Erik Berglof via Caixin | On December 14, the board of governors of the European Bank for Reconstruction and Development (EBRD) approved China’s application for membership. China is, of course, already a shareholder in several global and regional development institutions, but the EBRD is different in its focus on private sector development.
Benjamin Cole via Historinhas | Thanks to the extraordinary insights of blogger Kevin Erdmann, the issue of US housing costs and inflation has been brought into better focus. Erdmann recently brought up manufactured housing, or house-trailers, a wonderful topic.
UBS | A date for referendum is set and the pound is getting pounded. The United Kingdom reached an agreement with the European Union and the UK announced that the referendum vote will take place on 23 June 2016.
James Alexander via Historinhas | I was pleased to report some traction in the Market Monetarist campaign to see inflation targets substituted by, or added to, an NGDP growth target. One common pushback I’ve received recently is if the central bank can’t hit a 2% target how can it hit a tougher target? It’s a reasonable question.
Nick Ottens via Atlantic Sentinel | Political scientists Torben Iversen and David Soskice have found, to their surprise, that democracies with low inequality, like Denmark and the Netherlands, are politically more polarized than countries that are less equal, such as the United States.
Jarno Lang | For the past 12 months, headlines over refugees and capsized boats have dominated the news agenda. The first month of 2016 was the deadliest January to date, counting casualties in the Mediterranean alone. The number of displaced people—about 60 million—is now on par with that experienced during World War II.
Michele Geraci via Caixin | The Asian Infrastructure Investment Bank. The “belt and road” initiatives. The yuan entering the International Monetary Fund’s basket of reserve currencies. The Winter Olympics in Beijing. President Xi Jinping’s many trips abroad. His banquets with Queen Elizabeth and handshake with Japan’s prime minister, Shinzo Abe.
Julius Baer Research | Yields of German 2-year and 5-year government bonds are down to -0.55% and -0.36%, respectively, testament that the market is not expecting the G20 finance ministers and central bank governors to hammer out a global deal against falling interest rates.
According to Bankinter’s analysts, there will be a moderate increase in housing prices (around 3-5 % between 2016 and 2017), and it will only happen in certain places. So Spain’s property prices will not return to the pre-crisis record highs, but will reach levels similar to that in 2004.
The figures in Spain are stubborn and worrying. Public debt will exceed 100% of GDP in 2016 and the deficit is not keeping pace with commited goals. So Spain’s public finances are a potential source of future instability, which the country cannot permit given that its external debt is close to 170% of GDP.