ALL BLOG POSTS
It might be a surprise to most people but one of the fastest growing economies in the world over the last 10-15 years has been Angola. A combination of structural reforms and a commodity boom have boosted growth in the oil-rich African country. However, Angola is, however, at a crossroad and the future of the boom might very well now be questioned.
The Nikkei had a 20% set-back, but is now surely making a major comeback. This morning Nikkei is up 3.5%. The rally continues supported by very strong macroeconomic numbers and you have to be very suborn to continue to claim that monetary easing is not working in Japan (I wonder what Richard Koo will be saying...)
Bank of Japan governor Haruhiko Kuroda must feel relieved as attention has turned away from sharply rising bond yields and a sharp set-back in the Nikkei to bad Federal Reserve communication and market turmoil in China. And I am sure that he like me have noticed that Nikkei has outperformed most major global stock markets in recent weeks. That could seem like a vindication of BoJ's policies and to extent it is. However, I would cautious against too much optimism. Kuroda still needs to work on this communication.
Until recently the global financial markets were on an one-way trip to recovery. Basically since the Federal Reserve in September implicitly announced the Bernanke-Evans rule investors have been betting on an US economic recovery - higher real and nominal GDP growth - and the Bank of Japan's decisive actions to implement a 2% inflation target also have helped the sentiment. However, the picture has become a lot more confusing in recent weeks as turmoil has returned to the global financial markets.
China has certainly moved to the very top of the agenda in the financial markets this week and a lot of what is playing out in the Chinese markets is eerily similar to what happened in the US and European markets in 2008.
My friend professor Steve Horwitz has a very good offer for students. He is offering an eight-week long program on the Great Depression at the Learn Liberty Academy.
"Fed tapering" seems to be repeated in every single story in the financial media over the last couple of days. However, I am afraid that the financial media - as often is the case - is overly US centric. We might want to look at another central bank than the Fed. We should instead pay some (a lot!) of attention to the People's Bank of China (PBoC).
I should really be sleeping but George Selign just put out a blog post on Free Banking and NGDP Targeting.