Monetary policy

Global Fiscal Disasters and Recoveries: What Do They Mean for New Zealand and Australia?

There are good reasons to be very concerned about the future of the global economic and monetary order. In Australia and to a lesser degree in New Zealand we are probably in a somewhat better position than most other developed nations. We should use this opportunity to prepare ourselves for the next stages of the Global Financial Crisis. [...]

Das Leid mit dem Aussie-Dollar

Vielleicht ist es den vom starken Franken geplagten Schweizern ein kleiner Trost, dass auf sie Schnäppchenpreise nur einen Steinwurf hinter der Grenze warten. Ein Sydneysider muss dafür drei Stunden nach Neuseeland fliegen. [...]

America and Europe jump together

If Europe and America are bent on committing suicide, there is nothing Australia can do to stop them. But we can decide not to join them. [...]

Farewell to Europe’s old guard

ast week’s unexpected resignation of Bundesbank president Axel Weber sent shockwaves through the German government. It reignites the debate about the best way to deal with the euro crisis, the policies of the European Central Bank (ECB) and Germany’s role within European Monetary Union. It also poses questions about an institution that was once regarded as the best central bank in the world. [...]

Trichet’s prize for shredding Europe

Charlemagne not only entered the history books as the great unifier of Europe. He also established a stable, silver-backed currency whose weight units survived for more than a millennium in many countries. Giving a prize in Charlemagne’s name to a person complicit in the rapid debasement of a paper currency is another bitter-sweet European irony. [...]

Where Europe’s smart money hides

The enormous Swiss currency reserves are a direct result of the euro crisis as the SNB is fighting an uphill battle to stabilise the Swiss Franc against the weakening euro. Switzerland’s central bank soaks up euros and sells off francs on a massive scale. [...]

A bailout that hurts the Germans but doesn’t help the Greeks

As long as countries such as Greece are joined with Germany in a monetary union, this monetary union will not work. Both of them cannot be members of workable monetary union at the same time. It is high time for one of them to leave. [...]

Europe’s slow, painful death

There is something comical about current talk about a potential Greek bankruptcy. No, the state of Greece’s public finances is certainly no laughing matter. But it is funny how politicians and financial markets are getting excited about this as if it were news. [...]

Property bias

Price increases in any other market are called inflation, but when house prices go up the market is said to be healthy. But house price increases are only shifting wealth from non-owners to owners. Rising houses prices never create wealth. In fact, they make tenants wishing to buy property worse off. [...]

Australia’s forgotten savers

Australia’s addiction to the property market needs to stop if we care about housing affordability. And if we care about the level of private debt, then we need to make saving a much more attractive option for young Australians. [...]