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The finance millstone
Four simple reforms would help return the finance sector to its true purpose - providing financing for the real economy to produce the goods and services that consumers and businesses demand. One hindrance - the finance industry today owns the politicians. - Hossein Askari (Apr 17, '14)

The promise of deflation
The noise from high places, including the US Federal Reserve and the IMF's Christine Lagarde, is warning of the imminence of deflation and the dire consequences that would ensue from even a mild decline in prices. I frankly don't believe a word of it. - Martin Hutchinson (Apr 17, '14)

In Andrew Jackson we trust
It's time to give the seventh president of the US his due for abolishing central banking in 1836. Andrew Jackson's foresight and integrity began a golden era for Americans. Unfortunately, President Barack Obama is no Jackson.
- Noureddine Krichene (Apr 11, '14)

Ultimate foolishness
Unless someone knows of a worse financial instrument, credit default swap options are the most leveraged and the most inaccurately rated by risk management of all products out. Regulators should take notice, but I'll bet they don't. - Martin Hutchinson (Apr 8, '14)

Blame the Fed for high food prices
Rising grocery bills around the world have little to do with drought. In fact, we've seen plenty of rain since 2008, in the shower of dollars from the US Federal Reserve into the global economy. This, along with ultra-low rates and President Obama's profligate spending, has caused massive inflation, higher food prices and declining standards of living. - Noureddine Krichene (Apr 2, '14)

'Bail-in' deal raises risk to bank deposits
European Union officials recently reached at agreement to create a single agency to handle failing banks. On the surface a positive, the authorization of both bailouts and "bail-ins" means depositors face a heightened threat that their funds will be confiscated. - Ellen Brown (Apr 1, '14)

The really rich do spend
Thomas Piketty's work has received rave reviews among those seeking to resuscitate the Marxism they enjoyed in college. His central thesis that capital accumulates until its owners control everything suffers from a core fallacy: the tendency of capital owners to spend their returns. - Martin Hutchinson (Apr 1, '14)

Staring past Central Asia's strongmen
Protests that erupted in Kazakhstan following a devaluation of the tenge underlined that Central Asia's regimes are vulnerable to economic shocks. Western schemes for "rapid liberalization" are failing to generate growth, and East Asia industrial and anti-corruption experiences offer a more viable model. - Julika Peschau (Mar 26, '14)

London loses top spot
New York has supplanted London as the world's premier financial center. The difference at present is still small, but the change has been a long time coming - nearly three decades - and will not be reversed. - Martin Hutchinson (Mar 25, '14)

Bali tips balance for WTO Doha agenda
Last year was a good one for the World Trade Organization, with overall trade growth recovering somewhat and 2013 culminating in the momentous Bali Package. And although there was a worrying rise in protectionism last year, 2014 still represents a chance to put the rest of the Doha agenda back on track. - Roberto Azevedo (Mar 21, '14)

Light work and idle hands
Politicians have no courage to address the root of sky-high unemployment such as the 27% rate seen in Spain last year because it is the symptom of diseased labor markets they won't confront. They print money instead - which helps the rich get richer, not getting idle hands to work. - Noureddine Krichene (Mar 20, '14)

Abenomics hits the rails
The results of Japanese Prime Minister Shinzo Abe's bold policy experiment, starting to come in now, won't be pretty: deep global recession in the next two years looks a likely outcome. However, Japan and Abe could still learn from the train-wreck of postwar Britain. - Martin Hutchinson (Mar 18, '14)

Usury in the USA
Under Ben Bernanke and Janet Yellen, US Federal Reserve policies have seen a return of usury laws under the guise of ultra-low interest rates. This represents a massive confiscation from the private sector of money that could have been used to restore full employment and growth. - Noureddine Krichene (Mar 14, '14)

By the way, your
home is on fire

Given a choice between their bottom lines and the fate of the Earth, US corporations have chosen to deny increasingly clear scientific evidence of climate change. As energy firms launch multi-pronged efforts to prevent fossil fuel divestment, the planet is nearing the upper temperature limit of an inhabitable planet. Executives may have enough money to burn, but soon their world will catch light too.
- Rebecca Solnit (Mar 14, '14)

The flick of the tail
Tail risks, events with a less than 1% probability of occurring , are the ones to watch these days. Investors, bankers and managers can ignore at their peril that it took just six weeks for the dormant threat of global war - while still modest - to evolve into a cause for real concern. - Martin Hutchinson (Mar 11, '14)

Lives at stake in TPP trade deal
The Trans Pacific Partnership agreement threatens to cut off the potential supply of generic medicines that can save lives as countries negotiating the deal are being asked to accept intellectual property rights that go well beyond normal standards. That makes the trade talks a matter of life and death. - Martin Khor (Mar 10, '14)

