
In its "Global Economic Prospects" report for January 2013 the World Bank has some very interesting figures on the extent to which the hunt for yield in developed markets is opening up the capital markets to even the third tier of developing countries. One has to wonder, with the catastrophic consequences of the last major hunt for yield still vivid in the mind, if this is the start of another binge party that is going to end in tears.

As the European Union mulls another year of economic stagnation and the United States a year of lackluster and uncertain economic recovery, will emerging markets take the lead in global economic recovery?

The phrase "currency war" is undoubtedly an emotive one and the G20 at its February 17th/18th meeting, along with IMF chief Christine Lagrange and the European Central Bank president Mario Draghi, has been doing its best to wrestle this particular bone away from the media and to portray the wild swings in the FX markets seen over the last months as merely the result of domestic governments pursuing domestic issues, no war at all, in fact.

Opponents of austerity have no reason to love a couple of high powered economists who seem to be on a mission to convince senior politicians everywhere that too much debt is seriously bad for a country's prospects. The economists in question are MIT's Carmen Reinhart and her "partner in crime", Ken Rogoff, a former chief economist with the International Monetary Fund. Their mission, for some years now, has been to stiffen political resolve to cut debt.

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The funeral of former British PM Margaret Thatcher saw a nation divided in hatred and love for one of the most iconic world leaders of modern times. While, Inner London today is one of the richest parts of the entire European Union, in the North of England there are towns still with persistently high levels of unemployment due to Thatcher’s past policies.

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In his last speech as Governor of the Bank of Japan, Masaaki Shirakawa gave a detailed account of what is required to strengthen growth in Japan - a problem that has plagued both politicians and central bankers for two decades.

In a fascinating speech Duvvuri Subbarao, the Governor of the Reserve Bank of India (RBI) talked about the RBI's perspective on the macro economic challenges facing India. First and foremost, there is the fact that where India was averaging 9.5% growth in the three years leading up to the 2008 global financial crisis, today the country faces sharply decelerating growth, high and stubborn inflation and falling investment.

Bank of Japan securities purchases of ¥52 trillion in 2013 are equivalent to 4.6% of the M3 broad money supply measure. Central bank bond purchases have a direct impact on broad money only if securities are purchased from domestic non-banks – their bank deposits swell as the transaction is settled.
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