Posted by Pat Sullivan
on March 22, 2011
Asia,
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GDP,
General Comments,
Greece,
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These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:
Crises in the Middle East and Japan threaten to thrust the U.S. and global economies into a second recession.
Since the economic recovery began in July 2009, GDP growth has averaged only 2.8%, a pace insufficient to bring unemployment down to acceptable levels. And that rate of growth leaves the economy too vulnerable to the slightest hiccup and a deceleration into recession.
Prior to the turmoil in the Middle East, economists were forecasting 3.5% growth for 2011, but the surge in oil prices and gasoline will likely shave half a point–perhaps more–from that rosy outlook.
Should oil surge to $140 a barrel, gasoline prices would pierce $4.00 a gallon and U.S. growth could slow to a mere 2.5%. That would be barely self-sustaining and not enough to create many jobs–likely many fewer than the 1.5 million needed each year just to keep up with population and labor-force growth.
Continue reading…
By Michael Casey
A DOW JONES NEWSWIRES COLUMN
NEW YORK (Dow Jones)–With the global economy caught in a giant debt trap, some pundits are thinking about a radical new world financial order.
The way things are headed, some say, the International Monetary Fund could evolve into a de facto global central bank, armed with its own currency for doling out loans to advanced and emerging economies alike. It’s a politically unrealistic idea over the medium term, but the force of history behind a shifting world power balance could eventually overwhelm such obstacles.
The Catch-22 for the advanced economies of Europe, the U.S. and Japan is that to bring down their excessive future liabilities and placate nervous bond markets, they must slash spending even though this would undermine the global recovery and possibly worsen their debt ratios. Having borrowed to bail out indebted businesses and consumers, governments have reached the end of the line.
There is no one to help them out–not with the IMF organized as it is.
For now, advanced countries don’t need outside help. Despite the massive debt outstanding, markets continue to finance the governments of the U.S., Japan, Germany and the U.K at super low rates. Continue reading…
Tags: Banking, Dow Jones Newswires Column
Posted by Pat Sullivan
on May 31, 2010
Australia /
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CANBERRA (Dow Jones)–Australia’s Finance Minister Lindsay Tanner on Monday continued to reject miners’ claims that a planned new 40% tax on mining industry profits above a certain profit threshold increases the sovereign risk to investment in this country.
“Perhaps the most absurd claims with respect to the impact of the government’s tax package relate to claims about its impact on Australia’s international reputation,” Tanner told lawmakers.
“What we are seeing is the mining sector seeking to redefine the concept of sovereign risk to something very different from the way it is generally understood. Typically, it is understood to relate to issues of conflict, corruption, expropriation but now sections of the mining sector want us to believe that sovereign risk basically arises whenever there are tax changes (the industry) doesn’t like,” he said.
-By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; rachel.pannett@dowjones.com
Tags: Australia
