By Ray Kwong | China’s economy went from chump to champ in 30 years, with growth rates averaging 10% over three decades. To be sure, there are major downward shifts underway, but predictions that the Chinese economy will go down in flames—whether by crash, hard landing or [your favorite term here]—is crazy. Some detractors even foresee an economic apocalypse, one in which China will repeat Japan’s “lost decade” of stagnation.
SAO PAULO | By Marcus Nunes | The author believes that two ‘obsessions’ are at the root of the loss in nominal stability that took place in the Bernanke Fed: the ‘obsession’ with inflation and its counterpart, the ‘obsession’ with interest rates.
MADRID | By Luis Arroyo | Those who have already celebrated the euro comeback might be deluding themselves: investor confidence has changed gear because European peripheral risk at this point looks safer than some emerging economies’.
MADRID | By Luis Arroyo | An economic recovery green shoot will still need some help to survive, but the ECB remains too biased towards inflation contention.
WASHINGTON | By Pablo Pardo | Maybe this time Bernanke is just trying to provoke a mini-crash to lay the foundations for a progressive withdrawal of the monetary stimulus in 2014 or, maybe, 2015.
What is China’s credit real situation? Amid international markets’ woes, our experts put data into perspective. For Antonio Sánchez-Gijón, overall indebtedness of the Chinese economy begins to be seen as excessive and difficult to control. However, Ray Kwong believes liquidity shortages are normal in China, especially when banks are moving assets around to meet capital requirements before the end of a quarter, like around now.
MADRID | By Miguel Ángel Rodríguez, analyst at XTB | valenciaplaza.com | Has the Japanese experiment failed? Under the stress of some political pressures, Japan may have rushed into an expansion of its monetary base without all the due protections.
WASHINGTON | By Pablo Pardo. In July the American GDP will go up, although the economy won’t even feel it. Nor the so-called sequester or the Fed massive debt purchases have anything to do with it. Oil prices and the dollar are also out of the equation. The key: R&D will be considered as an investment.
MADRID | By JP Marín Arrese | The ECB has made crystal clear it has no intention to undertake any extra effort in helping the economy to overcome its current recession. Its message utterly fails to provide confidence.
MADRID | What is important is that public debt drops and the economy recovers. And to achieve that, Japan has chosen the opposite strategy than the eurozone’s authorities.