#AceFinanceNews New Federal Reserve chief Janet Yellen is expected to stick to the game plan when she chairs her first monetary policy meeting this week, further cutting back economic stimulus.
But, six weeks after inheriting Ben Bernanke’s mantle, she is also under the gun to make a pivot in the way the Fed has been signalling its intentions.
Handled well, that delicate shift in how the Fed foreshadows an eventual rate hike could assuage markets. But communicated badly, it could result in volatile movements and leave the new Fed chief on the back foot.
The first meeting under Yellen’s lead of the Federal Open Market Committee, on Tuesday and Wednesday, is expected to conclude that unusually harsh winter storms were mainly behind the slowdown in economic activity in December to February.
#AceFinanceNews BERLIN – E.ON Concern head Johannes Teyssen urged politicians to take a responsible position due to the crisis in Ukraine.
From 2007 E.ON Concern invested about six billion euro to develop business in Russia.
In an interview with Spiegel on Sunday, Tayssen said, “I don’t want to interfere into foreign political issues. I believe that in the last 10 years our policy in the East can be considered responsible.” “Trust-based relations between both countries and interrelations between our economies allowed over 6,000 German companies to operate in Russia,” the E.ON Concern head said, adding “Russian companies also operate in Germany.” “Cooperation between our countries made the situation on the continent peaceful. While cooperating with Russia we survived the Cold War, the war in Afghanistan,” he said. However, Teyssen said, “Business relations remain good. I believe that politicians should take a responsible position under the current circumstances.” Despite the crisis in Ukraine “I don’t see any threats to prevent the work of E.ON Concern in Russia. The Russian government pledged to guarantee stable framework conditions for private capital and investments and it kept its promise”, he said. Russia can use its energy resources as pressure on Europe, Teyssen said. “I can’t hear rumours on dependence. For more than 40 years Europe and Russia maintained energy partnership. Gas has never been used as a strategic weapon against the West.” Russia continues gas supplies and “it is a reliable gas partner”, Teyssen said. #AFN2014
National bankruptcy skeptics like to claim that while countries went bankrupt hundreds of years ago, such a catastrophe is out of the question in the modern world.
The story of Argentina’s bankruptcy in 2001 proves them wrong.
Most crises follow a common logic which is characterized by sudden onset, rapid growth, and the transition to a new quality and normalcy.
The difference between the Argentinean scenario from the usual canons laid in the absence of the normalization phase – crisis at the time were simply “preserved”, then to break out with renewed vigor.
The decline in GDP of 15%, unemployment at 24%, a default on its foreign liabilities of $ 141 billion, a decline in business activity, the removal of the hard peg to the US dollar and the subsequent devaluation of the Argentine peso by more than 70%. 13% cut in state pensions and civil servants’ salaries.
There was a run on banks following the collapse of the country’s national currency. Argentina’s citizens were so desperate and panicked that many spent nights sleeping in front of the ATMs. The systematic impoverishment of the population led to mass discontent and riots all over the country. Eventually, the situation became so chaotic that President Fernando de la Rúa fled from an enraged mob by helicopter. Despite all the protests and bank runs, the nation simply could not repay its $145 billion in foreign debts.
The country had a population of 35 million, of whom 19 million were classified poor as of this June, with earnings of less than $190 a month; 8.4 million were destitute, with monthly incomes below $83.
Left bankrupt by their government, their bankers and the International Monetary Fund, Argentines have lost faith in their political leadership. Five presidents passed through the Buenos Aires in the span of two weeks, until Nestor Kirchner, a provincial governor until then, assumed the presidency in 2003. Over the next few years he managed to pull the country out of the economic chaos, but evidently the bankruptcy never passes without a trace. Just last month Argentina announced its biggest currency devaluation in a decade, with the peso’s plunge rattling financial markets worldwide. With inflation running at about 30 percent, it seems the country is on the verge of yet another devastating collapse.
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These are not the opinions of the `Ace News Group ‘ and are the news and views of the writer.