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Inflate the Way Out

The IMF estimates the U.S. gross outstanding public debt to GDP ratio at approximately 100% for 2011. Not good, but the U.S. can point to Japan and Italy as having higher ratios. But probably not many think that Japan's dismal economic picture is one that the U.S. should try to model itself on. Italy also has more than its share of economic issues and an economic framework that not many countries aspire to.

Is default Portugal’s Manifest Destiny?

The daisy chain of events manifesting from the European fiscal crisis that initially consumed Greece then Ireland in its wake has skipped into Portugal. This is not being greeted by market participants as much of a surprise since this development had been foreshadowed for months. Portuguese bond yields had risen above 7%, roughly 4% higher than the benchmark 10-year German bund. This is the inglorious territory of Greek and Irish bond yields just as they were teetering on fiscal insolvency. ...

Misguided hysteria over rising U.S. debt

The federal fiscal policy debate is being overwhelmed by a growing sense that America must slash its deficit now, before it is too late. Actually, the United States is in no danger of a Treasury debt crisis and can carry far more debt than people believe without dire consequences.

Scheduled summits, unscheduled tantrums

The British Prime Minister had a good visit to China but received no praise for his part at the G20 Summit in Seoul, South Korea, immediately after. On his return to the Commons on 15 November 2010, Harriet Harman, standing in for Ed Miliband, hurled the jibe at Mr Cameron: "Britain needed to send a statesman to this summit but all we sent was a spectator."

Irish eyes are not smiling

"Is Standard & Poor's being overly pessimistic in its view on the Irish economy?" The Irish Times asked its readership to poll and the voting was a fairly close 53 percent "Yes" to 47 percent "No" by the afternoon of Friday 27 August 2010.

European Central Bank and EU at a crossroads?

In 1971, the Bretton Woods Gold-Dollar exchange rate system broke down, bringing in an era of floating exchange rates with all their uncertainty. Governments, especially the USA's and UK's may have been relieved of defending a particular parity by having to take deflationary action but this simply passed the burden on to trade and industry. As rates of exchange might vary at any time, both exporters and importers feared exchange rate losses, so increasing risk and uncertainty in the busi...