Category: Economics

Why is a US interest rate rise such a big deal?

  • Interest rates (a key tool of monetary policy) are a fundamental driver of where the global savings that swish around the planet are parked.
  • Industrial world interest rates have been zero or close to zero for a while now - the US will be the first to raise rates.
  • So already have seen a global move towards buying US$ assets, hence US$ stronger - a rate rise will reinforce this trend.

Macrosnap Australia economy?

  • Big commodity exporter hence suffering as commodity boom has ended (due to weak demand from China).
  • So most Australia macroeconomic variables looking cloudier.
  • Growth slower, budget deficit up, unemployment up.

Broader rightward shift in French society?

  • Yes - desire for order, feeling that society has gone too far to the side of liberalism & individualism.
  • Roots lie in economic woes of former socialist president François Mitterrand's two terms (1981-1995).
  • Amplified by recent terrorist attacks and fears of immigrants.

Why has South Africa’s currency fallen so precipitously?

  • President Zuma seems to be messing things up.
  • Recently fired respected finance minster and replaced him with an inexperienced yes man, thus putting under question the independence of the country's financial & macroeconomic policy-making institutions.
  • Backdrop a trajectory corruption, cronyism, weak economic performance and sovereign credit rating downgrades.

Global growth macrosnap?

  • US remains engine of global growth.
  • Europe recovery gaining momentum.
  • Emerging markets stay weak as China growth slows.

Brazil still in a quagmire?

  • Yes - economic crisis continues.
  • Political crisis continues too - Rousseff hugely unpopular.
  • Petrobras corruption scandal moving closer to her as investigators arrest corporate, financial, judicial & political grandees.

Japan Economy Snapshot 2015?

  • Recession ending but growth still slow: PM Shinzo Abe’s plans (Abenomics) for reviving the economy have had mixed results.
  • Minuses: Government debt remains large and a problem, so budget reform urgently required, but apparently not happening fast enough.
  • Pluses: Positive consumer sentiment, exports healthy despite global wobblies as China slows.
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