Will emerging markets stage a comeback?
The recent emerging markets rout left a lot of people confused about the direction in which developing countries are going, but it turns out that we should not have found recent events at all surprising. They are part of the globalization cycle. (Mar 5, '14)

Bitcoin and Bakunin
Libertarians see cryptocurrencies such as Bitcoin as a vital weapon in the struggle against Big Government. In reality, Bitcoin represents the world of Mikhail Bakunin more than that of Adam Smith. Libetarians should embrace gold, not cyberspace. - Martin Hutchinson (Mar 5, '14)

IMF urged to ease subsidies demands
The International Monetary Fund is being urged to ease pressure on five Arab countries' governments to reduce food and fuel subsidies until stronger social-protection schemes and other basic reforms are implemented. - Jim Lobe (Mar 3, '14)

G-20 urges US to approve IMF reforms
The Group of 20 industrialized and emerging economies, frustrated at the United States' failure to approve reforms that would see governance at the International Monetary Fund shift towards developing countries, have called for action by April. - Carey L Biron (Feb 26, '14)

The rise of Obama's communism
President Barack Obama's track record is even far more chaotic then his predecessor's, and his legacy - not least the mountain of debt that has built up during his period in office and its consequences - could turn out far more disastrous than that of George W Bush. - Noureddine Krichene (Feb 25, '14)

'Downton' was better
Larry Summers deplores the recent progression by the US toward a "Downton Abbey economy" of extreme inequality. Yet in certain respects - behavioral and otherwise - the "Downton Abbey economy" of 1920 was greatly preferable to the one we are experiencing today. - Martin Hutchinson (Feb 25, '14)

Evading the welfare trap
The loss of 2.5 million people from the US workforce may not all be down to the impact of Obamacare. Whatever the various causes for such a loss, the country is far worse off for their absence from the jobs market. - Martin Hutchinson (Feb 19, '14)

Define irony ...
Equity investors cheering every intervention by central banks seem unaware that while these keep asset prices artificially high, they fail to provide tangible benefits in employment generation or wage increases. Public outbursts from Singapore to the Arab world suggest anger over high asset prices won't just simmer forever. (Feb 14, '14)

Why Bitcoin lacks currency to be 'money'
Bitcoin cannot become "money" - something even cigarettes can achieve - even assuming the technology geeks succeed in locking their software vaults against mischief-making hackers. It may, however, speed up the search for solutions to the present utter mismanagement of monetary and fiscal and regulatory affairs. - Reuven Brenner (Feb 14, '14)

Is rationality returning?
Last year's 30% surge in stock values and decline in precious-metals prices amid an orgy of money printing by the world's central banks are fast being reversed. Is it - can it be - the return of some sort of economic rationality? - Martin Hutchinson (Feb 11, '14)

When robots take over
What happens when the robots take over? The economic disruption will be considerable, but robots will likely be a boon to the economy by pushing technological frontiers and facilitating entrepreneurship.
- Martin Hutchinson (Feb 6, '14)

Pacific nations need help away from aid
Long-term dependence on aid in Pacific Island nations, some of whom rely on foreign funding for more than half their government development budgets, continues to cause concern. Pacific experts are calling for greater political will for locally driven self-sustaining economic growth. - Catherine Wilson (Jan 29, '14)

Pete Seeger: 1919-2014
Pete Seeger, who has died at the age of 94, lifted the hearts of millions throughout his eight-decade long career with songs of freedom and hope, while inspiring generations of musicians, including the '60s protest-song movement. Here, thanks to YouTube, we can be mesmerized by an almost still young Seeger, with two quiet Americans, joining famed Vietnamese musician Pham Duy Trong, who himself passed away early last year, aged 93. (Jan 29, '14)

The deflation 'ogre'
Central bank inflationists are still not satisfied with stocks rising at 30% a year, defying the reality faced by ordinary workers who have to contend with rising prices of everyday essentials. Such officials are scared by the deflation "ogre", and their miserable track record since 2002 cannot dissuade them from their destructive policies. - Noureddine Krichene (Jan 29, '14)

Dinosaur tail risks
The World Economic Forum's "Global Risks 2014" annual report supposedly outlines the hazards that could cause real trouble in the next decade. A lot of it was fashionable pap, but there do appear to be more "tail risks" than 50 years ago. - Martin Hutchinso (Jan 28, '14)

Don't cry for ME-Argentina
East Asia is faring better than the rest of the world in the great economic transformation because its culture imposes merciless meritocracy, and other so-called emerging markets are in trouble because they are teeming with people who have nothing remunerative to do. The Chinese by and large have better things to do than riot, whereas for pointers of wider dysfunction to come, look to the Middle East and Argentina. (Jan 27, '14)

Rouhani and the 1914 remix
Iranian President Hassan Rouhani emerges as a Davos darling by wooing the in-crowd with an "open for business" sign. But the Masters of the Universe were less enamored by what he had to say on geopolitics, since rather than face the real sources of "rising tensions", they prefer an old centennial world war view: that 2014 is 1914 all over again. - Pepe Escobar (Jan 24, '14)

