Europe's central bank is taking aggressive action to prevent bond yields from rising … to 0.3 percent in Spain or 0.6 percent in Italy. This is the evidence of a massive bubble.
If Europe wants to build wealth for its poorest members, it needs private entrepreneurship. But entrepreneurs need exactly the opposite of the Keynesian plan for building a European superstate.
The problem with the European Union is not that it seeks to integrate Europe's economies. The problem comes from attempts to integrate politics as well.
Mainstream economists claim China needs more consumption and a bigger welfare state. They think China's high savings rate is a bad thing. These economists are wrong.
The ECB is now turning to a new mechanism by which a bond’s value can be legally reduced by the issuer in times of hardship. The purpose is to allow central banks and governments new ways of ripping off the private sector.
Since the trade balance has nothing to do as such with either the supply of money or the demand for money, we can conclude that trade balances do not determine the purchasing power of money of respective countries.
The United States currency has only really weakened relative to the yen and the euro, but that depends on optimistic expectations of a European and Japanese economic recovery.
