Vladimir Putin’s regime in Russia is corrupt and despotic. Mexico is a functioning democracy with an open economy and a well run recent election. They are roughly equally wealthy, both with large oil reserves. Yet it is Russia, not Mexico, whose economic potential inspires more confidence.

As interest rates rise, the stress increases on emerging markets, with tighter money producing higher risk premiums and decreased funds availability. At some point, one or other of the major Third World borrowers will spin into financial crisis, producing a “domino” effect on other indebted countries. In 1982, the first “domino” was Mexico; this time […]

The current market consensus has the world economy continuing to grow, with modest inflation brought under control by a modest further increase in interest rates, and the worst case scenario being a mild downturn like those of 1990-91 (outside Britain, where it was severe) and 2001-02. Anything worse is thought to be unlikely; central banks […]

Prognosticating for China is extraordinarily difficult; optimists and pessimists see an entirely different future for the country. China has neither political freedom nor a true market economy, and its economic statistics are as unreliable as those of the old Soviet bloc. Thus conventional economics is useless. Economic forces with the inevitability of gravity in a […]

Stock markets around the world were spooked last week by an apparent resurgence in inflation and central banks’ worldwide attempts to combat it. To a bearish observer, the current market jitters raise a quite different question: why, in the face of low interest rates and rapid money creation over an entire decade since 1995, didn’t […]

In a week when President George W. Bush has appointed Goldman Sachs chairman Hank Paulson as Secretary of the Treasury, to the cheers of commentators, it’s worth looking at the economic views a successful investment banker might be expected to have, and how those views have typically changed over the decades.

The consolidation of the world’s stock exchanges appears to be taking shape, with the New York Stock Exchange bidding for the Paris-based Euronext and NASDAQ now owning a blocking 25 percent of the London Stock Exchange. Stock Exchange mergers and increasing technological sophistication are universally assumed to be a good thing; the next downturn is […]

The Wall Street Journal has consistently supported policies of cheap money and rapid legal and illegal immigration over the past few years. Last week its editorial line wavered, with a lengthy nuanced piece on immigration by James Q. Wilson and Peter Skerry Thursday and a lead editorial worrying about inflation Friday. Is this just a […]

President Evo Morales of Bolivia’s announcement May 1 that the country’s oil and natural gas resources would be nationalized, and Thursday he announced that this would be without compensation. By doing so, he exemplified both the Latin American disease, discussed here April 24, and an even more severe natural resource disease by which countries with […]

Gold closed at $686.50 per ounce, silver at $13.89 per ounce, copper at $3.4935 per pound and oil at $70.19 per barrel Friday, all of them far above those commodities’ price levels of January 1. Just how high can commodity prices soar, and what effect will it have?