Archive for March 11, 2014

Trouble in Asian Markets

For anyone who takes an interest in global economics, our eyes have been largely looking at Western economies for tales of woe, stagnation and debt for some time.  But there are signs that this situation may be starting to reverse.

From our last post highlighting the recovery in the UK and some of the European countries we know turn our eyes to Asia where this week the major share indices all took a tumble.

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The problem seems to have come from the economic data being released from the two big players in the Asian market – China and Japan.   Both reports seem to be pointing towards a slowdown in the area.  The Hang Seng fell by nearly 2% and the Nikkei index closed down around 1%.

So what was in these reports to cause such a steep fall?  Well although it was not much of a surprise given the situation Japan finds itself in, the record deficit reported was still larger than expected.  What was probably more damaging though was that it’s 2013 growth estimates were revised down to combine with this bad news.

The startling figure in the Chinese figures was the fall in it’s export levels – a huge drop of 18%.  There were very few analysts expecting a fall of this magnitude and the markets took the news very badly indeed.   The Asian sell off was swift and heavy and even took down the linked Australian share index down 1% too.  There’s an interesting piece on the Newsnight programme currently available on the BBC website – I use this to watch BBC Iplayer in Ireland and

Most of the big miners took a hit, companies like BHP and Rio Tinto supply the raw materials that fuel the growth in the Asian market particularly China.  The hits were inevitable simply because the values of the metals fell in line with the news, copper fell to it’s lowest level since early last year.  Iron ore futures and steel also both dipped sharply in response to the publication of the data.

China is beginning to feel pressure on all fronts economically, and even reported that very rare event a trade deficit of about $22 billion dollars in February, only twelve months ago the corresponding figure was another surplus, an enormous switch in fortunes.  This is a sharp warning that the economic advantages that China has built it’s growth on are beginning to wane, you can only manipulate your currency value for so long and the competitive advantage of lower labour costs don’t last forever as an economy adapts.

Further Information on IP address Modification here.

 

UK Leading European Recovery

Economists have been pondering and discussing when the major economies of the world will start to recover.  There is a second discussion which refers to how sustainable these recoveries are going to be as well.  In Europe, there have been a variety of tactics employed to aid recovery with mostly limited success.

The UK however seems to be doing comparatively well, it’s certainly growing at a faster rate than most of the other developed countries including those in the European Union.  This July it is expected that most of the recession damage will have been repaired specifically due to income and GDP.  Of course this still means that the country will have lost out on all the lost growth over the last 5 years.

money-british-europe

As in other European countries, unemployment still remains high and for those in work – their real income has been on a downward spiral for some time.  This is one of the worries of most of the recoveries, there is no substantial ‘feel good’ factor or increase in spending within the domestic markets to fuel the continued growth,

Whatever policies both the UK and European Governments implement they are still very much affected by what happens to the US economy as well.  This was where the crash started, the sub-prime loans scandals within the housing sector.  It could  be argued that this is where the UK recovery started too, with the Federal Reserve injecting huge amounts of cash into the US economy and slashing interest rates to a marginal level.

Europe apart from Germany and the UK is still showing little signs of a complete recovery, inevitably people are pointing the finger at the single European currency.   Germany has always benefited most from the Euro, simply because it has an efficient economy and the Euro’s level has helped greatly with it’s export markets.  German goods and services would be much more expensive if they were still using the Deutschmark, whereas less efficient economies like Spain and Greece have been at a significant disadvantage.

Also Britain has much more fiscal leeway because it still retains it’s own currency, allowing the country much more flexibility in attempting to implement recovery and economic solutions like injecting more cash into the economy.  The problems with the Eurozone have also hurt the UK recovery, simply because it is the country’s largest export market by a country mile.

Some of the best coverage of the economic situation can be found on the BBC website, especially the news, and shows like Newsnight which can be accessed on the iPlayer. You do need to be based in the UK to access these, although you can also view by using a British IP address to fool the web server.

There is also a lot of intelligent and unbiased economic journalism on the German media but of course, you’ll need to understand the language to enjoy this.  There’s a similar process here for accessing German sites.

