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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:

Prime Minister George Papandreou is correct to put the EU bailout package to a vote. Without public consent to the tough austerity imposed by the EU aid package, those measures will not be sustained–a future government can balk at its conditions and start spending again.

For their part, the EU, the IMF and leaders in Germany and other wealthy countries are falsely convinced no good solution for the Greek mess exists other than the package now offered Athens. Continue reading…

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:

Gold is selling for close to $1,500 an ounce, up from $258 in 2001.

Jewelry and industrial applications absorb at least 80% of new supply. The economic expansion of the 2000s and the recent recovery have boosted commercial demand, but this alone cannot explain the persistent surge in gold prices.

The cost of bringing new deposits on line has been less than the market price of recent years–investors see in gold what they cannot find in interest-bearing securities.

Exchange traded funds (ETFs) have made storing wealth in gold or simply speculating easier. These store bullion for investors who have lost confidence in the dollar, euro and yen, and may be a precursor of a new gold standard.

In 1944, the International Monetary Fund established a system of fixed currency exchange rates. The dollar was fixed to gold and other currencies fixed to the dollar. This system failed because rising production costs pushed the industrial price of gold above its monetary value, and fixed exchange rates among currencies proved unsustainable.

Continue reading…

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…

By Kejal Vyas

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–The government of Bangladesh aims to boost foreign direct investment into the country to $7 billion by 2015, Prime Minister Sheikh Hasina said Thursday.

The country has also set aside $350 million for three public-private partnership programs in an effort to draw foreign money, Hasina said at an address in front of a small group of investors in New York.

It’s an ambitious target for a country which is one of the world’s poorest and whose name often invokes images of severe natural disasters, military coups and political corruption.

Continue reading…