In The News

Australia Foreign Debt Reaches Crisis Proportions

Philip Bowring June 29, 2016
Australia confronts declining prices in commodities, a shrinking currency and net foreign debt that exceeds A$1 trillion. “Servicing the long-term debt problem is an increasing concern, particularly if US interest rates begin to rise while commodity prices do no more than stabilise around current levels,” writes Philip Bowring for the Asia Sentinel. “Direct foreign investment is weakening because...

Central Banks Are Already Doing the Unthinkable - You Just Don't Know It

Mehreen Khan March 21, 2016
International Monetary Fund staff have called the past eight years an “era of extraordinary monetary policy,” with central banks applying more than 600 interest-rate cuts since 2008. “But the new wave of policy accommodation has ushered in fresh panic that monetary policy is suddenly subject to dwindling returns,” explains Mehreen Khan for the Telegraph. The focus on debt and limited spending...

Bank of Japan Stuns Global Markets by Announcing Negative Interest Rates

David Scutt January 29, 2016
The Bank of Japan narrowly approved a three-tiered system on rates including one in the negative territory, -0.1 percent for “excess reserves parked at the bank by financial institutions,” reports David Scutt for Business Insider Australia.The move essentially encourages lending and charges banks for storing cash. The central bank also announced further rate cuts may be issued as needed. “The BOJ...

How the Fed's Rate Hikes May Impact Asia

December 20, 2015
The US Federal Reserve responded to the 2007 financial crisis by reducing interest rates to stimulate spending and investment. Analysts since warned that a rate lift “could pose a challenge to a number of emerging market economies – particularly across Asia, a top exporter to the US – by pushing up bond yields, augmenting capital outflows and depreciating currencies,” reports Deutsche Welle. The...

Renminbi Joins the IMF’s Reserve-Currency Basket

December 1, 2015
Only a few goods and services are priced in what are known as Special Drawing Rights, or the mix of currencies used by the International Monetary Fund as a unit. Transit through the Suez Canal are one such service. The Chinese renminbi joins other currencies like the US dollar, the euro and Japanese yen for the IMF basket. Because so few items are priced such way, the Economist points out many...

There Is Only One Way to Defeat ISIS

Charles P. Pierce November 20, 2015
High-cost military equipment like fighter jets or missile defense shields won’t stop coordinated terrorist attacks like those in Paris against youth enjoying city life on a Friday night. Intrusive surveillance won’t prevent brothers, roommates or loners contemplating suicide and plotting murder, argues Charles Pierce for Esquire: “Abandoning the Enlightenment values that produced democracy will...

Is It Time for Global Money?

Larry Hatheway and Alexander Friedman November 18, 2015
A fragmented set of currencies pose some risks, argue Larry Hatheway and Alexander Friedman for Project Syndicate, and a global currency could reduce currency wars and increase efficiency and price transparency. But such a currency is unlikely because the system would require legitimacy unavailable beyond the level of national-state. “At the supra-national level, legitimacy remains highly...