America: What to Do with North Korea?

North Korea’s dear leader, Kim II, died a few days ago. His 3rd son is now in charge, as Kim III, Kim Jong Un (pictured). There is no better time to talk about North Korea than now, as evidenced by some timely expert opinions. So it’s time for me to chip in my two cents. I will briefly but succinctly answer five pertinent questions as follows

Monetary Policy and the Future of China

There is a road open for China involving controlled inflation that would lead to re-balancing, both domestically and internationally, which has some uncertainties. These must be compared to those of sustaining the export-led growth model, basically an even bigger currency mismatch in the PBoC balance sheet and ever more unproductive capital investments

No Bottom in Sight for Housing

From Global Economic Intersection Guest author: Keith Jurow is the author of the MVP Housing Market Report. This article was posted at Minyanville with the title “There Is No Housing Bottom in Sight” At the end of June 2011, macromarkets.com released the results of a poll in which 108 leading economists and housing market analysts

Why Made in China Costs More in China

Chinese goods cost more in China because of currency, taxes, transportation,logistics and inflation. The Chinese get the jobs, while Americans get the consumer products; The Chinese government gets the dollar, but the U.S government gets to spend the dollar! The Chinese like to say: the Americans get a better deal!

USA Debt Crisis: Is There Any Truth?

Last week the NY Times covered the division within the economic community over the way out of the USA’s overspending / balance budgeting.

“Reasonable people can sit down and, apart from any political or policy motivations, come up with different answers,” said Robert S. Chirinko, a finance professor at the University of Illinois at Chicago who studies corporate taxation.

No doubt this is true. The economic community’s solutions range from more deficit spending stimulus (on the theory that boosting the economy will boost tax revenues to balance the budget) to out-and-out cutting spending (on the theory that re-balancing, while causing short-term pain, will spur long-term growth). Both extremes have some basis in main stream economic studies

S&P Says Greek Plan IS Default

Last week the French (banks and government) proposed a roll-over of Greek debt into new bonds, some with maturities as long as 30 years. By Thursday German lenders, insurers and government agreed to join the plan, which would cover debts falling due from now until the end of 2014. As France and Germany are by far the largest Greek creditors, the world heaved a big sigh of relief as a Greek default was going to be avoided, at least temporarily. Stock markets around the world staged huge rallies. Armageddon had been avoided again

The Shadow Banking Problem in China

In China, the persistence of inflation pressure has brought “shadow banking” into a topic of hot debate recently. According to a study issued by the People’s Bank of China in 2010, non-banking sector lending has expanded to 63.3 trillion Yuan, ($10 trillion), 44.4% of total lending activities of China’s economy

Money and Trading 101

When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account deficits, the Government needs to loosen its belt when we tighten ours. If it doesn’t, then millions of us will lose our shirts

Freedom of Speech in Pakistan and India

I feel the media in India has become quite complacent about the tawdry condition of free speech in India. All too often journalists can be warned off a seamy story by a tiny exercise of power or influence. All too often, the crooks are able to buy the loyalty of a journalist quite easily. There isn’t enough intellectualism going around, among the men and women in the media. Eshwar Sundaresan, writing in Dawn, says that India badly needs more journalists of the character of Pakistan’s Najam Sethi. This is one of many areas where India’s success in the last 20 years is leading to an erosion of the very foundations of that success.

Consumers Come to Terms with Frugality

The persistence of the decline in discretionary spending online for consumer durable goods suggests that consumers have come to terms with the need for a longer term frugality — perhaps not wishing to repeat the premature “green shoots” optimism of early 2009.

Inflation: Short- and Long-term View

The Fed justified the current round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate”. In effect, the Fed is trying to increase inflation, operating at the macro level. But what does an increase in inflation mean at the micro level — specifically to your household? How is the household affected by the short-term CPI and what does that reflect on what may lie ahead longer term?

Randall Wray and Michael Tanner on the Deficit

Michael Tanner is a Cato Institute Senior Fellow and L. Randall Wray is Professor of Economics, University of Missouri, Kansas City. The two discussed opposing views on how to deal with the U.S. federal deficit in a radio interview conducted by Ross Reynolds at KUOW, Seattle. The interview and exchanges between the two principals can be heard on the following two audio recordings. The first is just under nine minutes and the second a little over ten