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Forbes: Yes, this is a currency war, as China buys dollars

The renminbi fell slightly against the dollar in China on Friday.  The yuan, as the currency is informally known, began the day up over the greenback but weakened as trading progressed. The reason for the afternoon decline?  Chinese enterprises entered the market and bought the American currency in large amounts late in the day.  “It just seems so…

Washington’s dilemma on a ‘lost’ planet- Noam Chomsky

Washington’s dilemma on a ‘lost’ planet By Noam Chomsky [This piece is adapted from “Uprisings,” a chapter in Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to US Empire, Noam Chomsky’s new interview book with David Barsamian (with thanks to the publisher, Metropolitan Books). The questions are Barsamian’s, the answers Chomsky’s.] David…

Primary dealers and economists see government spending cuts in March

NEW YORK (Reuters) – Economists at many of Wall Street’s top financial institutions do not expect the government to complete a deal to fully avoid automatic cuts in federal spending before a March 1 deadline, according to a Reuters poll conducted on Friday. Economists at 11 of 13 primary dealers – the 21 large financial…

An Economic Head Fake?

Six Reasons to Discount the G.D.P. Shocker

At 8:30 Wednesday morning, the Commerce Department announced that “real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 0.1 percent in the fourth quarter of 2012.”

Like most economists and pundits, I was expecting the growth number to come in at somewhere between one per cent and three per cent—and that’s up, not down.

When you get things wrong, there is an obvious temptation to dismiss the outcome as a meaningless fluke. On Twitter and elsewhere, there was a lot of that going on this morning after the report came out. I tried to resist joining the crowd.

Reading through the report, and the accompanying historical comparisons, I looked for reasons why this could be the harbinger of a lasting downturn in the economy. But I couldn’t find any persuasive ones. Instead, I found at least six reasons why this shocking report does look like a one-off…..

Read more: http://www.newyorker…l#ixzz2JYzq2Eq9