If you’d read the news frequently, economist often use key words such as “Bond yields” and “interest rates” as an economic indicator. At first glance, it could be hard to comprehend why these indicators are used to gauge the performance of the economy. In this article I will endeavor to explain the intricacies of such…
When President Xi Jinping assumed the role as president of the People’s Republic of China on March 2013, he vowed to transform China’s corrupted situation. At that point many people doubted his conviction to change China. To date, it seemed like Mr Xi is one step closer to his objective. From the period when Mr…
On the 22nd of January 2015, the European Central Bank (ECB) launched a massive government bond-buying program which will inject hundreds of billions in new money into the euro zone economy. The ECB said that the purchasing of sovereign debt will last about a year and a half from March onwards, till the end of…
When the market closed on 9th Jan, the crude oil ended with a price of USD $48.36. This was almost 50% its value from a year ago in Jan 2014. Before taking an attempt to reason out the cause for such a plunge in its price, it is important to understand that there was no…
Many countries around the world avoided free market capitalism due to many reasons one of which is that it leads to wealth inequality. Is it really that case? Well, the truth is, where there is wealth, there is inequality. Inequality is a real problem and it cannot be eliminated. A society that puts equality before…
What about the operations of the Federal Reserve System? In this day and age, the actual notes and coins circulating in the economy represent only a tiny portion of the money in existence. In actual fact, majority of the money supply is created by private banks as loans that are payable back to the banks…
Many of us are probably familiar with the term “Quantitative Easing” by now but what about the institution behind it? Before I dive into the system of the Federal Reserve, I would like to discuss about the history behind the Federal Reserve Act. The Federal Reserve Act was supposedly signed into law to prevent
A glance at Europe’s economy and you might tell that it isn’t exactly doing very well. The European Union (EU) recorded a trade deficit of 8900 EUR million in August 2014 compared to a trade surplus of 1600 EUR million in July 2014. At different parts of Europe, Germany industrial production has decreased, while Italy…
Roughly 3 months after the 2008 housing market crash, Chairman of the Federal Reserve then, Ben Bernanke, unveiled a stimulus programme also known as the Quantitative Easing (QE) to help stimulate the economy. According to Bernanke, the objective was to keep interest rate low so that home prices would go up. And the increase in…
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