Impossible trinity gives China a difficult choice

August 26, 2015

Not even the People’s Republic can go on cutting interest rates, keep the yuan stable, and allow capital to flow freely. It must choose two out of three. Huge foreign exchange reserves give Beijing some room to muddle through, but not enough to reverse self-fulfilling outflows.

China index: Economy springs back, for now

April 13, 2015

Breakingviews’ alternative gauge of activity recovered slightly in February to its highest level since last spring. Chinese New Year celebrations and a bump in exports gave the economy a temporary boost to offset falling steel production, rail freight volumes and truck sales.

Review: Art market’s old vices go global

February 13, 2015

Georgina Adam’s “Big Bucks” explores how contemporary art, buoyed by billionaires’ cash, has exploded as an asset class. The financial shenanigans are breathtaking but there were plenty in, say, the 1920s, another era of the super-rich. But today, the whole world is joining in.

Bitcoin’s defects will hasten its demise in 2015

December 26, 2014

The leading crypto-currency’s economies of scale in mining and its transaction system’s vulnerability to subversion by a dominant miner make it unsound. As seignorage declines it will become cost-uncompetitive for transactions. Flaws may cause its price to lose further altitude.

Cheap money wrong cure for West’s long-term stasis

December 6, 2013

Larry Summers seems to think years of negative real interest rates can end “secular stagnation”. That’s too optimistic. If the torpor is demographic and technological, it’s probably incurable. In that case, more money-printing will only bring new financial messes.

Whole FX business belongs in the dock

February 18, 2014

Some traders may have committed malpractice in the gigantic foreign exchange market, but the currency business itself has the hallmarks of an economic crime. It is much too big to serve any useful purpose. Its volatility is destabilising. And FX hedges are mostly pointless.

Review: Why all you know about money is wrong

March 7, 2014

Felix Martin says that money isn’t a commodity, but a system of credits. This insight allows his book to rewrite monetary history in an eye-opening way. It also suggests that the way economists approach finance and recessions is hopelessly wrong.