Archive

Archive for the ‘economics’ Category

Beijing warned on dollar holdings

June 7, 2011 Comments off

ft.com

U.S. dollar notes are seen in this picture illustration taken at the Bank of Taiwan in Taipei November 11, 2010. REUTERS/Nicky Loh

China is running a major risk in holding so many dollars because the US may deliberately devalue its currency, a senior Chinese official has warned.

The comments by Guan Tao, head of the international payments department in the State Administration of Foreign Exchange, knocked the dollar on Tuesday, adding to fears about the struggling US economy. The dollar fell to a one-month low against a basket of six leading currencies.

Pressure on the dollar has intensified amid heightened concerns that the soft patch in the US economy will ensure that the Federal Reserve sticks to its ultra-loose monetary policy in the near future.

Despite Mr Guan’s concerns, which are often voiced in Beijing, analysts said that China had little choice but to recycle its vast foreign currency reserves into dollar-denominated assets. “The United States has adopted expansionary fiscal and monetary policy to stimulate economic growth,” Mr Guan said in an article that was published on the website of China Finance 40 Forum, a Beijing economic think tank.

“The United States may find it hard to Read more…

HOW BANKS AND INVESTORS ARE STARVING THE THIRD WORLD

February 5, 2011 Comments off

Ellen Brown

“What for a poor man is a crust, for a rich man is a securitized asset class.”
–Futures trader Ann Berg, quoted in the UK Guardian

Underlying the sudden, volatile uprising in Egypt and Tunisia is a growing global crisis sparked by soaring food prices and unemployment. The Associated Press reports that roughly 40 percent of Egyptians struggle along at the World Bank-set poverty level of under $2 per day. Analysts estimate that food price inflation in Egypt is currently at an unsustainable 17 percent yearly. In poorer countries, as much as 60 to 80 percent of people’s incomes go for food, compared to just 10 to 20 percent in industrial countries. An increase of a dollar or so in the cost of a gallon of milk or a loaf of bread for Americans can mean starvation for people in Egypt and other poor countries.

Follow the Money

The cause of the recent jump in global food prices remains a matter of debate. Some analysts blame the Federal Reserve’s “quantitative easing” program (increasing the money supply with credit created with accounting entries), which they warn is sparking hyperinflation. Too much money chasing too few goods is the classic explanation for Read more…