Kwacha in the sights of forex traders?

Malawi’s central bank has decided to keep lending rates at 25%.

Good yield.  Should we be looking at the kwacha?

Australian austerity promises to bite the far future elderly

The Australian government is proposing to raise the retirement age for everyone born after 1965 to 70 years.  This is due to budget problems arising from the collapse of mining investment in the country.  $15 charges for doctors visits are being considered.  (Australia is the only country in the world where health costs/capita are as high as in the US.)  Even worse, MPs’ special cards that entitle them to free plane travel may be restricted.

Australia is a trend-setter.  Expect New Zealand to follow suit.

The Russo-German Axis?

Gerhard Shröder, Merkel’s predecessor as chancellor, celebrated his 70^th birthday in St. Petersburg on Tuesday.   President Putin gave him a big hug.  The German ambassador was also there, and Merkel’s party’s foreign policy spokesman joined in the jollity and fun.  Back in Berlin, Foreign Minister Steinmeir is said to be supportive of the Russian position on Ukraine.  Anti-Americanism in the German population, exacerbated by the NSA spying scandal, is being further intensified by the Ukraine crisis.

Europeans don’t see why the US is making such a big thing about Ukraine, which they view as in the Russian sphere of influence.

Is a German-Russian axis developing?

The city versus the countryside in Turkey

Riots in Europe’s largest city: Police in Istanbul (40,000 of them) blocked labor union May Day marchers from approaching the city center. Police used tear gas and water cannons. The same occurred in several other Turkish cities. Freedom House in Washington has downgraded Turkish media from “partly free” to “not free.”

Like in Thailand, this is a struggle between the majority in the pious countryside, who support the government, and the libertine city dwellers, who do not. The second law of thermodynamics suggests that the libertines will ultimately win.

Can't China take the pressure?

The World Bank’s “International Comparison Program” has recalculated purchasing power parity in such a way as to increase China’s GDP so that it will be the world’s largest economy by the end of this year. China has opposed this recalculation and “does not endorse the results as official statistics.” China fought for a year to prevent the release of this “data.”

China does not want to assume a global leadership position and does not feel itself ready to in any case. The same was true of the US in 1872 when it became the world’s largest economy.
Can’t China take the pressure?

The Chinese yuan progress rapidly to reserve status

The Chinese yuan progresses rapidly to the status of a reserve currency. Today it is the 7^th most used currency in the world, up from 13^th in 2012.  18% of China’s trade is now settled in Yuan, but this is expect to rise to 30% next year. 

The major barrier to reserve currency status is currency controls.  When will China enact full convertibility?  That would be the end of the US dollar’s quasi-exclusive reserve status. 

Will democracy come to Thailand: The Yellow Shirts say, "No!."

Tensions rise in Thailand:  Rural people (red shirts) support the ruling Pheu Thai party, which has won five successive elections.  The urban elites have never accepted this and their Democrat Party (yellow shirts) are pushing for a judicial or violent overthrow of the red shirts.  Meanwhile, the red shirts are forming militias in the countryside.

Food prices are rising, as is discontent. Is civil war a possibility?  Yet another military coup?  The red shirt militias are a new element.  In the past, the military would simply ask the King for permission to stage a coup and no one would oppose them.