At least some countries are recognizing the inflation threat. India raised rates by an unexpected 50 bps. Sensex index is down 1.5%, and looks ugly. Remember, India and China are supposed to lead the world forward. Us with below 2% GDP growth after a huge recession, will hardly drive the economy forward.
“But inflation in India remains stubbornly high. While supply-side bottlenecks, including in food production, are beyond the scope of monetary policy, inflation pressures have become more generalized.
“Inflation has consistently surprised on the upside and there is little choice but for the central bank to send a strong tightening signal/anti-inflation stance as they have done,” said Ramya Suryanarayanan, economist at DBS Bank in Singapore.
“We expect a stand pat at the next meeting and then another 50 bps hike at the policy meeting in July, though it is also possible there is a 25 bps hike at the next meeting and another 25 bps hike at the July meeting.”
Food price inflation of more than 9 percent and fuel price inflation in double digits have added pressure on a Congress party-led government already reeling from a spate of corruption scandals.” (Bloomberg)
Bombing countries and killing individuals to democracy and peace is usually not the way forward.
“Moderate, tolerant and even some secular groups exist, but they often do not have a comprehensive alternative vision, know how to communicate it or have the organizational skills to promote it. American and European experts can assist them in building politically viable organizations, but to succeed these new groups must be homegrown and tap into the Arab and Islamic traditions that speak to many Muslim youth.
Moreover, without investment to create jobs, new governments in these countries will fail under the weight of youth unemployment. Unless corruption is replaced with efficiency, investment will either not materialize or be wasted.
Without alternative movements with vision, appeal, and the ability to deliver change, existing organized extremist groups will fill the void. And despite his death, Bin Laden’s goal may yet be achieved.” (NYT)
“There isn’t much sign of the bond markets turning on France yet. The country can still borrow on similar terms to Germany. And there is still time to turn things around. A reduction in the deficit this year or next would make things look better.
But it is hard to believe that the euro crisis will end with the bailout of Portugal. Other countries are going to get caught in the crossfire. When you look around for the next candidate, France has what it takes to be the next blowup.”(Bloomberg)