Economic Edge » Economic Articles

Korea & Syria Diversify Away From U.S. Dollar

EconEdge — Fri, 23 Feb 2007 18:31:06 +0000

More dollar dumping —

According to The Financial Times, The Bank of Korea plans to diversify its foreign currency reserves to gain higher returns. Apparently the bank is not happy with the U.S. dollar (and who can blame them?). The Bank of Korea plans to invest part of the nation's huge international reserves ($240 billion—the world's fifth largest) in overseas stocks (notably the blue chips of advanced countries) in an effort to gain higher returns. Korea's move follows a policy switch in China which also wants to diversify its $1 trillion+ of foreign reserves (70 percent or more of China's reserves are held in dollar-denominated assets).

52% of West Coast Residents Fear Housing Price Collapse

EconEdge — Thu, 08 Feb 2007 22:22:24 +0000

West Coast residents lack confidence in the local real estate market, according to recently released survey data by The Experian-Gallup Personal Credit Survey. According to Experian, 52% of West Coast (U.S.) residents fear that house prices will severely decline.

Kuwait May Dump the Dollar to Protect Its Economy

EconEdge — Thu, 01 Feb 2007 01:58:39 +0000

In an earlier post, I wrote about how the euro is gaining popularity as countries begin to reduce their dependence on the U.S. dollar. Last Wednesday, Kuwait announced that it may abandon the dollar, in favor of a basket of currencies, to protect its economy. This decision is being studied by Kuwait's central bank.

Could the Euro Replace the Dollar as the World's Reserve Currency?

EconEdge — Tue, 23 Jan 2007 20:40:12 +0000

The U.S. dollar remains the world's reserve currency (for now), with central banks holding 2/3rds of their reserves in dollars. But, according to recent news, the dollar's status as the world's reserve currency is changing. The dollar is being challenged by the euro, which is now five years old.

Immigrants Are More Likely to Become Successful Entrepreneurs & Business Owners

EconEdge — Mon, 15 Jan 2007 03:22:28 +0000

Interestingly, research shows that immigrants are more likely to become successful entrepreneurs than native-born Americans.

According to a new study released last week by Duke University and UC-Berkley, immigrant entrepreneurs founded 25.3 percent of all U.S. engineering and technology companies established in the past decade. This is very significant, since immigrants make up only 11.9 percent of the entire U.S. population.

Wal-Mart to Open Hundreds of Stores in India

EconEdge — Tue, 28 Nov 2006 22:29:01 +0000

Wal-Mart Expanding to India

Like many investors, Wal-Mart smells opportunity in India.

Yesterday Wal-Mart announced that it has formed an alliance with Bharti Enterprises Ltd. (India's leading telecommunications company) to open hundreds of stores in India over the next several years.

Milton Friedman Dies, Legacy Lives On

EconEdge — Sat, 25 Nov 2006 22:17:22 +0000

Many of you may have already read this, but Milton Friedman, Nobel-Prize winning economist and advocate of personal choice and limited government, died last Thursday (11/16) at the age of 94. Friedman championed personal liberty and changed the way the world thought about macro-economics, free markets & enterprise.

Business Owners Pay 54.3% Percent of all Income Taxes

EconEdge — Tue, 21 Nov 2006 01:31:37 +0000

The Washington-based Tax Foundation found that nationally most people in the top 1 percent of earners are business owners and entrepreneurs, and that in 2004, business owners paid 54.3 percent of all income taxes. Or, to put it differently, the top 1% are paying more than 54% of all income taxes.

Does Walmart—the World's Largest Private Employer—Deserve Its "Bad" Reputation?

EconEdge — Sat, 04 Nov 2006 05:20:02 +0000

According to a study released by UBS/Warburg, the world's largest private employer — Wal-Mart — can boost a marginal family's spending power by 10% or more.

Very impressive.

But, that's just the beginning. According to the study…

Japan's Money Management Industry Growing–Mutual Fund Assets on Verge of Boom

EconEdge — Thu, 19 Oct 2006 19:08:48 +0000

According to an article recently published by Investment News, Japan's money management industry (particularly its mutual fund sector) could be on the verge of a boom.

Economic Facts about Japan

Japan is the world's second-largest economy.

Encouraging financial self-education

EconEdge — Sun, 06 Aug 2006 15:21:25 +0000

More Q & A with Gary North. I thought the subscriber asked a good question, and I liked Gary's response…

Age: 51 (married); location: small town Utah; occupation: owner of 2 small businesses; income: $250,000+ per year; net worth: $2,000,000+; #1 Goal: prepare family for consequences of irresponsible U.S. fiscal and monetary policies.

