News
Bloomberg | Dodd-Frank May Hamper Policy Makers Shielding Banking System in a Crisis
Federal Reserve Chairman Ben S. Bernanke and fellow U.S. policy makers may find themselves hampered in restoring financial stability should the European debt crisis spread to America.
Reuters | World Bank: China faces Europe risk, soft landing possible
China's economy faces growing risks from Europe's sovereign debt crisis and from debt held by local Chinese governments but it could engineer a soft landing by easing monetary policy, the World Bank said on Tuesday.
Econ Comments
Cato Institute | Can Inflation Kickstart the Economy without Killing It?
Many prominent economists believe the Fed should stimulate the economy by committing to an inflation target like 5 percent, rather than the current 2 percent. These economists argue that higher expected inflation means a lower real interest rate which can stimulate investment and hiring, thereby speeding up the economic recovery.
Washington Times | RAHN: Making money disappear
Currency not tied to gold or other standard becomes worthless.
CNN: Money | Should you move out of the dollar?
After shedding almost a third of its value over the past decade, the U.S. dollar has exhibited a few sparks of its former glory in recent months. Spooked investors have moved back into the greenback amid fears that Europe's debt crisis could turn into a full-blown meltdown.
Blogs
Atlantic: Megan McArdle | Farage: The Euro Is a Failure
At this point, though, the roads to salvation seem pretty rocky. A eurobond might do the trick--but a really credible eurobond, with serious guarantees for large portions of the outstanding sovereign debt, would require a treaty modification that they don't have time to do.
Econlog | European Banks
A lot of economists would say that you cannot shrink those balance sheets without causing horrible macro effects. That view, in turn, would justify a bailout. I am a holdout against that view.
WSJ: Real Time Economics | Fed’s Lockhart Prefers Communications Changes to More QE
As the U.S. economy points to a “somewhat better performance,” a top Federal Reserve official on Monday said he prefers “enhancing” the communications strategy rather than other options, such as buying bonds.
Minyanville | US Economy: Time Running Out for Q3
To avoid a recession in the first quarter of 2012, the Federal Open Market Committee needs to do something spectacular without hesitation.
