Monetary policy

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. [...]

Kredit verspielt

Angesichts der Dimensionen der aktuellen Krise nimmt es nicht wunder, dass das Vertrauen in Marktwirtschaft und Globalisierung erschüttert ist. Ob es jemals besonders verbreitet war, ist eine andere Frage. Aber selbst entschiedene Anhänger freier Märkte sind irritiert. [...]

Lack of trust, not lack of cash

There is no economic law that says that share prices should never fall. It would be wiser if central bankers stepped back and let the markets clear up the mess that was first and foremost caused by loose monetary policies. [...]

Disaster of our credit culture

Private and public overspending has fuelled Britain’s economic growth of the past but it is now high time to rid ourselves of our sweet tooth for debt. The Chancellor is right but his words are just a little hollow without an acknowledgement that the Government has contributed to the current credit crisis. The forthcoming comprehensive spending review would be a good opportunity for Mr Darling to follow his words with action. If his own finances were in order, his advice to the private sector would carry greater weight. [...]