Monday, July 4, 2011
Sunday, July 3, 2011
Thursday, June 30, 2011
Greece Passes Second Austerity Plan
Greece Passes Second Austerity Plan - WSJ.com
NewsOnABC: Calm has returned to the streets of Athens after the parliament approved a second austerity package to secure a payout from the European Union.
NewsOnABC: Calm has returned to the streets of Athens after the parliament approved a second austerity package to secure a payout from the European Union.
Canada's Reserve Bank Adopts Novel Approach to Housing Boom
Mark Carney, the Governor of the Canada's Reserve Bank has adopted a novel approach in dealing with his country's rising housing prices. Cognizant of the impact that a housing bubble can have on an economy, many practitioners have opted to use the traditional monetary policy instruments, effectively interest rates and quantitative easing, to curb high demand and spiraling home prices.
However, these powerful tools have side-effects and are typically non-discriminatory in application. The impact that they have are broad reaching and while a central banker may be focused on addressing a single aspect of the economy, such as rising home prices, invariably the consequence of higher interest rates extends to other areas of the economic equation, such as consumer demand, currency, manufacturing and exports.
Therefore, Canada's Mark Carney's approach to dealing with rising home prices through increased mortgage bank and home-buyer regulation, should be welcomed. While increased regulation is usually a constraint to economic growth, Carney's action should be praised for being able to focus on a concern within the economy, which has the ability to foster a level-headed approach to pricing, with laser precision.
In a country such as Israel, home prices have enjoyed run-away levels of appreciation. As its central bank has responded by increasing interest rates to constrain the demand for homes and place a cap on prices, currencies in some instances have also strengthened, placing economic growth and exports at risk.
Many argue that increasing interest rates runs contrary to the classical free market policies advocated by economist Adam Smith, and that government intervention is precisely the action that could facilitate a recession. In any event, regulation in Mark Carney's sense of application, is closer aligned to free market thinking, than that of interest rate adjustment.
U.K Public Sector Stages Walkout
YouTube - Public sector workers walk out, in summer of discontent
Tens of thousands of public sector workers, including teachers and UK Border Agency officers, are striking for 24 hours over pensions.
Tens of thousands of public sector workers, including teachers and UK Border Agency officers, are striking for 24 hours over pensions.
Wednesday, June 29, 2011
Greece: Trojans and Spartans Return to Battle
On June 22, 2011, I posted an article on "Why Greece Needs to Vote Against Austerity to Survive." In essence, I articulated a number of issues that would destroy Greece, if it chose to remain part of the Euro Zone and embrace the Euro. That message is no more clearer today, epitomized by the violent clashes that erupted on the cobble streets of Athens, in protest to the Government's austerity program. This is the same venue where Trojans and Spartans might have battled for freedom, in a era that was lost to time. Therefore, it is ironical that a similar struggle is being waged today.
This time the enemy is the European Central Bank, who chooses to impose its values and discriminating predisposed remedies, on a country and people that are gasping for survival. Its message is gift-wrapped with delicate tissue, proposing a manifesto that will provide the county with prosperity and economic recovery. The contents of the endowment is curried with a poison that tastes enchanting at first bite, but that will leave Greece with a legacy, handicapped and embattled for generations to come.
The biggest failure of the ECB has been its inability to implement fiscal and monetary policy simultaneously, from the same hand. The needs of local governments are so different to those of central government's and the discrepancies between the two, have in Greece's case, been irreconcilable. How can central government dictate to Greece a spending package that is largely a right that belongs to its citizens? How can central government deny it's members, participation in their own local affairs? How can central government actively restrain growth of a member's economy (which could potentially be activated through the development of its export industry) by forcefully compelling it to function with the Euro, as the official currency? Instead, Greece is being held to ransom, to be part of the Euro zone and retain the Euro.
In the end, both the Euro zone and Greece will suffer, as they grapple to fight the tide and reconcile a situation, the conclusion of which is inevitable.
Tuesday, June 28, 2011
Monday, June 27, 2011
Sunday, June 26, 2011
Friday, June 24, 2011
Thursday, June 23, 2011
Wednesday, June 22, 2011
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