Archive for July, 2011
Lack of a Debt Deal Angers Chinese Leaders
On Thursday, Morgan Stanley’s Stephen Roach—chairman of Morgan Stanley Asia—stated that Chinese officials were “appalled” by the debt ceiling delay. According to Bloomberg, Roach stated, “coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw [for China].” Why are the Chinese [...]
How Will the Increased Distrust of the Fed Affect the US Dollar?
In recent years, certain politicians and concerned citizens have harbored a growing level of distrust for the Federal Reserve. This is nothing new in American history—there is quite a laundry list of Thomas Jefferson quotes concerning his hatred for central banks. President Jackson (ironically appearing on the $20 bill) is famed for having legally destroyed [...]
Trichet Says European Situation Not as Bad as US, Japan
On Wednesday, the President of the European Central Bank, Jean-Claude Trichet, spoke regarding the economic situation in Europe. Trichet covered a variety of topics, but the most interesting note he made may have been his comparison of the European Union’s struggles to the fiscal problems in the United States and Japan. Given the ongoing struggles [...]
Brazilian Government Intervenes to Prevent the Real from Appreciating
On Wednesday, the Brazilian real plummeted sharply, deprecating over 1%. This came a day after the real had reached its highest value against the U.S. dollar in over a decade. The move may have come as a result of the Brazilian government’s decision to impose a 1% tax on certain foreign exchange derivatives. In effect, [...]
Is China Being Greedy on Rare Earths?
On Tuesday, General Electric (NYSE: GE) released a briefing report outlining the company’s assessment of the market for rare earths—specifically how a global shortage was leading to an increase in prices. The term “rare earths” compromises a group of minerals which are integral supply inputs for many modern products in high demand. Such products include [...]
Are We Finally Witnessing the Economic Death of Paper?
The trend should surprise few—as electronic media like the internet and email expand, the need for paper would logically decline. Yet, it seems in recent months the economic effects of the shift away from paper have played out rapidly, and many may have been caught off guard. On Tuesday, the U.S. Postal Service (USPS) announced [...]
Where Does the U.S. Dollar Go Come August 3rd?
The deadline is fast approaching: Treasury Secretary Timothy Geithner has warned that on August second, barring an extension of the debt ceiling, the U.S. federal government will default. Despite warnings from a host of economic commentators, congress has failed to reach an agreement that would allow the government to pay all of its obligations after [...]
Franc Up on Euro Concerns, But Will It Hurt the Swiss in the Long-Run?
The Swiss franc appreciated significantly on Monday—at one point during the session, the currency had gained over 2% against the euro and saw an almost equivalent move against the U.S. dollar. In recent weeks, the Swiss franc may have benefited from being seen as a “safe-haven” currency among investors and traders alike. While other central [...]
If the Greek Plan Fails, the Euro May Strengthen
On Thursday last week, eurozone leaders met in Brussels to discuss a plan that would salvage the euro once and for all. After the meeting concluded later in the day, eurozone politicians emerged with a proposal: a “Marshal Plan” for Greece—invest significant money into the country to strengthen its economy. Although the full ramifications of [...]
Is Apple Mania Warranted?
Ever since consumers fell in love with the iPod, it seems as though Apple (NASDAQ: AAPL) has emerged as the most beloved company in America, possibly the world. Last week the company released impressive earnings, demonstrating the full power of the company’s ability to create electronics consumers crave. In the wake of Apple’s earnings, shares [...]