Cowbells, or how Davos saves the world
Masters of the Universe wanting to play saviors of the world are flocking to tell it on the mountain this week. Their interminable business meeting amid the Swiss cowbells at the World Economic Forum is producing nothing but jingle-jangle, Russia-bashing, and an opportunity for Japan to blow its own horn. - Pepe Escobar (Jan 23, '13)

The coming deficit spiral
Policymakers and investors appear sanguine so far this year, apparently failing to realize that new boosts to economies through infrastructure spending fail to recognize the impact on declining budget deficits when interest rates revert to a more normal level. - Martin Hutchinson (Jan 22, '13)

Is Graham & Dodd obsolete?
Followers of Benjamin Graham and David Dodd will, like Warren Buffett, likely have underperformed the market last year. That might indicate that the pioneering work of the two famed analysts is past its sell-by date. Or that disaster is just around the corner.
- Martin Hutchinson (Jan 14, '13)

US inequality is curable
The argument that raising minimum wages by statute increases outsourcing and local unemployment ignores the importance of the service industry. Starbucks has customers in New York; it cannot serve them by relocating its stores to Shanghai. - Martin Hutchinson (Jan 7, '14)

Bernanke's era of anarchy to go on
Outgoing Federal Reserve chairman Ben Bernanke leaves behind the desolation caused by his erroneous belief that out-of-thin-air money creation and ultra-low interest rates create wealth and employment. It is just piracy on a grand scale, yet Janet Yellen looks set to continue his folly. - Noureddine Krichene (Jan 7, '13)

World Bank raises record
amount for poorer countries

The World Bank has raised a record US$52 billion for development in the poorest countries, prompting a welcome for the amount along with concern at the extent to which loans make up the total and how it will be spent. - Carey L Biron (Dec 19, '13)

The currency of power
Thomas Drake, formerly with the US National Security Agency and himself a noted whistleblower, discusses the Edward Snowden affair, the financial dimension of the activities of the NSA, the technical abilities at the disposal of intelligence agencies, the costs and benefits to corporations of NSA activities - and the F-word: Fascism.
- Lars Schall (Dec 23, '13)

Asymmetries mark WTO's Bali Accord
As industrialized nations celebrate the World Trade Organizationís Bali Accord, other countries are forced to carry their battle to another day after securing what several trade ministers have characterized as only half-baked results and grandiose promises. - Ravi Kanth Devarakonda (Dec 17, '13)

Mississippi Bitcoin
The Bitcoin artificial currency merits comparison with the John Law's French Mississippi Scheme - which soon collapsed despite efforts to save its currency by burning it in public - or with the present-day US dollar, which is likely to suffer a similar fate. - Martin Hutchinson (Dec 17, '13)

Obama digging in the communist graveyard
President Barack Obama has stated that his highest priority is closing the income gap in the United States, yet he continues to pursue failed communist-style policies even though five years into his presidency, living standards are far worse than in 2008. - Noureddine Krichene (Dec 12, '13)

US 'bullying' TPP negotiators to get deal
A picture of disunity is emerging from negotiations on the US-led Trans-Pacific Partnership trade agreement, with all 11 other countries involved, except Japan, fighting hard to fend off US demands in key areas, in particular the use of tribunals that bypass normal contract-dispute procedures. - Carey L Biron (Dec 11, '13)

Finance sector fading
The financial sector not only survived the crash of 2008, it profited hugely from the subsequent rebound. But its glory days are over, and the global economy will be better off as a result. - Martin Hutchinson (Dec 10, '13)

Century of Fed failure
If your plumber fails to fix a broken pipe, he is quickly dismissed and a better worker found. Yet for a century, the US Federal Reserve has failed to deliver on its goals, instead repeatedly dragging down the economy and driving up unemployment. It is time it was sacked. - Noureddine Krichene (Dec 6, '13)

Future demands new-style growth
Americans beware: the global economy is heading East and South, with China leading the way in showing how to improve social conditions along with production. That future means growth with distribution, not stagnation with inequality. - Johan Galtung (Dec 5, '13)

WTO urged to tread carefully on water
As what could be final negotiations towards a global trade agreement under the World Trade Organization get underway in Indonesia, negotiators are being urged to specify that water resources cannot be treated as commodities. Big business has other views on the matter. - Carey L Biron (Dec 4, '13)

Obamacare and Stalinism
The malfunctioning and much-derided website central to Americans' move to Obamacare health treatment will eventually do its job, but the gains will all go to government, with patients and insurers the losers. - Peter Morici (Dec 4, '13)

