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	<title>Business &#38; MoneyCategory: Currency &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>Viewpoint: Ben Bernanke, Enabler of America&#8217;s Fiscal Dysfunction</title>
		<link>http://business.time.com/2013/05/08/viewpoint-ben-bernanke-enabler-of-americas-fiscal-dysfunction/</link>
		<comments>http://business.time.com/2013/05/08/viewpoint-ben-bernanke-enabler-of-americas-fiscal-dysfunction/#comments</comments>
		<pubDate>Wed, 08 May 2013 09:45:34 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Banking]]></category>
		<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=79402</guid>
		<description><![CDATA[Federal Reserve chairman Ben Bernanke doesn’t get much respect. PIMCO’s Bill Gross, who oversees some of the country’s biggest bond portfolios, has warned that Bernanke risks rousing inflationary dragons.  NYU professor Nouriel Roubini, who correctly anticipated the 2008 financial crisis, has argued that Bernanke’s policies are failing to help the economy and are instead fueling a stock market bubble that will end in a financial crisis. Even experts who are sympathetic have been cutting at times. New York Times columnist Paul Krugman has acknowledged that the Fed chairman is a fine economist.  But his long-running disputes with Bernanke – known in some quarters as the Battle of the Beards – have included charges that Bernanke was assimilated by the Fed Borg, a reference to Star Trek’s collective alien intelligence that overwhelms individuality and personal will. Renowned investor and business magnate Warren Buffett has described Bernanke as &#8220;a gutsy guy,&#8221; but he has also criticized the Fed&#8217;s policies as brutal toward retirees, who depend on interest payments from their investments. Indeed, Bernanke himself acknowledged as much in a 2011 press conference: &#8221;We are quite aware that very low interest rates, particularly for a protracted period, do have costs for a lot of people. They have costs for savers. We have complaints from banks that their net interest margins are affected by low interest rates. Pension funds will be affected if low interest rates for a protracted period require them to make larger contributions. So we are aware of those concerns, and we take them very seriously. I think the response is, though, that there is a greater good here, which is the health and recovery of the U.S. economy.&#8221; (MORE: How Silicon Valley is Hollowing out the Economy) It’s understandable that a public official would feel obliged to do whatever is best for the country at any given moment. If the lack of sound long-term fiscal policies is holding back growth, then up to a point the Fed can justify pumping large quantities of money into the banking system as additional stimulus. But there is a limit. In the long run, excessive money creation may engender<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79402&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://business.time.com/category/economy-policy/federal-reserve-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/05/162795895.jpg?w=240</featured_image>
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			<media:title type="html">Ben S. Bernanke, chairman of the U.S. Federal Reserve, during a House Financial Services Committee hearing in Washington, D.C., on Feb. 27, 2013.</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Europeans Are Thinking the Unthinkable: That Debt Defaults Might Make Sense</title>
		<link>http://business.time.com/2013/04/23/europeans-are-thinking-the-unthinkable-that-debt-defaults-might-make-sense/</link>
		<comments>http://business.time.com/2013/04/23/europeans-are-thinking-the-unthinkable-that-debt-defaults-might-make-sense/#comments</comments>
		<pubDate>Tue, 23 Apr 2013 07:00:01 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Banking]]></category>
		<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=78185</guid>
		<description><![CDATA[The euro-zone crisis has slipped off the radar screen during the past couple of weeks as gun control and the Boston bombers have dominated U.S. news. But none of the euro zone’s problems have gone away. Political crises beset France, Italy and Spain. Smaller countries, from Portugal to Cyprus, face even more pressing financial troubles. Germany grows less and less willing to foot the bill for bailouts. And for the first time, serious public figures in Europe have begun openly discussing the pros and cons of allowing countries to default on their national debt. There is, in fact, a historical case for tolerating default. Argentina suffered a financial crisis in 1999 that led to a period of high unemployment. Over the next several years, it became harder and harder to maintain the value of currency. In 2002, the country defaulted on more than $100 billion in debt. Inflation soared, and workers&#8217; purchasing power plummeted. Savers lost a big chunk of their money. But a year later, growth bounced back to an 8% to 9% annual rate, and wages rose even faster. The same issues arose during the 2008 banking crisis. Ireland bailed out its banks, while Iceland couldn’t afford to and allowed a partial default. The results were that Ireland had no inflation, but unemployment topped 14% as growth ground almost to a halt. By contrast, in Iceland the currency lost almost half its value and inflation reached 5.4%. However, economic growth picked up slightly and unemployment didn’t rise much above 6%. (MORE: Why the Case for Austerity Took a Big Hit) In all these cases, policymakers had to choose whether working people or financial interests should be the ones to suffer most during a serious economic crisis. Default hurt affluent savers and financial institutions, but proved to be better for ordinary workers over the long term. What is happening now in Europe is that populations are resisting further austerity. In response, politicians and technocrats are beginning to question whether default might ultimately be less painful than doing what will be required to keep<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78185&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/biz-euro-default-130422.jpg?w=240</featured_image>
