News
CNBC | China Urges US to Protect Creditors After S&P Warning
China's Foreign Ministry said that the US must take responsible measures to protect investors in its debt after S&P threatened to lower its credit rating on the US due to a bulging budget deficit.
Econ Comments
Minyanville | Is the Yuan Overvalued?
Eventually China's property bubble will crash and its entire infrastructure boom along with it. When that happens, it will take a monumental effort to recapitalize the country's banks.
CNN: Money | Time to short the U.S. dollar?
Over the course of the next two months, there are several catalysts that are all set up to be negative for the U.S. dollar. And then there's the dismal deficit situation.
Minyanville | Five Things You Need to Know: The Myth of the Fed's Unprecedented Bond Purchases
Also, the impact of higher gasoline prices on household spending, the decline of home ownership and more.
Blogs
The Economist: Free exchange | When will it raise interest rates?
The doves still seem unpersuaded of the case for a rate increase. Some analysts are now talking about August, when the next-but-one Inflation Report is published, as the month when the rate cycle finally turns. That seems about right. If May is not the month, June and July probably won't be either.
Atlantic: Megan Mcardle | Inflation Won't Cure Our Debt Woes
Inflation was a good way to ease the burden of our World War II borrowing--once the war was over. But it is not a good way to ease the burden of an increasingly expensive entitlement program that shows no signs of winding down.
The Economist: Buttonwood's notebook | Where the US has already been downgraded
Since China is the world's key creditor, it makes sense to focus on its views. Never mind "negative watch"; Dagong downgraded the US back in November from AA to A+, on a par with Chile. Only Switzerland, Denmark and Australia are ranked AAA; China and Germany are AA+ or three notches higher than the US.
