This week’s Premium Global Market Summary goes into great detail on what the markets have told us, discusses interest rates, and we provide an analysis of gold.
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Europe: Lagarde Delivers a Scolding to the “Laggards”
At the annual meeting of the International Monetary Fund, director Christine Lagarde divided the world’s economies into three groups. First are the developing economies — those still growing fast enough to be the “engines” of world growth. Second are those whose recoveries from the Great Recession are getting stronger, such as the U.S. (and we might add, hopefully, Japan). And third are those who are making everything worse for everybody by not being in groups one or two.
The blame there fell on Europe’s large economies — the U.K., France, Germany, and Italy. And the chief cause suggested for their status as global “laggards” is intemperate and overly stringent fiscal consolidation: i.e., austerity. Lagarde called for policies that would do “anything that works” to create jobs…
Wolfgang Schäuble and Christine Lagarde — Matter and Antimatter?
Source: New York Times
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Germany’s Miracle: Thank Gerhard Schröder
The figure below shows the solution to European malaise that Angela Merkel would like to convey to Europe’s other leaders. She loves to talk about competitiveness, and in a way, this is a graph showing it: the change in unit labor costs for major European economies and the United States over the past decade. “Unit labor costs” represent the cost of labor for a given unit of economic output.
Source: The Economist
In 2003, faced by the economic shock of reunification and the exodus of small- and medium-sized German middlesized firms to find cheaper labor in Eastern Europe, the German government enacted a painful package of labor reforms — the Hartz reforms. They were unpopular enough to get Chancellor Gerhard Schröder booted out of office in 2005. Thanks largely to these reforms, Germany’s unit labor costs have grown more slowly than those of the U.S., and much more slowly than those of other European economies — although Spain has shown real improvement since the crisis hit in 2009…
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More Oil to be Available Worldwide: New Report Updates World Shale Reserve Estimates
This month the Energy Information Agency (EIA) published an update to its 2011 assessment of shale oil and gas resources in 41 countries outside the United States. After just two years, there was enough new data to warrant a new report; this is a field where information is scarce and subject to sometimes radical revision on the basis of new discoveries.
Location of World Shale Reserves
Source: Energy Information Agency
The current report adds about 11 percent to global technically recoverable shale oil reserves, and about 47 percent to global technically recoverable shale gas reserves.
Find out the top ten countries by shale oil reserves
Find out the top ten countries by shale gas reserves
Is this bullish for the U.S.?
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Guild Basic Needs IndexTM
In this week’s Premium Global Market Commentary available to Gold Subscribers, we feature:
- Mexico’s President Pushes Closer to Oil Reform
What does this mean for Mexico?
- We Believe that U.S. Immigration Will Fuel Economic Growth: CBO Says 16 Million More Consumers and Savers Means More Demand and More Growth
What does this mean for the U.S.?
- Guild’s Premium Global Market Summary
We provide commentary on some global markets. What happened in 2010? What happened in 2011? What happened in 2012? What is happening today?
What about interest rates?
Gold? We discuss the positives, the background, and the negatives.
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