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Jan 2, 2015
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Current account is key Africa factor in 2015

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By Martin Hutchinson

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

A positive balance of payments will be the key African success factor in 2015. Rapid growth is likely to continue. The IMF predicts 5.8 percent GDP growth for sub-Saharan Africa, up from 5.1 percent in 2014. However overspending, overborrowing and – in some countries – Ebola could cause trouble.

Dec 31, 2014
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Vienna offers a model for stable foreign policy

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By Martin Hutchinson

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

The 1815 Congress of Vienna, whose bicentenary occurs this winter, offers a useful historical lesson for crafting foreign policy strategies in an increasingly multipolar world. The summit ended the Napoleonic Wars, and its participants worked together over the next decade to prevent destabilizing regime change. This principle could have reversed many intervention decisions over the last 40 years. Adopting a variation of it now could bring stability.

Dec 29, 2014
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Bad ideas catching up with Latin America in 2015

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By Martin Hutchinson

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

Bad economic ideas will start to catch up with Latin America in 2015. For four years, the region has seen growth rates below the world average. The IMF predicts that won’t change any time soon. Yet while most Pacific-facing countries will shine, Brazil, Argentina and Venezuela will suffer. With a couple of exceptions, misguided policies are finally coming home to roost.

Dec 26, 2014
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Bitcoin’s defects will hasten its demise in 2015

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By Martin Hutchinson

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

Bitcoin’s defects will hasten its demise in 2015. 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. These flaws will cause its price to lose further altitude.

Dec 26, 2014

Breakingviews: Bitcoin’s defects will hasten its demise in 2015

By Martin Hutchinson

NEW YORK (Reuters Breakingviews) – Bitcoin’s defects will
hasten its demise in 2015. 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. These flaws will cause its price to lose further
altitude.

The digital currency is controlled not by a state but by an
underlying algorithm by which participants can “mine” bitcoins
through solving mathematical problems. The universe of miners
can then validate “blockchains” of bitcoin transactions by
majority vote, weighted by their mining effort. As a reward,
miners receive more bitcoins, distributed randomly.

Oct 24, 2014
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Review: World needs agreed ground rules for peace

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By Martin Hutchinson

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

Henry Kissinger argues in “World Order” that the world needs agreed ground rules as a precondition for achieving peace. The prevailing approach in the West, derived from the 1648 Treaty of Westphalia, of nation states with limited conflicts isn’t reflected in the traditions of emerging nations like China or India. However the 1814 Vienna Congress’s innovation of allowing intervention of great powers only to protect stability might work better.

Oct 1, 2014
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Ebola sets clock ticking on West African economy

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By Martin Hutchinson

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

The West African economy may yet survive Ebola – but the clock is ticking. Matching the last four years’ 28 pct growth isn’t realistic. Controlling the deadly outbreak before year’s end, though, could preserve enough investment and resources to meet an expanding population’s needs. Given the virus has already spread as far as America, there’s no time to waste.

Aug 27, 2014
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Tragedy may reshape Brazil economy, not just vote

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By Martin Hutchinson and Richard Beales

The authors are Breakingviews columnists. All opinions expressed are their own. 

Add Marina Silva to the challenges facing Dilma Rousseff. Brazil’s president faces a new opposition candidate in October’s election after Eduardo Campos’ death in a plane crash, and Silva looks a far bigger threat. If she ousts Rousseff, which polls show is possible, Brazil could gain economically from less state meddling.

Aug 26, 2014
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S&P 500 at 2,000 invites “new normal” thinking

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By Martin Hutchinson

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

Beware new paradigms. The S&P 500 Index’s first trades above 2,000 on Monday invite the idea of a new normal in markets. The price-to-earnings ratio is under 20, only moderately above average, and interest rates remain low. But U.S. earnings are at a peak relative to GDP. Assume they adjust back to the long-term norm, and the stock benchmark would be a third lower.

Jul 29, 2014
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Argentine opportunity cost is reason to cut deal

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By Martin Hutchinson

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

Argentina’s debt negotiators need to think about opportunity cost. A failure to reach agreement with holdout creditors by Wednesday might not make things immediately worse. But it would set back recent efforts to curry favor with international financiers – efforts that could pay off richly for the Argentine economy.

    • About Martin

      "Martin Hutchinson is a Reuters Breakingviews columnist and writes about emerging markets, particularly in Latin America, and monetary and macroeconomic issues. He is a former merchant/investment banker with 27 years of experience."
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