Hedging the dollar with foreign-currency C.D.’s
Your choices include single-currency C.D.’s — euros, Canadian dollars, British pounds, even Brazilian reais or Indian rupees — or multicurrency C.D.’s bundling predetermined baskets of denominations. For instance, the Viking Index C.D. is made up of Norwegian, Danish and Swedish currency. Other financial institutions offer ways to, in essence, bet [...]

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For months, economists have debated whether the United States is headed toward a recession. Today, there is no doubt. President George W. Bush can tout his $150 billion economic stimulus package, and the Federal Reserve can continue to cut shortterm interest rates in an effort to goose consumer spending. But those moves are unlikely to [...]

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The value of the Chinese yuan, or RMB, has been a sore spot in U.S.-China relations in recent years. Faced with a massive $256.3 billion trade deficit with China for 2007 that has increased over three times since 2000 ($83.8 billion) and continues to increase annually, Washington has called on Beijing to revalue its currency [...]

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A different kind of strike may be on the way. It’s already been tested against North Korea and Burma, and it worked. Now the US may be getting ready to drop its financial atom bomb on the much bigger target of Iran.
The warning came last week in an advisory notice posted by the US Treasury’s [...]

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Is the global financial system headed for a meltdown? From Nobel Prize-winning economists to captains of industry, the world’s top experts are united by a common answer: We don’t know.
Are the current economic problems a crisis of epic proportions that will change the world forever or just a painful but typical downturn in the business [...]

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At the start of a year likely to be dominated by an extraordinary degree of uncertainty, it is worth setting out what some of the world’s top political and business leaders could reasonably predict for 2008, as they gather today in the Swiss resort of Davos.
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Rio Tinto, if it ends up in the hands of the Chinese government, would only be the tip of the iceberg. After years of a profitable trade imbalance with Western nations, principally the United States, Beijing has the financial wherewithal to put itself into a position from which it can command the economy of America [...]

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As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control
Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central [...]

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The lackluster investment strategy of China Investment exposes a central flaw in the Chinese economy, its lack of a rational system of capital allocation. For more than a decade, Chinese state-owned companies have made losses and have been propped up by the banking system. Since 2004, loss-making state-owned companies have been joined by overbuilding municipalities, [...]

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THE weather may be cold and wet, but in the rich world’s financial markets it is beginning to feel like August all over again. Credit spreads have widened and shares are pitching from gloom to elation as investors look to the Federal Reserve for solace. The anxiety is unmistakable. But this time the scare is [...]

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The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar — a problem the United States should take very seriously. By Gabor [...]

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Financial markets are jumpy. With good reason
HALLOWEEN arrived early for investors this year. Gone is the euphoria of late September and early October, when stockmarkets surged to new records, shrugging off the credit crunch and the spectre of a slowing American economy. Today’s mood is jittery, with investors easily spooked by credit-market phantoms and the [...]

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Russia is not only engaged in a military buildup. Russia wants to use its economic muscles. You might ask what economic muscles Russia could have? It is bankrupt, backward, hobbled, demoralized and generally dismissed as an effective economic actor. We must remember, however, that positions in the world economy can change, that tables can be [...]

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America should not live in fear. As Peter Morici, economics professor at the University of Maryland”s Robert H. Smith School of Business, has argued, “If the Peoples Bank of China were to sell enough Treasury securities to disrupt financial markets and cast the U.S. economy into recession, where would China’s factories sell all their stuff? [...]

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The rise of Russia, China and the Islamist states, along with their control of energy resources and the growth of Sovereign Wealth Funds, leaves future dominance by a liberal democracy such as America, in grave doubt. FSM Contributing Editor David Jonsson explains why.
Liberal democracy, led by the United States may have emerged triumphant from [...]

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Ambrose Evans-Prichard’s recent piece, China threatens ‘nuclear option’ of dollar sales, sounded a further alarm. The foolishness of trading with Communist China now comes into sharp focus. The same can be said for free trade with all those countries that are not truly free. According [...]

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Trade: China’s threatening to use the “nuclear option” against the U.S. Another bomb threat? Nope. China says it may dump some of its $900-billion-plus in U.S. investments on the market, creating financial chaos.
Should we be worried? Not really. It’s more hot air and anger over talk of U.S. trade protectionism than it is an actual [...]

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In his famous collection of essays Capitalism and Freedom, Milton Friedman made an argument that has been paraphrased endlessly by those who dismiss the notion that trade deficits are a problem. Postulating a greatly undervalued yen (1,000 to the dollar), the Nobel economist stated that at such an, “exchange rate the Japanese could sell [...]

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And so, the dollar is on top. Every other currency is below. The dollar’s dominant position is obviously unfair, if one assumes that all currencies should be “created equal” and endowed with certain “rights.” Of course, such assumptions are ridiculous. Currencies are not created equal. Countries are [...]

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Economics prides itself on being the most scientific of the social sciences. Yet the X and Y axes can’t always capture globalization’s unpredictable turns. In this week’s List, FP looks at five ways in which the world economy is pushing economists to think outside the box.
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Definitions:
Macroeconomics - Things that economists are generally wrong [...]

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For many months, officials from the U.S. Treasury Department have been quietly traversing the globe in an attempt to convince managers of foreign banks to sever ties with Iran. More than 40 major financial institutions have agreed, dealing a serious blow to Iran’s ability to finance trade deals and oil projects.
Now, the two largest European [...]

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