This type of geopolitical conspiracy would be easy to dismiss from any other source, but speculation of an imminent de-dollarization by some of the world’s largest oil consumers is even more chilling when it’s penned by one of Britain’s most celebrated international journalists…

Exploring the recent economic “upheaval” through the lens of history helps in at least two ways: 1) it assures us that humanity has faced similar dangers in the past and somehow lived to tell the tale, and 2) it suggests that the same entrepreneurial instincts that led us into trouble (yet again) also hold the key to restoring stability and growth. This speech by the President of the World Bank highlights a series of events that presaged the crisis — like the “emergence” of emerging economies, the popularity of leveraged finance, and growing imbalances of trade — focusing less on the outcome and more on the decades of unbridled expansion that inspired it…

Contagion could be used to describe much of the activity in the capital markets over the last 40 years, as global financial flows have accelerated, trade and capital barriers have disappeared, regulatory oversight has diminished, and financial innovation has made the packaging and sale of securities as easy as ordering a Big Mac combo. From defaults on recycled petrodollars in the early 1980s, to the Mexican peso crisis in 1994, to the “Asian Contagion” in 1997-98, and most recently the Great Collapse of 2008, what began as sanity checks on asset values and risk metrics quickly evolved into stampedes of herding capital feeling to higher ground.

This counter-factual analysis of China’s path toward capitalism reveals that the country’s biggest cities aren’t necessarily the engines of dynamic Asian progress that modern commentators have suggested, and that the country’s future may lie in rural areas where entrepreneurship and competition have thrived since Deng Xiaoping’s Four Modernizations…

As Canadians flock to the polls later this month, quietly supplying 22% of America’s oil and 13% of its natural gas, its neighbours to the south have barely noticed. Cross-border oil flows are inevitable – given that America controls of a mere 2% of the world’s reserves and consumes almost 25% of supply – and securing its long-term petroleum assumes the full participation of Alberta’s carbon-rich tar sands and the off-shore bounty at Hibernia. Even Governor Palin’s Wildlife Reserve is virtually useless without passage by pipe across Canada’s Western provinces. Given the importance of “Securing America’s Energy Future” during a twin election year, it’s surprising that talk hasn’t returned to NAFTA, cleaner energy, or agricultural subsidies. Then again, maybe it isn’t…

…

Keynesian reflections from 1919 on the first era of true globalization, complete with bountiful trade, unparalleled upward mobility, liquid labor markets, secure international travel, and a blissful ignorance of the fragility of this new 20th Century World Order…

What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least…

Further commentary on the interconnected themes of income disparity, agricultural inflation, and selective de-globalization, this time by Nobel Prize-winning economist Amartya Sen. Perhaps most compelling is the charge that a rising tide doesn’t lift all ships, and those who have benefited least from a “flattening” of our economic superstructure are often the most exposed to rising prices and shifting patterns of supply and demand. Also of note is the graphic artist chosen to visualize our scramble for scarce natural resources, yet another gifted Walrus alum…

Assuming that the United States decides to impose a $25 per barrel tariff on all imported oil (crude and product) – and Canada and Mexico were not exempt — let’s explore how this might affect:

a. The volume of oil imported into the United States?

Volume responses to a $25 tariff would vary over time. In the near-term, there would only be a negligible decrease in the volume of oil imported (given a low short-run elasticity of energy demand) as industries, supply chains, and consumers remain highly dependent on existing petroleum infrastructure. The redistribution of the tariff (with tax reductions) would partially offset the incremental cost to businesses and consumers, but the policy is unlikely to completely offset the macroeconomic effects of a…

An excerpt from the mid-term “problem set” in ENR-302…

3. The country of Xanadu is dependent of the use of domestically produced methanol for 100% of its energy needs. The price of methanol is set by a competitive market and the fuel is priced at $2.50 per gallon. Two large companies supply 80% of the market and each has costs of $1.50 per gallon. The opposition party and most of the national labor unions argue that these two companies are making obscene profits. They demand that the President place a mandatory price cap of $2.00 on the price of methanol to prevent “this abuse of market power.”

Assume that the elasticity of demand is 0.4 and the elasticity of supply is 0.8.…

An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the rise of the corporation as a key variable in the calculus of global peace and security…

In this recent Times OpEd, Rochester economics professor Steve Landsburg points out how easily John Q. Public overlooks cause and effect in 21st century markets.

