Topic: Monetary Policy

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Hollande's victory: The world ponders a major shift

François Hollande's victory may represent change for not just France, but Europe as a whole.
A hard landing for China? Six top economists weigh in.

China's economy grew 8.9 percent last quarter, the slowest pace in 2.5 years, and on Monday Premier Wen Jiabao cut the nation's growth target for 2012 to 7.5 percent, an eight-year low. Worries of a Chinese hard landing, defined as a sharp and sudden deceleration in growth, have gained momentum. However, China has been proactive in its efforts to prevent a hard landing. It has fine-tuned its policies to curb inflation, boost domestic consumption, and prevent a housing bubble. The Chinese government intervened heavily from 1989 to 1991 to cool its economy, causing real growth in gross domestic product to plunge to 4.1 percent in 1989, from 11.3 percent the previous year. It stepped in again in 1993. And some argue that this time around it's no different, and that the government knows exactly what it is doing. So we asked six top China analysts whether they saw a hard or soft landing scenario and what we should keep an eye on.
What can be done to create jobs? Six leading ideas.

The job market has shown some very welcome signs of improvement lately, but it still has a long way to go before approaching something Americans would call normal. Here’s a look at some of the proposed solutions out there.
'Zero job' economy: 11 ways Washington can fix it

A stagnant job market has ramped up the pressure on President Obama and Congress to come up with solutions. What can be done? Here are 11 proposals.
Stocks plunge: four factors behind investor pessimism

The stock market is tanking. At midday Aug. 4, the Dow had fallen 300 points. The bond market is also beginning to growl like a bear. Investors are buying long-dated bonds while eschewing shorter-term securities to protect their assets, a clear indication that they feel the economy is likely to weaken further. High-profile economists are also turning gloomy. Former Treasury Secretary Lawrence Summers put the chances of another recession at 1-in-3; Harvard economist Martin Feldstein put it at 1-in-2. What's behind all the pessimism? Here are four big factors that are weighing on stocks and could determine the course of the global economy in the coming months:

All Content

Hollande's victory: The world ponders a major shift

François Hollande's victory may represent change for not just France, but Europe as a whole.
The Circle Bastiat
No, Chinese inflation isn't a good sign

Experts say that Chinese inflation is a natural side effect of a healthy economy. Here's why they're wrong.
The Circle Bastiat
Should we change the way we teach economics?

Because of the recent financial crisis, teaching the basic principles of economics is harder than ever.
Stocks fall on gloomy Fed forecast

Federal Reserve policymakers said they were worried about a slowdown in hiring, pushing down stocks and Treasury prices. The Dow fell 64 points to close at 13199.
The Circle Bastiat
What Bernanke gets wrong about the gold standard

The redistribution created by the Fed’s monetary pumping actually weakens the economy over time as real savings is squandered on malinvestments. With gold as money, real production and savings is stimulated.  Federal Reserve chairman Ben Bernanke doesn't understand that.
Stefan Karlsson
Currency: Will Iceland go Loonie?

Iceland is considering adopting the Canadian dollar as its national currency. It's an odd choice, but it could be an improvement.
A hard landing for China? Six top economists weigh in.

China's economy grew 8.9 percent last quarter, the slowest pace in 2.5 years, and on Monday Premier Wen Jiabao cut the nation's growth target for 2012 to 7.5 percent, an eight-year low. Worries of a Chinese hard landing, defined as a sharp and sudden deceleration in growth, have gained momentum. However, China has been proactive in its efforts to prevent a hard landing. It has fine-tuned its policies to curb inflation, boost domestic consumption, and prevent a housing bubble. The Chinese government intervened heavily from 1989 to 1991 to cool its economy, causing real growth in gross domestic product to plunge to 4.1 percent in 1989, from 11.3 percent the previous year. It stepped in again in 1993. And some argue that this time around it's no different, and that the government knows exactly what it is doing. So we asked six top China analysts whether they saw a hard or soft landing scenario and what we should keep an eye on.
Obama: No 'silver bullet' for gas price pain. GOP says drill more.

Staking his ground, and perhaps his reelection, on a 'green' ideology, President Obama said in his weekly Saturday address that high gas prices confirm the need for an “all-of-the-above” energy policy. Republicans push more domestic oil production.
Stefan Karlsson
What Ron Paul gets right about economics

Ron Paul is onto something when he claims that the Federal Reserve's low interest policy has discourages savings and encouraged borrowing.
Keen on slashing the national debt? Ron Paul is your man.

Ron Paul ranks as the one candidate among four whose announced policies would leave America with a lower national debt than it would have under a status quo course, according to a new analysis.
The Circle Bastiat
Spanish real estate bust leads to ghost towns

Thousands of apartments and houses in Spanish towns go uninhabited after real estate demand evaporates.
The Circle Bastiat
Why do European central bankers sound like Austrian economists?

After attending a European Central Bank workshop on global liquidity, the author learned that European monetary economists sound surprisingly like Austrian economists. 
New window on Fed thinking: Interest rates to stay low until 2014

Delivering on a recent promise to convey its policy intentions more transparently to investors and the public, the Fed said it expected to keep short-term interest rates low into 2014.
Stocks bounce on low interest rate promises

The Dow rose 83 points to close at 12758, its highest close since May 2011, after the Federal Reserve pledged to keep interest rates near zero for almost three more years.
What can be done to create jobs? Six leading ideas.

The job market has shown some very welcome signs of improvement lately, but it still has a long way to go before approaching something Americans would call normal. Here’s a look at some of the proposed solutions out there.
European debt crisis: Germany's fight against Keynes

The European debt crisis provides Germany the opportunity to preach its disciplined approach to monetary policy. Should it succeed in remaking Europe in its monetary image, Europe will prosper. Those who follow the Anglo-American model of Keynsian loose money must fall in line.
The New Economy
Fixed mortgage rates hit new lows. Does anyone care?

Fixed mortgage rates for 30-year loan now average 4.18 percent. But record low fixed mortgage rates are not perking up the housing market or causing a surge of refinancing.  
The New Economy
Fed bashing is back in vogue

The Federal Reserve is getting a lot of healthy criticism. But the moves by politicians are worrying.
Annual PPI: Wholesale prices rose in September

Annual PPI – a gauge of wholesale prices – rises to 6.9 percent. But without energy and food, core annual PPI up only 2.5 percent.
Iranian oil sales, foreign exchange taking a hit from US, UN sanctions

Despite Tehran's insistence that increasingly strict sanctions are not harming Iran, Iranian oil sales are down and its foreign exchange access is being hampered by the US and UN sanctions.
On the Economy
Bernanke has the right ideas

The Fed chief gives a strong statement in support of activist policy firing on all fronts to address the economic crisis
Robert Reich
The Republicans' latest ploy to keep the economy lousy through election day

Republicans aim to block most or all of Obama's jobs bill, and now they're taking aim at Fed. chief Bernanke
Treasury bond market intervention: Can Fed boost economy?

Treasury bond market could be subject to Federal Reserve 'twist' – selling short-term securities to buy long-term ones. The treasury bond market move could lower mortgage rates – or stoke inflation.
'Zero job' economy: 11 ways Washington can fix it

A stagnant job market has ramped up the pressure on President Obama and Congress to come up with solutions. What can be done? Here are 11 proposals.
Paper Economy
MBA application survey: mortgage rates fall as application numbers increase

The average rate for a 30 year fixed rate morgage fell 7 points last week, while purchase application volume went up 0.9 percent