Lost in this discussion is that modern Greece, formed in 1830, has never really been required to stand on its own. Generations of support from abroad, typically given for strategic reasons, has created a false sense of prosperity in the country.
Most of the so-called developed world has followed the U.S./UK-led 'Anglosphere' in pursuit of Keynesian economics, focusing on consumption-based economic growth that can supposedly be stimulated by currency debasement.
Most of the so-called developed world has followed the U.S./UK-led 'Anglosphere' in pursuit of Keynesian economics. On the other hand, the Germans and the Swiss have long been seen as the champions of Austrian economics, which favored an economic growth based on savings, production and sound money.
Even if we estimate that real inflation is currently 3%, then our "normal" rate of interest should be around 5%. This is some 50 times the rate paid currently on most bank deposits. This gap is distorting the economy in untold ways.
Late last year, with the U.S. economy experiencing falling unemployment and seemingly low inflation, observers were extremely confident that the Federal Reserve would move judiciously in 2015 to restore 'normal' interest rates sooner rather than later.
Despite falling oil prices, the Organization of Petroleum Exporting Countries (OPEC) voted on November 27th not to cut production in order to boost prices. The key to this decision appears to have been the attitude of Saudi Arabia.
Last week, the unelected European Commission demanded that the United Kingdom pay an additional $2.8 billion to fund the European Union.
On September 26th, the English Parliament voted to join the U.S.-led bombing of ISIL, at least in Iraq. The news was received with relief by most in the Anglosphere world and throughout Europe. However, very little regard has been paid to the relative benefits and costs.
Last weekend several polls emerged that shockingly forecast Scottish independence from Great Britain is within the realm of political possibilities.
The ramifications of Scottish independence go far beyond national pride and historical score settling. Watchers of the global economy should be aware of the potentially serious follow-on results.
Unlike Iraq, the Ukraine threatens major power conflict which could hurt badly the EU, the dollar, and the slowing global economy. Meanwhile, thin financial markets, fed by central banks with cheap easy money, continue to climb. Investors may ponder for how long.
In light of the increasing evidence that Keynesian monetary stimulation is failing to ignite meaningful improvement in the broad economy, central banks may be tempted to create even more synthetic money.
On August 28th while the geographical area formerly known as Iraq descended further into chaos, President Obama announced to the world "We don't have a strategy, yet." A few days later, another brave American journalist was brutally beheaded...
The current stock market is earning a deserved reputation as being coated in Teflon. Bad or disappointing news just doesn't appear to stick, and has done nothing to slow the market's upward trajectory.
The current situation in Iraq is a modern tragedy. But in more practical terms it is a very stark illustration of the folly of central planning and the limits of state power in the face of entrenched traditions and proven history.
On June 5th, Mario Draghi, President of the European Central Bank (ECB), announced a package of measures, including a policy of negative interest rates, aimed at encouraging or even forcing Eurozone banks to increase their lending to businesses.
By concluding that capitalism, even if it is confined to just a few countries, will lead to increasing poverty among the masses around the world, many cynical observers may conclude that Piketty is laying out a carefully planned case towards global socialism.
The French economist Thomas Piketty has achieved worldwide fame by promoting a thesis that capitalism is the cause of growing economic inequality. Unfortunately, he is partially right.
At 35 percent, the U.S. has the highest corporate tax rate in the developed world. But this doesn't even factor in the additional taxes heaped on by many of the states.
When the former Soviet Union collapsed almost 25 years ago, most global strategic forecasters assumed that the U.S. would adapt pragmatically to her new status of sole world superpower.
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