Let’s review: 1) goods and services require labor and capital to produce; 2) the price of labor and capital impact an item’s ultimate price; 3) factors of production are much less expensive in the developing world; 4) a decades-long public war on inflation in the developed world has prevented the price of goods from increasing in step with wages; however, 5) wage growth is now slowing and inflation has reached a 17-year high; thus 6) in their quest to find the lowest price, consumers who rebel against off-shoring jobs are simply biting the hand that feeds them,…

This paper was written for quite possibly the best combination of professor and class I’ve ever experienced. If only all academic endeavor challenged so profoundly, surveyed so broadly, and bore as much intellectual fruit…

Hegemonic Stability and the Rise of Global Corporations
by Devin DeCiantis

“The logic of markets is borderless,
but the logic of politics remains bounded.”
- Louis W. Pauley, Who Elected the Bankers? Surveillance and Control in the World Economy, 1997

“Know thyself, know thy enemy. A thousand battles, a thousand victories.” In the case of Iran and the U.S., Sun Tzu’s prescient advice — combined with the thorough research of “your correspondent” — suggest that peace might be an easier wager than recent history predicts. With their popularity on the wane, like-minded conservatives in their ranks, and religious ideology on their side, Bush and Ahmadinejad have more in common today than either care to admit…

Once the white gold of the natural resource world, catalyst of Caribbean war, and provider of luxurious European consumption, sugar still has its hold over American protectionist policy in some embarrassingly predictable ways…

With great power may come great responsibility, but middle power certainly has its role to play policing the economic and political bulge. In this address at the CFR, Canada’s Prime Minister waxes idealistically about the challenges of a national resource bounty that rivals any in the world, a mixed ethnic heritage that is the model for progressive integration, and a desire to project Canadian sovereignty and foreign policy into the 21st century…

Spending taxpayers money on a massive military offensive has its own unique economic consequences, but borrowing money from abroad to finance sustained hostilities half-way around the world places the American executive in a vulnerable position vis-a-vis the international community. This moderated conversation, featuring Robert Hormats — currently Vice Chairman at Goldman Sachs International and a former Assistant Secretary of State, member of the National Security Council, and US Trade Ambassador — touches on the myriad economic and political challenges that emerge when war is funded by outsiders while policy projects from within…

As politicians and investors cast their enthusiastic support behind the legislation and technology necessary to christen the “New Age of Ethanol”, consensus among the world’s leading scientists is still critical at best. From hungry Mexicans to enraged environmentalists to ruffled foreign dignitaries, the real cost of ethanol has become increasingly obvious to all but the most cynical energy hucksters. Fueled by agricultural protectionism and the pressing drive for “energy independence”, the Ethanol Lobby is now humming on all cylinders, and if Runge and Senauer are right, that might spell disaster far beyond the pumps…

Recent reports have pegged open interest in the world’s largest IPO at nearly US$400 billion. That’s a lot of capital ready to speculate on a still unproven Chinese macroeconomy, particularly in the face of its ongoing structural woes. Could this be the end of the beginning for capitalism in China? Or perhaps the beginning of the end…

The Enduring Allure of China
by Peter Zeihan, Stratfor.com

The Industrial and Commercial Bank of China (ICBC) is expected to raise nearly $22 billion in an initial public offering (IPO) — the largest in history — after shares are made available to retail investors Oct. 27. The ICBC offering is the latest in a series of IPOs involving Chinese banks, into which Western investment firms have poured billions since…

A Nationalist Manifesto

There are too many elephants in the room. During our teens it was understandable, but this country is almost 140 years old. It’s time to stop ignoring the obvious. The 21st century might be filled with promise, but not if we don’t change course.

As it stands, we are far too dependant on natural resources, and they’re far too dependant on us. Our Prime Minister, under a majority mandate, is essentially a dictator. Our immigrants are both our biggest asset and our biggest liability. China is real. So is Afghanistan. We spend nearly $150 billion a year on a crippled healthcare system and throwing more money at the problem will not make it work. Our best and brightest are quick to jump ship. Canada’s GDP…

Morgan Stanley’s chief global economist adds his voice to the growing choir of doomsayers, predicting heartbreak for employees and consumers throughout the high-cost, developed world. His thesis is simple: growth in the world economy has come not from soaring wages but from bubbalicious home prices, soaring corporate profits, American consumerism and low-cost third-world labour. As jobs continue to stream offshore and the markets pray for a “soft landing”, recession may be the only tune this chorus is willing to sing…