Ian's Feed
Apr 20, 2011
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Gold as an each-way bet is fantasy

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — Worried about the euro zone? Buy gold. Worried about the U.S. deficit? Buy gold. Fancy a quick speculative punt? Well, you can’t lose with gold…or silver, which has almost trebled in price in just over six months. But precious metals can’t be both safe havens and speculative plays. And with equity markets rightly signalling global recovery and higher interest rates, these speculative bubbles are set to be pricked before long.

Apr 15, 2011
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Overheating China threatens global inflation

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Ian Campbell

China’s overheating may soon be the world’s problem. Data released on April 14 showed GDP rising at 9.7 percent in the first quarter, and consumer prices running at a too-fast 5.4 percent. The concern isn’t just that Chinese policy may tighten and growth slow. It is that spiraling Chinese wages, rising inflation and a yuan that needs to rise faster could create a source of global inflation.

Mar 23, 2011
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UK budget deserves 6 out of 10

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — George Osborne’s budget deserves 6 out of 10. Faced with a still-daunting fiscal challenge, the UK Chancellor has turned his attention to the factors that will shape the economy’s future. Businesses will welcome lower corporate taxes and the removal of obstacles to healthy, more balanced growth. Populist fiddles, such as raiding oil companies to help cap fuel costs, tarnish Osborne’s message. Nevertheless, his medicine should boost Britain’s growth — though not for a few years.

Mar 11, 2011
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Tragic quake may add to inflation pressures

The full economic impact of the sixth most powerful earthquake ever recorded is not yet known. Many hundreds of lives have been reported lost in Japan. Aftershocks are a danger and other nations fear a tsunami running across the Pacific will spread the damage more widely. Though uncertainty is rife, the earthquake is more likely to add to global growth and attendant inflationary pressures than subtract from them. It also raises concerns about Japan’s long-running fiscal dangers.

The earthquake struck close to a relatively sparsely populated area of Japan. In contrast, the Kobe earthquake in January 1995 struck one of the most populated and industrialized regions, killing 6,434 people and causing damage estimated at around $100 billion. The current quake will leave a large reconstruction bill — but, on current indications, a smaller one than for Kobe.

Mar 8, 2011
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Greek anger at downgrade reflects enormity of task

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — It’s hard not to sympathise with Greece following Moody’s latest downgrade of the country. Like Sisyphus, the government has been pushing a heavy rock uphill. It has got somewhere, as Athens asserts. The fiscal deficit is 6 percentage points of GDP lower than it was. But the debt burden will probably prove too heavy and roll Greece back down into a crisis. The market quite rightly views a restructuring as highly likely. But while that would fix Greece’s debt problem, it would not in itself solve the country’s competitiveness and growth challenges.

Feb 24, 2011
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Prolonged oil shock threatens global growth

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Ian Campbell

LONDON — Oil still lubricates the global economy and could make it seize up. Prices above $110 a barrel raise the spectre of previous shocks. Judged by fundamental supply and demand, there is no reason for prices to remain so high. But a sustained spike would be a big problem for the global economy.

Feb 18, 2011
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G20 can’t control commodities — but rates would

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — Nicolas Sarkozy thinks he has radical ideas for the G20 to address volatile commodity prices, stopping just short of guillotining traders. A world burdened by inflation in oil, other commodities and food may share his frustration. The president hopes the French and other Europeans will, too. But dividing the world’s commodity trades between the “commercial” and the “speculative” ones isn’t easy. This means G20 finance ministers may realise little in their discussion on the matter — even though Sarkozy is right that speculation in commodities is part of the price problem.

Feb 15, 2011
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Five reasons why UK rates should be kept on hold

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — What is the Bank of England doing? Inflation at 4 percent in January is double its target. Mervyn King, the bank’s Governor, is under fire.

Feb 7, 2011
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Tightening needed in unstable, but growing, world

By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — The stagflationists are losing the argument. The world is inflating and that is indeed a worry. But inflation is coming from growth that seems increasingly strong and from money that is looking far too loose for a reviving world. The risk is that oil and other commodities soar much higher now, as they did in 2008, only this time the spike may not recede quickly.

Jan 27, 2011

Japan downgrade has global resonance

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Ian Campbell

LONDON (Reuters Breakingviews) – A cut to Japan ‘s credit rating may not seem to mean much when the country already appears to live in a world of its own. But if Japan can be downgraded, so can Italy, and so can the United States. Standard & Poor’s downward revision of the country is rightly reverberating globally as well as kicking the yen.