Chinese Economy Grew 11.3% last quarter

EconEdge — Fri, 21 Jul 2006 01:50:36 +0000

According to reports, the Chinese economy grew 11.3% last quarter, the fastest pace of growth in almost a dozen years. Interestingly, no major economy has grown faster than 5% a quarter over the past 30 years. China serves as an exception to this statistic (assuming China can sustain its rapid growth rate).

Morningstar Will Pay $10 Million for Hedge Fund Database

EconEdge — Tue, 18 Jul 2006 23:59:31 +0000

Morningstar, the most well-known mutual fund ranking firm, aims to "bring transparency to hedge funds" in the same way they did for mutual funds. On Monday, Morningstar announced it will pay $10 million to buy the institutional hedge fund and separate account database division from InvestorForce Inc. According to Reuters, the all-cash deal will give Morningstar "access to the Altvest hedge fund database which will double the number of funds that the investment research firm already tracks."

Atlanta is home to fastest growing millionaire population

EconEdge — Mon, 10 Jul 2006 02:44:04 +0000

Atlanta is home to the fastest growing millionaire population in the United States, according to research firm Claritas.

The number of households in Atlanta with $1 million or more in investable assets (not including primary residence and consumable goods) will increase 68.8% through 2011, to more than 102,000 households. Nationwide, the millionaire population grew by 6.8% in 2005, according to the World Wealth Report from Merrill Lynch and Capgemini.

No more pennies–or nickels?

EconEdge — Thu, 06 Jul 2006 16:58:29 +0000

According to a Yahoo news article, pennies may soon become a relic of the past. For the first time ever, the U.S. Mint says pennies are costing more than 1 cent to make this year, thanks to higher metal prices (witness the huge run-up in commodity prices). But it's not just pennies; the same problem exists with nickels. Nickels now cost more than $0.05 to make.

Hedge funds go mainstream – Morningstar puts hedge fund data online

EconEdge — Sun, 02 Jul 2006 02:55:37 +0000

Morningstar recently announced that it is expanding its hedge fund initiative by launching hedge fund data on Morningstar.com and on Morningstar Advisor Workstation Office Edition. During the past two years, Morningstar (which has historically tracked mutual fund data) has built a database of more than 3,000 hedge funds, and continues to add to that data. The newest edition of Morningstar Direct will include hedge fund research reports written by Morningstar's new hedge fund analysts.

World millionaires hit 8.7 million, according to World Wealth Report

EconEdge — Sun, 25 Jun 2006 18:07:39 +0000

Every year, Merrill Lynch publishes its "World Wealth Report," which analyzes high net worth investors and their investing patterns. According to the wealth report, the number of people globally with more than 1 million dollars in net assets swelled by 6.5 percent in 2005 to a record 8.7 million.

Senate Votes Against Minimum Wage Increase

EconEdge — Wed, 21 Jun 2006 23:50:09 +0000

In my last entry, I wrote that the the U.S. House Appropriations Committee voted to raise the minimum wage. Today, however, the majority of the Senate voted against the minimum wage increase.

Against the Flat Tax

EconEdge — Fri, 16 Jun 2006 02:07:09 +0000

Laurence M. Vance (from Mises.org) has written a very good argument against the flat tax, as proposed by Steve Forbes. Learn why Vance is against the flat tax.

Flat Tax Reform–Steve Forbes' proposal

EconEdge — Wed, 14 Jun 2006 21:59:27 +0000

Many have argued that the U.S. should implement a "flat tax" instead of the graduated tax rates that we currently have. Steve Forbes, who wrote Flat Tax Revolution outlines why the U.S. needs tax reform and describes how a flat tax could solve many problems.

China Won't Make Yuan Fully Convertible; Fears Hedge Funds

EconEdge — Tue, 13 Jun 2006 01:43:17 +0000

China won't make its currency fully convertible for at least five years because it worries hedge funds may force the yuan to plunge, much as happened to the Korean won and Thai baht during the 1997 Asian financial crisis, said Li Deshui, a member of the central bank's monetary committee.

Hedge Fund Law Changing? ECB says hedge funds are major risk

EconEdge — Mon, 05 Jun 2006 02:44:30 +0000

According to an article published in The Financial Times, the European Central Bank claims that hedge funds are a major risk to the stability of the financial markets. In a report published on Friday, the ECB said that the collapse of a single major fund or several smaller funds could trigger major disruptions in worldwide markets.

Gary North's Top 3 Recommended Economics Books

EconEdge — Sun, 28 May 2006 02:53:49 +0000

The Top 3 Economic Books, as recommended by Gary North.

"Read Murray Rothbard's book, What Has Government Done to Our Money? It's free.
Next, read Frederic Bastiat's little book, The Law. It's free.

