All major markets plunged on Monday, because of renewed fears of the credit crunch.The Nikkei actually rose until the tsunami went across the world and crashed on the Nikkei on Tuesday morning.Merrill Lynch just wrote off another 5 billion in mortgage related assets, which sparked fears that more are to come.Expectations within all stock [...]
Playing with Fire
One of the popular predictions of the past few years has been to declare China as the next world superpower. The most populated country in the world has experienced tremendous growth for some time, and given their size, growth, and stability, many view China as the United States’ next competitor for worldwide dominance. While I [...]
Recent USD Rally… Why?
With mixed news coming out of the world’s remaining superpower in recent weeks, the recent US dollar rally induced widespread befuddlement. With Europe suddenly looking economically worse-off than America, it is easy to understand why the USD has rallied against the EUR. However, the USD has rallied against many of the major currencies, including the [...]
Commodity Speculation
Congress is proposing legislation to restrict speculation on the oil market.Is this beneficial to the American consumer, will it decrease the price of oil?No, a recent paper written by Phil Abbott and Economics Professor from Purdue discusses in detail that speculation has not contributed to the recent surge in oil prices.The paper underlines the [...]
Got Infrastructure
The growth recession that is taking place has affected millions of Americans. It was brought about by high commodity prices and the credit crunch. Should the Government intervene? Sometimes they should, but their intervention should be prudent and they should not waste borrowed money for political gain.The fiscal stimulus that occurred seemed nice but at [...]
When is Inflation Dangerous
The goal of monetary policy is “to promote effectively the goals of maxi¬mum employment, stable prices, and moderate long-term interest rates.” Stable prices in the long run foster growth and stability, however in the short run there can be some friction between employment and price stability. The Feds reaction can become very difficult when there [...]
A Truly Global Market
Many in recent years have pointed to a “global market” that has emerged in the past few decades. While this term is typically a reference to increased global trade and international economic cooperation, the expression is also becoming applicable to the status of the world’s economy. After several years of widespread economic boon, it is [...]
Will the Dollar Rally
The Dollar rallied yesterday during Bernanke’s speech, because he acknowledged that inflation posses a long term liability to the health of the US financial system. As a trader I would be skeptical of Bernanke’s resolve to raise rates to fight inflation. The U.S. financial system is hanging on by a tread and the FOMC is [...]
The Joys of Being in a Range-Bound Market
For several months, one of the hottest debates in the currency world has been “1.50 or 1.60?” Those who follow the Euro-US Dollar currency pair have been debating its future for several months. Since around the end of February, the price has been locked within a range of 1.50 and 1.60. Only on three days [...]
Random Country Report: Part 3 – Hungary
One of the interesting aspects about today’s country in the Random Country Report is its youth; the country abandoned communism less than twenty years ago. Hungary, like many of neighbors, is a relatively young republic, and while many countries have had centuries to adapt to capitalism, Hungary has had about eighteen years to acclimate to [...]
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