Saturday, 22 July 2017

Author Archives Marius Gustavson

The Perils of Monetary Management

July 9, 2010

Recently the Chinese authorities announced an end to the dollar peg and a move towards a more flexible exchange rate, as commented upon in a previous post. However, there are fears among Chinese officials that this could lead to a wide range of problems, including speculation and hot money inflows, as well as undermining the […]

Read More

Sound Money Insights from Fed President

June 24, 2010

Kansas City Fed President Thomas Hoenig is a lone dissenter at the Federal Open Market Committee (FOMC)–the central bank’s main policymaking body. At the June FOMC meeting, for the fourth time in a row, he dissented to the Fed’s statement that economic conditions “are likely to warrant exceptionally low levels of the federal funds rate […]

Read More

Chinese Currency Reform

June 21, 2010

The Chinese government announced this weekend that they would move towards a greater degree of flexibility in the exchange rate. As stated by by the People’s Bank of China: “In view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the People’s […]

Read More

Greenspan Warns of Fiscal Profligacy

June 18, 2010

In a Wall Street Journal op-ed, former Fed Chairman Alan Greenspan warns of U.S. fiscal profligacy, in part fuelled by the current low borrowing costs of the government: “Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of […]

Read More

Greek Government Junk Bonds

June 18, 2010

The Greek crisis rolls on.  This week yields on Greek government bonds rose by almost 3/4 of a percentage point to 9.06 percent as Moody’s–a rating agency–downgraded its debt to junk bond status citing “substantial” risks in connection with the three-year Greek  program for economic reform. Furthermore, being downgraded to junk bond status also means […]

Read More

A Spanish Banking Crisis in the Making

June 17, 2010

Spain was hit hard by the financial crisis. Like the U.S. and the UK, Spain experienced high capital inflows and rapidly rising housing prices in the years leading up to the crisis. And like the U.S. and the UK it is now stuck with a struggling banking sector and bloated public finances. Spanish banks have […]

Read More