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			<media:title type="html">A man walks past a closed down business in Madrid</media:title>
		</media:content>

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			<media:title type="html">michaelsivy</media:title>
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		<title>The Real Significance of the Bitcoin Boom (and Bust)</title>
		<link>http://business.time.com/2013/04/12/the-real-significance-of-the-bitcoin-boom-and-bust/</link>
		<comments>http://business.time.com/2013/04/12/the-real-significance-of-the-bitcoin-boom-and-bust/#comments</comments>
		<pubDate>Fri, 12 Apr 2013 09:45:40 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[E-commerce]]></category>
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		<category><![CDATA[Financial Privacy]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=77371</guid>
		<description><![CDATA[The volatile rise-and-fall of Bitcoin has prompted lots of stories explaining why the online virtual currency is a classic bubble. Many compare it to tulip mania in 17th century Holland, where prices of rare tulip bulbs soared to absurd heights and then crashed, ruining the speculative investors who had bought them. But the Bitcoin phenomenon is more than a bubble. It says something important about the current and future state of the global economy. The scale of the recent boom-and-bust has been staggering indeed. At the start of the year, a Bitcoin was worth $13.51. Earlier this week, it traded as high as $266. And on Thursday, it plummeted to less than $100, as one of the exchanges where Bitcoins are traded closed temporarily. This would be comparable to the exchange rate for the British pound soaring from $1.62 (where it was on Jan. 1) to $31.90 and then falling back to $12. Such monumental appreciation and volatility are clearly the result of speculation — people buying the online currency just because they think its value will rise, not because they want to use it to purchase goods and services. But Bitcoins’ gains are not the result of speculation alone. They partly reflect the fact that the Bitcoin system is much better designed than previous online currencies. And more significantly, the run-up also reflects anxiety about the safety of the global banking system and the stability of major international currencies. (MORE: No Money, No Problems: Canada Considers Completely Digital Currency) The technicalities of the Bitcoin system are complex, but to make this online currency more successful than previous versions, the designers overcame two key challenges. First, to prevent counterfeiting, they attached a history of transactions to each currency unit — but allowed users to keep their transactions nearly anonymous. Counterfeiting is hard because fake Bitcoins would need an authenticated history to pass muster. Second, they strictly controlled the supply of Bitcoins outstanding — thereby saving it from the disastrous fate of, for example, the paper currency known as assignats that were issued during<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77371&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>World Finance</primary_category><primary_category_link>http://business.time.com/category/world-finance/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/biz-bitcoin-130412.jpg?w=240</featured_image>
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			<media:title type="html">Bitcoin Value Soars And Drops</media:title>
		</media:content>

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			<media:title type="html">michaelsivy</media:title>
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		<title>Can the U.S. Dollar Become Almighty Once Again?</title>
		<link>http://business.time.com/2013/03/20/can-the-u-s-dollar-become-almighty-once-again/</link>
		<comments>http://business.time.com/2013/03/20/can-the-u-s-dollar-become-almighty-once-again/#comments</comments>
		<pubDate>Wed, 20 Mar 2013 14:35:25 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
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		<category><![CDATA[Wall Street]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=75257</guid>
		<description><![CDATA[Financial turmoil in Cyprus, where the parliament rejected a plan an eurozone bailout deal that would have taxed bank deposits, is prompting investors to shift cash from the euro zone to the U.S. That’s boosting the value of the dollar &#8212; and it’s just the latest installment in a story that has helped the dollar strengthen for more than a year. Despite gridlock in Washington and a string of economic mishaps, the dollar has risen by 7% since late 2011. That’s a striking turnaround for a currency that was in relentless decline for decades. If the upward trend continues – and there are good reasons to think it will – then the U.S. dollar could become almighty once again. The dollar’s decline over the past 30 years has been far greater than most Americans realize. It has lost almost half its value against other major currencies since 1985 and is down 33% in the past 11 years alone. Indeed, the value of the U.S. dollar is lower today than it was in 2009 when the recession ended. In part, this fall occurred because of government policies in Europe and Japan that kept the euro and the yen overvalued. A weak currency can bolster a country’s economy in the short run, by making goods cheaper for foreign buyers and thereby encouraging exports. But over the longer term, a robust economy is typically accompanied by a strong currency. A currency rises in value when more foreign money is flowing in than is flowing out. These inflows occur not only because of export sales but also because foreigners see investment opportunities or are seeking safe places to park their cash. As a result, a stronger dollar is a bellwether of an improving economy and a brighter outlook for U.S. stocks. And there are three reasons economists think the dollar’s rise could continue: (MORE: Cyprus: The E.U. &#8216;Rescue That Risks Backfiring) Other major countries are worse off economically. The U.S. economy may be sluggish, but it has grown for 14 straight quarters since the recession ended<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75257&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>World Finance</primary_category><primary_category_link>http://business.time.com/category/world-finance/</primary_category_link>