Theorists lose the plot
Unexpected results during the climb out of the 2008 downturn call into question economic theories of all colors. Government malinvestment is one cause of present sluggishness, and may yet have even more dire consequences.
- Martin Hutchinson (Dec 3, '13)

The TPP and ill health
Global food control has nearly been achieved by large bio-tech corporations and the reduction in plant diversity through genetically modified seeds and related chemicals - spread at grave and growing cost to our health. The Trans-Pacific Partnership will only add to that burden. - Ellen Brown (Nov 27, '13)

A rational corporate tax
The unduly burdensome and overly complex US corporate tax system needs reform, and a simple solution, free of politicized deal-mongering and lobbyists, is available. Unfortunately, its chances in the present political climate are slim. - Martin Hutchinson (Nov 26, '13)

Nicaragua canal boosts China power
Nicaragua and China have come to an agreement allowing the construction of a new inter-oceanic canal in Nicaragua. This will usher China into the region as a major political force, while the route will bypass both the congested Panama Canal and the strong US military presence patrolling the area. - Arnie Saiki (Nov 22, '13)

Climate change talks hit by walkout protest
The prospects for an agreement on measures to mitigate climate change have taken yet another beating, with the representative for 133 "developing" countries walking out of negotiations in Warsaw over "developed" country opposition to committing to paying for "loss and damage". - Claudia Ciobanu (Nov 21, '13)

China, US can drive clean-tech revolution
China and the United States should be doing more together to drive the innovation and commercialization of technologies that keep the planet livable and facilitate the growth needed to meet human needs. This would be one of the boldest ways our countries could bet on each other's success. - David Dreier and Bill Mundell. (Nov 20, '13)

World War I once more?
The world now is better protected against the outbreak of global war than it was in 1914, but not by much. The combination of another recession, weak (or just mad) leadership and bad luck could easily lead over that precipice once again - with even more devastating effect.- Martin Hutchinson (Nov 19, '13)

Centrist sinkholes
One hundred years after the start of World War I, developed countries' voters seem to be shifting towards eccentric and possibly dangerous choices. The failed revolutions in the Middle East and stalled peace processes in Iran and Pakistan suggest that chaos will be the reigning theme of the second half of this century. (Nov 15, '13)

Bernanke's demagogy
Only a government can destroy an economy. Only unrestrained demagogues in charge of key policy making can spread agony and misery. Outgoing Federal Reserve chairman Ben Bernanke has much to answer for. There is no prospect of ever reversing his policies in an orderly manner. - Noureddine Krichene (Nov 14, '13)

Which bubbles are worst?
The universe of assets whose price will collapse in the next downturn is considerably better populated than the collection of assets whose price won't collapse. It is only a question of time; this time next year is plausible. - Martin Hutchinson (Nov 12, '13)

An appeal for a new view from Europe
While Europe is still industrially strong if united, divided it will stop being a globally relevant political entity. Bogged down in petty disputes, the continent needs to regain its place in the international stage where China and India stand tall. The nurturing of shared culture values and a new "European School" education system are starting points. - Paolo Savona and Francesco Sisci (Nov 8, '13)

Debt and deficit as shock therapy
Using the 2008 financial crash and its fallout, the financial oligarchy and government proxies have imposed austerity on the public. Yet, there is no shortage of financial resources, their apparent lack due to them being concentrated largely in the financial oligarchy's coffers. - Ismael Hossein-zadeh (Nov 6, '13)

Economic complexity pays
That societies succeed, not because of their natural resources but because of their knowledge and the economic complexity to which it leads may be an oversimplification, but it does have interesting implications. - Martin Hutchinson (Nov 5, '13)

QE: Part 2
Negative interest
The consequence of a negative interest rate regime pursued by central banks is to shift the pain of deflation from banks to depositors, from debtors to creditors, and from borrowers to lenders. Negative interest rates are the ultimate market distortions in an already madly distorted market. - Henry C K Liu (Nov 4, '13)
Part 1: Misdirected QE is mere sleight of hand

Financial stability
An energetic exchange at the spring meetings of the International Monetary Fund and the World Bank Group focused on whether the US Federal Reserve should withdraw its "punchbowl". At issue was the importance - or otherwise - of "financial stability".
Doug Noland looks at the previous week's events each Monday.


Microsoft in Hon Hai tie-up
In an effort to bolster revenue from its vast array of patents, Microsoft has signed a deal with Hon Hai, parent company of electronics maker Foxconn, allowing the Taiwanese company to legally produce devices for Android and Chrome OS using patents owned by Microsoft. (Apr 19, '13)
Martin J Young surveys the week's developments in computing, gaming and gizmos.

ATol Specials

A proposal
Henry C K Liu

The Coming Trade War

By Henry C K Liu

Money, Power and
Modern Art

A series by Henry C K Liu

Henry C K Liu critiques the role of the world's central banks

Andre Gunder Frank on Uncle Sam and his shrinking dollar


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