Last Wednesday’s British budget did very little to rectify that country’s yawning fiscal deficit, but what little it did was almost entirely at the expense of the country’s high income earners, those making over 150,000 pounds ($210,000). The fascinating question is: if British governments return to their pre-1979 high-tax ways, as seems likely, what will […]

The credit crisis took an ugly turn this week, when a number of countries banned rice exports, causing the price of the staple to soar above $1,000 per tonne, treble its level a year ago. Politically and economically, the world has moved decisively in the direction of protectionism and seems likely to continue further along […]

It is a well known mathematical axiom that stock markets and other markets are “persistent” – in other words, trends in those markets continue for longer than they would if price movements were truly random. However it has become clear in recent months that trader psychology is even more “persistent” than the markets themselves. Thus […]

Federal Reserve Chairman Ben Bernanke first achieved fame with a November 2002 speech in which he repeated Milton Friedman’s assertion that the Fed could “drop money out of helicopters” if deflation or a credit crunch occurred. The Fed and the European Central Bank now appear to be doing this, having injected $300 billion into the […]

“We’re going to become the first African tiger” said Ghana’s President John Kufuor when hearing that a British –U.S. consortium had struck oil. Is that realistic, or is Africa a permanent basket case? And if it is realistic, what would such a development mean for the rest of us?

In a week when US Gross Domestic Product was revised disown to a level slower than the growth in population while inflation continued strong, it must surely be clear that the collection of economic policies followed since 1995 by both parties and the Federal Reserve Board has failed. The Fed can neither cut rates nor […]

China’s first quarter growth report of 11.5% and the market reaction thereto illustrated one market-forced dilemma faced by the world’s policymakers: in the long run, they can have cheap money or cheap commodities, but not both.

It’s an interesting term – risk management. It sounds so organized and reassuring. A risk that is managed is tamed, brought within well understood parameters and reduced to a level that shareholders can tolerate. Investment bankers and their tame economists constantly tell us that the derivatives market has reduced risk in the financial system and […]

The collapse of the Doha round of trade talks in July raised fears that the world might be about to descend into 1930s style autarky, with a huge negative effect on prosperity. Unless things get very much worse, that’s unlikely in trade as a whole, if only because the historical memory of the 1930s remains […]