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			<media:title type="html">michaelsivy</media:title>
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		<title>If There’s No Inflation, Why Are Prices Up So Much?</title>
		<link>http://business.time.com/2013/03/12/if-theres-no-inflation-why-are-prices-up-so-much/</link>
		<comments>http://business.time.com/2013/03/12/if-theres-no-inflation-why-are-prices-up-so-much/#comments</comments>
		<pubDate>Tue, 12 Mar 2013 09:45:03 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Currency]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=74397</guid>
		<description><![CDATA[Last week, I ran out of ink for my printer and ordered some more online. My computer automatically pulled up the previous order, and I was shocked to see that the price of the ink cartridges I was buying had gone up 25%. To my mind, ink always seems overpriced. Manufacturers sell printers cheaply because they know that they can make lots of money on the ink. For the same reason, John D. Rockefeller’s Standard Oil is said to have sold millions of cheap kerosene lamps in order to make big profits selling kerosene. But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year? Price hikes for a particular item here or there don&#8217;t qualify as inflation. If one thing gets more expensive but something else gets cheaper, that’s what economists call a relative price change. Inflation is a simultaneous increase in prices across the board. Some measures of inflation, such as the GDP Deflator, track price changes that affect businesses as well as those that affect consumers. But the Consumer Price Index is supposed to focus on inflation at the consumer level. And the CPI has recorded minimal increases over the past four years. Since the recession ended, the 12-month change in consumer prices has averaged 2% and has never been as high as 4%. (MORE: Online &#8216;Predictions&#8217; Market Intrade Shuts Down Months After Federal Lawsuit) There are lots of other ways to gauge inflation, however, that give very different signals. Gold was $930 an ounce when the recession ended, and today it’s $1,583. So if you believe in the gold standard, prices have increased 70% in four years – or an annualized rate of 14.2%. Of course, many economists dismiss the gold price as an archaic indicator. So it may be more meaningful to look at price increases over a broad range of commodities. The Reuters CRB Commodity Index, which tracks the prices of coffee, cocoa, copper, and cotton, as well as<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=74397&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/01/inflation.jpg?w=240</featured_image>
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			<media:title type="html">inflation</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Is the World on the Brink of a Currency War?</title>
		<link>http://business.time.com/2013/02/21/is-the-world-on-the-brink-of-a-currency-war/</link>
		<comments>http://business.time.com/2013/02/21/is-the-world-on-the-brink-of-a-currency-war/#comments</comments>
		<pubDate>Thu, 21 Feb 2013 10:45:44 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Bonds]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=72468</guid>
		<description><![CDATA[The latest hot topic among economic talking heads is the coming currency war. According to conventional wisdom, there’s a risk that major countries will – simultaneously – try to revive their sluggish economies by pushing down the value of their currencies. That strategy could backfire, according to this line of thought, stifling international trade, tipping economies back into recession, and possibly causing Depression-style hyperinflation to boot. Get ready to sell apples on the nearest street corner and buy your morning coffee with a wheelbarrow full of paper money. It all sounds very unpleasant. But the dogs of war are unlikely to slip their leash. In a classic currency war, a country prints money, holds interest rates down, or intervenes in foreign exchange markets in order to depress the value of its own currency. That makes the country&#8217;s exports cheaper and more attractive for foreign buyers. In theory, this can enable an economy to grow faster than would be possible on the basis of domestic demand alone. Only trouble is, if every country pursues a similar strategy, they all devalue their currencies at the same time and no country gains an advantage over its trading partners. It may look as though that’s what’s happening now, since many of the largest economies are following policies that could depress the value of their currencies. But they’re doing so for fundamentally different reasons – to address domestic economic problems rather than to boost exports. And while this creates some real risks, they aren’t the ones that the term &#8220;currency war&#8221; implies. (MORE: Why Can&#8217;t People with Student Loans Refinance at Better Rates?) Currency wars – and trade wars generally – have their origins in a 17th and 18th century economic theory known as mercantilism. The idea was that a country’s wealth comes from selling more than it buys. A colonial empire could achieve this positive balance of trade by acquiring cheap raw materials from its colonies and then ensuring that it exported more finished goods than it imported. This was usually accomplished with tariffs that made<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=72468&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/02/21/is-the-world-on-the-brink-of-a-currency-war/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/07/2100_ml_foreignmoney_0713.jpg?w=240</featured_image>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Waiting for Change: The Battle Over the U.S. Penny</title>
