LONDON | By Joseph Abate at Barclays | For a global 21st century economy, there is a surprising amount of US paper currency circulating. Total US currency outstanding is approximately $1.2trn, which on a per capita basis works out to $3,800.
COMMENTS ON ASIA-PACIFIC By Ray Kwong | Depending on who you talk to, China became the world’s biggest trader in goods for the first time last year, edging out the U.S. estimated 2013 total by about US$250 billion.
LONDON | By Michael Gavin at Barclays | The recent decline of headline and core inflation in the US and Europe has intensified interest in the economics of deflation, particularly the perceived danger that Europe may be headed for a deflationary episode. Deflation is particularly unsettling for many policymakers and market participants because of the theoretical risk that it may render monetary policy ineffective, creating a ‘liquidity trap’ from which it may be very difficult to escape.
NEW YORK | By Ana Fuentes | In an eagerly awaited meeting for the Spanish government, PM Mariano Rajoy made his first official visit to the White House on Monday. As expected, Barack Obama praised the progress and reforms made by the Southern European economy, although both leaders agreed unemployment rate is still posing a major challenge. Later, Mr Rajoy also met IMF’s Head Christine Lagarde. After two hard recession years, and even more painful austerity measures, Spain is looking to restore international investors’ confidence.
SAO PAULO | By Marcus Nunes | According to Alan Goolsbee, as Mr. Bernanke prepares to depart at the end of January and the Fed has initiated the exit-strategy countdown with the start of tapering, it is time to take stock of the QE Era—and time for the critics to admit they were wrong.
Op-ed by Ana Fuentes | We no longer hear about ‘Spailout’ nor ‘Grexit’, but there seems to be a euro zone’s new victim: France. A Newsweek magazine article called ‘The fall of France’ wondered about the Hexagone’s economic health and how it may be a burden for the EZ’s recovery. The problem is, some of the stated facts were wrong. French media are striking back.
MADRID | By Álex García.
SAO PAULO| By Marcus Nunes|When the Fed ‘forgets’ its function of keeping overall nominal stability you may get different instabilities. If, as in the 1960s, it becomes mostly concerned with unemployment the result will be rising inflation.
The Corner Team | The Panama Canal Authority and the building consortium Grupo Unidos por el Canal (GUPC), led by Spanish construction company Sacyr, have both agreed to put up at at least $100 million each to keep the canal work running. The big question remains who should pay for $1.6 billion in cost overruns. GUPC has asked the canal administrator for a $400 million advance. Some Spanish analysts believe they’ll reach an intermediate agreement, in which the Panamanian Government covers half of the costs (circa $800 million), although the consortium would have to sacrifice some profit margin. The Spanish government insists they will not give money “in any case”.
THE CORNER TEAM | Although fiscal austerity and structural reforms implemented have inflected some euro zone countries a severe pain, they will bring them external capital inflows, Chinese rating agency Dagong Credit predicts for 2014. This combined with the potential increase in Germany’s import demand will mean that the euro zone economies will rebound a little and see pressure of sovereign debt crisis ease further.