Emerging Market Banking Crises Are Next
Asia Confidential thinks the vast majority of commentary has missed the underlying reasons for emerging market currency volatility, with the yuan being the latest example. What we’re really witnessing is a major rebalancing of global economic trade.Can bitcoin and other competing currencies coexist?
The concept of competing currencies has been the topic of fierce debate for decades. Over the years, two of the most prolific economists, Friedrich Hayek and Milton Friedman, discussed the matter repeatedly. Hayek, an Austrian economist, supported the idea, while Friedman, a Chicago economist, believed it would never be feasible. Up Next: Emerging Market Banking Crises
Asia Confidential thinks the vast majority of commentary has missed the underlying reasons for emerging market currency volatility, with the yuan being the latest example. What we're really witnessing is a major rebalancing of global economic trade. Prior to 2008, the US had a massive consumption bubble, financed by its current account deficit which exported U.S. dollars and fueled global trade. How the US dollar destabilizes the world
Karl Schiller, West Germany’s economics minister between 1966 and 1972, pithily pronounced that “Stability is not everything, but without stability, everything is nothing.”How could this be? In the post-second-world-war era, the world has been on a US dollar standard and the US Federal Reserve the world’s de facto central bank.Investors shouldn't fret over Chinese yuan volatility
By letting the yuan drop sharply against the U.S. dollar, Chinese authorities deterred excess inflows in recent days and proved the yuan not a constant one-way bet. But that doesn't mean China will stop the yuan from strengthening over an extended horizon. Thus, investors must avoid panicking and keep the currency's positive longer-term outlook in mind.The Glidepath Illusion-video
Rob Arnott explains why target-date funds fail to either maximize wealth or minimize uncertainty about future income.Your emotions are probably costing you money in the market
The market has dropped to a point where the investor previously said he'd be comfortable buying some stocks, but he's nervous and tells his investment adviser he'd like to hold off. When the market goes back up, the investor is angry he missed out on the opportunity to make money.In Search of a Stable Electronic Currency
Bitcoin’s future is very much in doubt. Yet whatever becomes of it, something good can arise from its innovations — even if the results are very different from its current form or its numerous competitors. What I have in mind isn’t another wave of price speculation. Instead, I believe that electronic forms of money could give us better pricing, contracting and risk management.From the Ashes of World War II, IMF Leads Global Economic Stabilization
The "International Monetary Fund" or the IMF was born from the ashes of the 1930s Great Depression and World War II. Like its sister institution, the World Bank and the UN System, its creation is grounded in the principle that peace and prosperity flow from cooperation, not from the pursuit of narrow self-interest. Howard Marks: In the End, the Devil Always Wins
If I ask you what’s the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can’t eliminate both at the same time. So the question is how you’re going to position yourself versus these two risks: straight down the middle, more aggressive or more defensive.Saving is good… but not for investing
It's a good thing to have some savings. When you put the money in a low-risk account, you can be pretty sure it will be readily available when you need it. Nonetheless, "saving" is not "investing" — and knowing the difference could pay off for you far into the future.How You Speak Affects How You Save Money
Yale behavioral economist Keith Chen presents evidence that people who speak languages that don’t have strictly future or past tenses are a lot more likely to save money.Wealth management and capital markets expected to drive Canadian bank profits
Canada's big banks are facing a tougher market for retail banking as the housing market slows and consumers look to reduce debt.However, the wealth management and capital markets businesses are expected to pick up the slack as the country's big financial institutions prepare to report their first-quarter earnings this week.What if Keynes had won the argument on a global currency?
The ramifications of this system would be huge. Firstly, the Forex market would never have existed. Currencies would no longer be traded with each other directly, but rather intermediated by bancors at a fixed rate, rendering the currency market redundant. In theory this should practically eliminate transaction costs, freeing up the movement of money between nations.Minsky on Banking: Early Work and Critiques by Krugman and Horizontalists Revisited
Unlike some other Post Keynesians (1), I have always included Keynes’s liquidity preference theory as well as Minsky’s financial instability within the endogenous money approach. For some time, the “horizontalists” argued that Keynes’s liquidity preference theory was equivalent to the “money demand meets fixed money supply” approach of ISLM textbook Keynesians.Bitcoin Innovations And Obstacles
The total market value of Bitcoins now exceeds $6.8 billion, and millions of Bitcoins are now being exchanged daily to purchase items such as food, tickets, electronic equipment and automobiles.Money makes people right-wing and inegalitarian
Rich people typically lean right politically. Are they motivated by deeply moral views or self-interest? This column argues that money makes you right-wing. It shows that lottery winners in the UK are more likely to switch their allegiance from left to right.Think piece: cryptocurrency gets real
Preston Byrne explains why bitcoin's recent problems do not mean the cryptocurrency-cum-payments-system is over. In fact, the promise of cryptography in payments and contracts is as exciting as ever.Dollar: No Surprises, Taper To Continue
There was very little consistency in the performance of the U.S. dollar Wednesday and quite a bit of volatility in U.S. equities. The Dow Jones Industrial Average started the day strong, gave up all its gains by noon, bounced before 2pm only settle down over 85 points. The performance particularly against the Japanese Yen mirrored the movements in equities albeit on a far more micro basis.Breaking the bank
Investors, who supported him [Jenkins] with £5.8bn of new capital last year, have been shabbily rewarded with a dividend that amounts to far less than the bonus pool. Thousands of loyal employees, many of whom have tried to serve customers well in the face of the bank’s problems, are being told to ‘go-to’ the job centre.