The Mindset of the Self-Made Rich

EconEdge — Tue, 23 May 2006 19:58:31 +0000

Good personal finance advice (from Gary North) about how to purchase cars wisely, handle expenses and make financial decisions.

THE MINDSET OF THE SELF-MADE RICH

What you read here, you can confirm by reading the book, "The Millionaire Mind."

The Root Cause of Illegal Immigration: The Minimum Wage Law

EconEdge — Sun, 21 May 2006 20:42:31 +0000

Lately, there's been a lot of talk about strengthening the southern border between the U.S. and Mexico to prevent the continued mass influx of illegal immigrants. Proponents of "open borders" claim that…

Dubai is world's fastest growing city and hottest real estate market

EconEdge — Sun, 14 May 2006 21:41:42 +0000

Just finished reading an article that describes Dubai's exponential growth, both in terms of its real estate appreciation and the sheer number of people relocating to the city.

Dubai's growth can be traced back to May 2002, when Sheik Mohammed bin Rashid al-Maktoum issued a decree that, for the first time ever, allowed foreigners to buy and sell property. This decree was issued to reduce Dubai's economic dependence on oil. Since May 2002, the nation has experienced incredible property appreciation and economic growth. Investors are attracted to Dubai because of the country's stable political environment, zero property and income tax, and its high standard of living.

China increasing its stockpile of minerals and natural resources

EconEdge — Sun, 14 May 2006 00:09:46 +0000

According to Bloomberg, China plans to build strategic reserves of key minerals such as uranium, copper, aluminum, and steel (along with oil reserves). Another catalyst for rising commodity prices..? Excerpt below…

China Urged to Quadruple Gold Reserves

EconEdge — Thu, 11 May 2006 15:00:27 +0000

A Reuters article (excerpt below), published on Tuesday, notes that some Chinese economists are urging Beijing to substantially increase gold reserves, and to diversify holdings away from the dollar.

BEIJING — Some Chinese economists are urging Beijing to quadruple its gold reserves to 2,500 tonnes from the current 600 tonnes because the country foreign exchange reserves had become the world's largest, an official industry newspaper reported on Tuesday.

Gold Hits $705 (New 25-Year High), Fed Increases Rates Again

EconEdge — Thu, 11 May 2006 01:18:07 +0000

Trouble ahead? Gold hit $705 today, marking a new 25-year high. I can remember when gold hit $500, and the big response that created. It's $700 now…hard to believe.

In other news, the FOMC hiked the Fed. Funds rate to 5% today, adding another 25 basis points (0.25%), its 16th sequential increase since June 2004. Those with ARM's (adjustable rate mortgages) will be hard hit by another rate increase. More foreclosures on the horizon?

Why You Should Never Finance a Car

EconEdge — Sun, 07 May 2006 17:03:53 +0000

The advice below is quite possibly the one of the best personal finance tips ever. Courtesy of Gary North…

"Whenever I see an ad for a new car, I think, 'Suckers!' There is no more economically stupid purchase than a new car.

Manipulating the Masses–Be Wary of Government Statistics

EconEdge — Fri, 05 May 2006 18:41:50 +0000

In the article below, John Williams explains how the government misreports economic statistics and "massages" the numbers to suit its needs. To quote Benjamin Disaraeli, “There are three kinds of lies: lies, damned lies, and statistics." Williams explores how misleading statistics can be and provides historical examples of "fudging the numbers"…

George Soros Predicts a U.S. Recession in 2007

EconEdge — Thu, 04 May 2006 16:38:27 +0000

While speaking to an audience in Singapore in January, George Soros stated his belief that the U.S. is likely to experience a recession in 2007. The full text of the article can be found here: George Soros Predicts U.S. Economic Recession

International Real Estate Investing

EconEdge — Thu, 04 May 2006 04:04:23 +0000

Q & A With Gary North
(Originally published on 3/30/06)

Age: 47; occupation: physician; assets: town home in NZ, paid for. Home in NY, paid for. Lake home in NY, owing 120k. Retirement savings: $900 K in Vanguard.

China: The Next Economic Superpower–demand for oil and raw materials

EconEdge — Mon, 01 May 2006 22:00:57 +0000

In the article below, Puru Saxena asserts that America's days as the undisputed global leader are numbered. Saxena clearly explains China's consumption and increasing demand for natural resources and raw materials.

Inflation is NOT beneficial

EconEdge — Thu, 27 Apr 2006 04:09:45 +0000

From Puru Saxena, who produces Money Matters, a monthly economic publication that highlights investment opportunities.

Some argue that inflation is a good thing, a necessity in the modern economy as it facilitates trade. Personally, I don't buy into this concept because throughout the 19th century, we witnessed mild deflation, yet our world made huge progress over that period.