008
As many in the US fret about a failing economy, other countries express specific concern about a falling dollar. The US dollar is the world’s key reserve currency and yet US leaders limit their focus on domestic policy, shrugging about global worries, explains author Judy Shelton, in an opinion essay for the Wall Street Journal. She offers a reminder that currency woes contributed to the Great...

Why Spanish Banks Seem Immune to the Subprime Virus

February 20, 2008
The subprime crisis that originated in the US – with lenders giving out mortgages to many people who could not afford future payments – has begun to weaken European banks as well. Credit-rating agencies assured investors that US mortgages were a safe investment, and banks purchased securities packages that included problem loans. As prices for homes in the US market fall and homeowners struggle...

The Dollar and the Market Mess

Bill Wilby January 29, 2008
Recent steps by the US Federal Reserve to lower interest rates, in an effort to stabilize global financial markets, directly contribute to a decline in the value of the dollar. That in turn leads to increases in inflation and oil prices. As a result, the dollar is in danger of losing its reserve currency status, writes equities analyst Bill Wilby for the Wall Street Journal. “The real economic...