View: China’s Currency Distracts From U.S.’s Policy Failings

View: China’s Currency Distracts From U.S.’s Policy Failings

Republican presidential candidate Mitt Romney says that on “Day One” in office he would declare China a currency manipulator. So it’s safe to assume that were he president, he would sign the bill that passed the Democratic- controlled Senate last week to impose sanctions on China if it doesn’t free the yuan to appreciate against the dollar.

House Speaker John Boehner has said he will try to prevent a vote on the currency measure. We hope he succeeds. It’s unfortunate that the temptation to blame other countries for America’s self-inflicted woes is gaining bipartisan support.

Let’s be clear: We don’t favor China’s policy of keeping the yuan artificially weak, and thus making its exports cheaper. But blaming the U.S.’s sluggish economy on China’s currency policy is a diversion from more fundamental problems: the inability of political leaders to revive the economy in the short term (by helping homeowners with “underwater” mortgages, by investing in infrastructure and by providing tax incentives for employers to increase hiring), and in the long term with a budget-balancing plan.

http://www.bloomberg.com/news/2011-10-18/china-s-currency-serves-as-distraction-from-u-s-s-policy-failings-view.html

US debt deal agreed but may not save AAA credit rating

US debt deal agreed but may not save AAA credit rating


Markets experience volatile trading after news of a deal yet to be approved by Congress

America has moved away from the brink of a catastrophic default after a deal was reached overnight to raise its debt ceiling.

Stock markets around the world briefly rallied on Monday, in relief that the world's largest economy would probably avoid running out of cash this week. But the agreement, which includes around $2.5tn (£1.5tn) of spending cuts over the next decade, has been criticised on both sides of the political divide, and will probably not save America's triple-A credit rating..

http://www.guardian.co.uk/world/2011/aug/01/debt-deal-agreed-concern-congress

Euro zone's sovereign debt crisis escalates

Euro zone's sovereign debt crisis escalates

Europe Acts to Contain Debt Crisis
 Reassurances Fail to Stem Fears That Woes Will Infect Portugal and Spain; EU-IMF Aim to Wrap Up Irish Aid Package

BERLIN—The euro zone's sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fears.

Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect, with the euro tumbling and the selloff in Spanish and Portuguese sovereign bonds continuing.

Europeans Clash on Bailout Zapatero Rules Out Rescue for Spain Ireland's Austerity Fails to Ease Fears Heard: Belgium Is the One to Watch How a Lack of Market Confidence Spreads The Source: The Euro is Totally Fine. Honest. Complete Coverage: Euro Zone Crisis Sovereign Debt Watch "If we continue to see the recent trend in Spanish bond yields then the crisis is going to be taken to a completely new level, as Spain accounts for approximately 11.7% of euro-zone [gross domestic product] which is pretty much double the figure of Ireland, Portugal and Greece [combined]," said Gary Jenkins, head of fixed-income research at Evolution Securities.

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