 

Economic Dependency Causes Risks

We can see that many political events across the world are heavily influenced by economic links.  Ukraine seeks greater ties with Europe but is heavily reliant on Russian gas as an energy sources.  Russia seeks to flex it’s muscles internationally but is hampered by the fact that it’s economy is almost wholly reliant on selling raw materials like gas to European countries.  Stock markets and currencies tumble when political events cause instability in these relationships.

Australian Economics

Of course some of these links bring economic prosperity to a nation too, take the almost symbiotic link that Australia has with China.  The huge growth in China has required a huge amount of raw materials to satisfy it, as the smog clouds over Beijing testify too.  A lot of these materials come from the nearby resource rich Australia, which has even been dubbed ‘China’s mining pit’.

It’s hard to find an economy anywhere in the world that is so dependent on another, China buys 31% of Australian output.  This is usually incredibly beneficial except that it makes the Australian economy very reliant on how China fares economically.  So last week when a few weak statistics suggested that China’s growth was stalling – Australia got to share the pain.

Many investors already buy Australian stock as a means to leverage the Chinese market.  It’s much safer to invest in stocks and shares in Australian as opposed to the state controlled stock exchange in China.  Chinese restrictive practices have already started to impact it’s growth especially those on digital communication.  Many firms try to avoid setting up headquarters or offices in China due to the heavily filtered internet access.  Companies and individuals are forced to invest in a fast proxy simply to make their usual infrastructure work in that environment – for many it’s simply not worth  the effort choosing to settle nearby in places like Singapore which is not regulated as dramatically.

There is probably little that Australia can do in the short term about it’s reliance on Chinese success.  The worry that the Chinese economy is looking very fragile at the moment is a very real one however. It’s currency is overvalued, there are little sign of productivity gains or the vital structural reforms many hoped for.  Inflation is rising and there is a growing outflow of capital to investment markets abroad.  Australia has little options though to continue to trade heavily with China whilst seeking to develop other trading partners to try and reduce their exposure.

For more information on this subject see this video explanation of how to access Australian media sites.

What Makes Proper Dealing On Debt Problems Advantage

It is not denying that most countries have encountered debt problems. Each country has started on their status from lower to become higher ones. They did a lot of things just to enhance their state. They did lots of ways and ideas in order to deal some common state problems. Debt is one of the most obvious and well-known state problems that the other countries also have. Not all countries around the world are having good and higher status without having any debt from the other rich countries. Yes, there are rich countries around the world. This means that not all countries have less status and not all countries are rich. Therefore, it is possible that there are counties that need help from the other countries to get funds for any projects and plans that they want to happen for the said country. Videoovervågning is another explanation that will help a particular country asked some ideas on how to deal with debt. Some reasons why other countries have debt to some rich countries, it is because of local monetary fund shortage. 

It is obvious that some other countries have lack of monetary fund for a particular plan to develop their country. This means that they need to ask money through debt in order to have monetary fund on their plans. Videoovervågning has created lots of ways on how to deal with the problem. African debt is noteworthy news to tackle with. Africa before was not a progressive country. It encounters lots of issues such as drought and famine. With the problem of scarcity in water, some other places in Africa have this kind of problem that totally affects the loves of Africans. Once you check on some particular area in Africa, you would find out that they don’t have enough monetary funds to build an answer for a particular project such as installing water supply. With this, Africa has debt on some other countries which they really thank of. Africa has a remarkable history from being a poor country that becomes a rich country now. Yet there are some part of Africa was not yet developed but the operation to change this is ongoing now. 

Videoovervågning can provide you some ideal solutions on how to deal with debt. It is obvious that there are lots of ways these days that are coming out just to help dealing on debt. Debt consolidation, debt settlement and some other ways are available in the market. The debt is an obligation owed that needs to be paid up to the agreed date of payment. But when talking about debt of a particular country, this would be a serious problem to deal with. It needs to have a powerful idea in order to pay the debt. With some ideas to deal on the debt problem, Videoovervågning would help a lot. Monetary fund for a particular country must have large amount and if the money is not that large or not enough, Videoovervågning would help deal with the problem.