Prieur’s readings (December 4, 2009)

By Prieur du Plessis, on December 4th, 2009 posted in: Investment, Markets, Money

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Ambrose Evans-Pritchard (Telegraph): China wary of gold “bubble” danger after quietly doubling its reserve, December 2, 2009.
The Chinese authorities have given the clearest indication to date that they view the surge in gold to an all-time high of $1,217 an ounce as a speculative frenzy.

• Mish Shedlock (Mish’s Global Economic Trend Analyysis: Senator Bunning to Bernanke “You are the definition of a moral hazard. Your Fed has become the Creature From Jekyll Island“, December 3, 2009.

• James MacGee (Federal Reserve Bank of Cleveland): Why didn’t Canada’s housing market go bust?
Housing markets in the United States and Canada are similar in many respects, but each has fared quite differently since the onset of the financial crisis. A comparison of the two markets suggests that relaxed lending standards likely played a critical role in the US housing bust. The Canada-US comparison suggests the low interest rate policy of the central banks in both countries contributed to the housing boom over 2001-2006 and that a relaxation of lending standards in the US was the critical factor in setting the stage for the housing bust.

• James Purnell and Graeme Cooke (Financial Times): Every one of us should be guaranteed a job, December 3, 2009.
The lesson from the recession of the past year is that investing to prevent long-term unemployment is not just socially just, it reduces the deficit. So as the recovery starts, this approach should be extended.

• Nomi Prins (The Daily Beast): Worse than Enron? December 1, 2009.
Wall Street’s big banks are playing dangerous new accounting games – and this time taxpayers are on the hook for hundreds of billions. Nomi Prins uncovers a scandal in the making.

• Nouriel Roubini (Forbes): Lessons from Dubai World, December 3, 2009.
Don’t assume government backing for state-owned businesses.

• James Lamont Geoff Dyer (Financial Times): China eyes industrial bases in Africa, December 3, 2009.
The World Bank and Beijing are in discussions about setting up low-cost factories in new industrial zones in Africa to help the continent develop a manufacturing base and reverse its declining share in global trade.

• Ambrose Evans-Pritchard (Telegraph): Angela Merkel alarmed by worsening credit crisis, November 30, 2009.
The German government is rushing through a fresh package of measures to shore up ailing banks and prevent a second wave of the debt crisis suffocating large parts of manufacturing industry.

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