China’s deflating property market threatens wider economic trouble
China’s woes could prove to be the global economy’s biggest blow The Reserve Bank of New Zealand a year ago became the first advanced central bank to raise interest rates to cool its economy to tackle inflation. So far, the RBNZ has lifted its key rate seven times. The Bank of England, starting last December,…
The energy crisis is likely to last years
An overreliance on vanishing Russian fossil fuels will torment Europe. Europe is restarting mothballed coal-based power plants because the benchmark electricity price has exceeded 1,000% above its average of the past decade (where prices are set by the marginal cost of the last unit – essentially, the most expensive unit – of energy purchased to…
Higher US interest rates test the world
A high US dollar exporting inflation, a shrinking US economy and struggles in emerging countries stand out as challenges. New York’s Plaza Hotel, in financial circles, is best known for when the finance ministers of France, Japan, the UK, the US and West Germany gathered in 1985 to suspend the free-float of the US dollar….
Nuclear energy is a promising solution for climate change
But the clean-energy option will forever risk a catastrophe. (Reading time: 4 mins) Fukushima, on the northeast of Japan’s largest island, is vulnerable to earthquakes and tsunamis. From 1971, the area hosted the Daiichi nuclear plant. Based on global appraisals of tsunamis, the facility was built 10 metres above sea level. The commercial plant and…
Targeted online ads are the success of ‘surveillance capitalism’
But display ads face privacy and regulatory challenges that reduce their effectiveness. In 2007, Jonathan Trenn of the US bought a diamond ring from Overstock.com so as to propose to his girlfriend in a few months’ time on New Year’s Eve. Within hours of buying the ring, Trenn received a “shocking call” from a friend…
Scarcity becomes common
The impediments to supply are likely to last and disrupt growth and provoke inflation. Abbott Nutrition, which controls 48% of the US$2.1 billion US infant-formula market, in February recalled three product categories and closed a plant in Michigan after four babies who had consumed its powdered milk became sick with life-threatening bacterial infections even though…
Record high inflation could trigger a fresh eurozone financial crisis
Any crunch would centre on Italy, have no obvious solution and remind that the euro’s frailties are unaddressed. Italy’s 66th post-war government collapsed in January 2021 when Prime Minister Giuseppe Conte was forced to resign after former premier Matteo Renzi removed his minor Italia Viva party from the ruling coalition. President Sergio Mattarella encouraged the…
Superbugs are outsmarting antibiotics
A market failure means pharmaceutical companies are failing to address the threat. In 1938, Ernst Chain, a German-born biochemist working at Oxford University, found an article on penicillin written nine years earlier by UK bacteriologist Alexander Fleming. In 1928, by fluke, Fleming noticed a zone around an invading fungus on an agar plate in which…
Powell seeking immaculate disinflation
His problem? Monetary policy is ill-suited to fight inflation arising from supply constraints. Federal Reserve Chair Jerome Powell appeared on March 3 before the Senate Banking Committee and vowed the US central bank would quell inflation running at four-decade highs. “We are going to use our tools,” he said. Then came a pointed question. Would…
Central banks are going green to questionable avail while stirring risks
A loss of autonomy to fight inflation is just one of the dangers. Finland’s forests, which cover more than 70% of the country, are the subject of a continent-wide debate on how to halve EU carbon emissions by 2030. Policymakers, environmentalists, companies and the public are arguing over whether the forests should remain untouched, and…
