Steve Roach, non executive chairman of Morgan Stanley Asia, says that China may stop investing in Treasurys as growth slows down in the US. The Asian power may instead concentrate more on development of internal demand. China has traditionally bought US debt to finance the economy of the country, and so that there will be more Western consumers for goods manufactured in China. However, decreasing demand from these quarters may leave China with the only option of exporting less and focusing more on buying at home. This is a wake up call for China, Roach said to CNBC. In Roach’s words, China will no longer be able to be hooked onto the American consumer bandwagon, and stay on the export led growth course. With heavy focus on exports, China the massive foreign exchange reserve accumulation,  [...] 

The Japanese finance minister repeatedly stated that the US dollar or the US treasury bonds have not lost faith by the country. The Nikkei market opened down by 1.4 per cent, later making slight gains. The credit rating of the United States has been downgraded for the first time in history. Other markets in Asia were not even as promising. The S&P / ASX – 200 in Australia saw a loss of two percent early on in the day’s trading. In addition, New Zealand indexes fell upto three per cent. The reports are mixed, and this would not be helpful in reducing the rising concerns that this could lead to a crisis in the global markets. The S & P downgrade of the US credit rating was from AAA to AA+. Efforts have been going on all over the world so that markets are calm in the aftermath of the  [...] 

The freelancers, contractors or any other self employed person has enjoys a potential of tax deduction which is otherwise barely possible. Looking at the current job status of the US tells that nearly one fourth of the population is engaged in work as contractors, freelancers or sole proprietors. This has enabled these self employed people to make use of maximum tax deductions possible to carry on their business smoothly. These self employed people have been granted by IRS to deduct anything that is considered necessary to run their business from their taxes. There can be a number of ways to make the tax deduction amount for these self employed people rise by leaps and bounds. The key is to identify these expenses and present them accordingly in a way that the task is deeply required for the  [...] 

I have always believe that innovation is the way of the future. On the one hand, you have companies like Palm that have great ideas but are so terribly slow to market that their ideas get crushed. On the other hand, you have companies such as Apple that release their products (all of them extremely innovative, as you well know) like clockwork. The American economy counts on businesses like Apple and Google thriving on innovation. And to see the success of the iPhone proves that a quality product, even at a higher price, will always be a success. China can continue to push out their cheap phones and it won’t make a difference to the iPhone. But the iPhone’s phenomenal sales have impacted the federal deficit. How, you may ask? Well, the Asian Development Bank Institute recently released a  [...] 

‘The luck of the Irish’…it’s something we all hear so often about. But the Irish economy has been many things in the last few years, lucky has not been one of them. And when interest rates for Irish government bonds surged recently, it served as a stark reminder to other nations burdened by European debt just how difficult it will be to cast off the yoke of public largess’ gone by. As it is, the Irish bond market was already plummeting after the Irish government recently announced that they will almost double tax levies and spending cuts across the board. This is to control the huge deficit they have to face up to. But investors might not take very kindly to it. It is less an indication of steely resolve to work through a perilous issue and more of rank desperation  [...] 

Everyone is waiting on the Fed to see just what they have to offer now. Regardless of whether the Democrats will be routed or not, the Federal Reserve will implement new measures this week to breathe some life into a comatose economy. Many investors are hoping for the Fed to come through for them and the stock markets have been surging since August as investors fully anticipated that the Fed would set off on on another round of what is called quantitative easing in financial circles. Gold and equities are beginning to pick up pace and dollar rates have been dropping, as have market interest rates. But because the official rate being offered is already near zero, the central bank is expected to instead turn their attentions to United States Treasury securities among other investments in an effort  [...] 

Even as the world looks on with eyes agog at the success of Asian countries even in the light of this recession that has plagued us all, the powers that be at the International Monetary Fund (IMF) have warned Asia about inflationary pressures that are building up in the Asia-Pacific region. While high growth has been the norm rather than the exception in Asia, with many celebrating the successes of the Eastern world, the IMF has sounded a note of caution to these nations that are the vanguard of the global economic recovery. A report that was recently released by the IMF stated that the inflationary pressures that could hit the region might necessitate policy tightening measures to curb any potential problems that may arise. The IMF has taken cognizance of the fact that growth in the Asia-Pacific  [...] 

The recession has hit our economy really hard, and there should be no bones made about that. As stimulus packages were announced and subsequently deployed, unemployment ending up touching all time highs and the deficit showed no signs of contracting in the slightest. In the midst of all of this, the government has sought to boost the value of export earnings as earned by US corporations at this moment in time, and to do so the Fed is being forced into devaluing the US Dollar. By doing so, overseas earnings become more lucrative but this sort of protectionism is perhaps not the best policy to follow since it is at the end of the day a trade barrier plain and simple and as many trade barriers before it, it will fall short of expectations. When attempting to ascertain the value of currencies,  [...] 

There was this chain-smoking comedian (I think it was Bill Hicks, but I’m never too sure about these things) that once claimed more non-smokers died every day when compared to smokers. In a nutshell, his assertion was that “It’s you people dying from nothing that are screwed.” That is some very twisted logic over there, enough to get more than just a few chuckles from an amassed audience. But it is the kind of fuzzy logic that seems to apply to the troubled European zone. The worries and ill economic health of a few nations has left a question mark hanging over the European zone. Take the case of Ireland. If you do hold any ten year government bonds issued by the Irish, you might have noticed that the yield on these bonds neared 7% on the 29th of September. That’s a record figure  [...] 

The effects of this recession are widespread and long lasting, make no mistake about it. The global economy is like a boxer on the ropes, reeling and stunned after being landed one well aimed fist after another. There is only so much of a beating that anyone can take and the effect of all of this is that worldwide economic growth will be lackluster for possibly the next few years, maybe even the next several years on account of feeble consumption growth. Currency intervention is a tool that is being used widely by more and more economies in order to get a greater share of the global trade pie, very little of which is to be had. In these dire economic times, exports and global demand is where the money is made by countries and currency intervention is one of the tools by which this can be more  [...]