		<link>http://business.time.com/2013/01/24/waiting-for-change-the-battle-over-the-u-s-penny/</link>
		<comments>http://business.time.com/2013/01/24/waiting-for-change-the-battle-over-the-u-s-penny/#comments</comments>
		<pubDate>Thu, 24 Jan 2013 13:00:18 +0000</pubDate>
		<dc:creator>Josh Sanburn</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Government]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=68161</guid>
		<description><![CDATA[When was the last time you stopped to pick up a penny? Given that its purchasing power has dwindled to nearly nothing over the years, it&#8217;s probably been a while. The U.S. penny persists — but how long can it hold on? On Feb. 4, Canada will begin taking its pennies out of circulation, citing cost (it takes 1.6 cents to mint each one) and diminishing utility. And America&#8217;s anti-penny forces are hopeful that actions by our neighbor to the north will spur Washington to eliminate U.S. one-cent coins, each of which costs two cents to mint. Indeed, it gets increasingly difficult to defend a coin that costs us all money every year. But there are forces fighting for the status quo as well, including the zinc lobby. (Pennies are mostly made of zinc, not copper.) Plus, there&#8217;s the fact that without the penny, we&#8217;ll become more reliant on the nickel — a coin with it&#8217;s own sticky set of issues. Check out the latest TIME Explains video to get a sense of the U.S. penny&#8217;s persistent problems; and this week&#8217;s issue of TIME Magazine for the full story, &#8220;Waiting for Change.&#8221;<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=68161&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Currency</primary_category><primary_category_link>http://business.time.com/category/economy-policy/currency-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/01/time_explainerpenny_1280.jpg?w=240</featured_image>
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			<media:title type="html">jsanburn</media:title>
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		<title>The Pessimist&#8217;s Guide to Surviving the Fiscal Cliff</title>
		<link>http://business.time.com/2012/11/13/the-pessimists-guide-to-surviving-the-fiscal-cliff/</link>
		<comments>http://business.time.com/2012/11/13/the-pessimists-guide-to-surviving-the-fiscal-cliff/#comments</comments>
		<pubDate>Tue, 13 Nov 2012 16:13:49 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Health Care]]></category>
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		<category><![CDATA[Oil]]></category>
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		<category><![CDATA[Real Estate Markets]]></category>
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		<category><![CDATA[Tax Policy]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[Wealth]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=60873</guid>
		<description><![CDATA[Optimism has been growing that Democrats and Republicans will be able to reach a budget deal that brings the deficit down to a sustainable level while avoiding a recession. A lot of investors appear to be skeptical, though, judging by the fact that the Dow has declined 473 points since President Obama won re-election. I&#8217;m skeptical too. A compromise may be achieved that avoids the drastic spending cuts and sizable tax increases scheduled for next year. But it&#8217;s hard to see how the economy will be able to achieve better than sluggish growth, accompanied by the risk of rising inflation. The problem is the math. If a country runs a deficit (as a percentage of GDP) that is equal to its growth rate, the debt level will remain constant. This year U.S. GDP will be a little less than $16 trillion, and its historical growth rate is 3.25%. That works out to what we might call a &#8220;safe&#8221; deficit of $520 billion, or even $600 billion if you allow for a little inflation. Last year, however, the U.S. deficit was $1.1 trillion — or roughly $500 billion too much. That gap could be closed by ending all tax cuts, tax breaks and stimulus payments for everyone, according to the Tax Policy Center. But two-thirds of the burden would fall on the middle class — something both political parties want to avoid. All the proposed tax increases on the wealthy, however, even combined with the end of the payroll-tax cut, would raise only $295 billion. So unless there were spending cuts twice as big as the ones currently scheduled, the deficit would still be too large. (MORE: Will Obama Make Wall Street Pay for Its Support of Romney?) Some people have proposed forgetting about the deficit until the economy is growing robustly. But there is a limit to how much more debt the U.S. can safely take on. The National Bureau of Economic Research calculates that debt greater than 90% of GDP slows economic growth. And at the current rate, within four years the U.S. will<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=60873&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>13</slash:comments>
	<primary_category>Investing</primary_category><primary_category_link>http://business.time.com/category/wall-street-markets/investing-wall-street-markets/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/fiscal.jpg?w=240</featured_image>
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			<media:title type="html">House Speaker Boehner Holds News Conference On Impending Fiscal Cliff</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Whoever He Is, the President Elect Will Quickly Face an Economic Crisis</title>
		<link>http://business.time.com/2012/11/05/whoever-he-is-the-president-elect-will-quickly-face-an-economic-crisis/</link>
		<comments>http://business.time.com/2012/11/05/whoever-he-is-the-president-elect-will-quickly-face-an-economic-crisis/#comments</comments>
		<pubDate>Mon, 05 Nov 2012 16:00:49 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Health Care]]></category>
		<category><![CDATA[Healthcare]]></category>
		<category><![CDATA[Job Markets]]></category>
		<category><![CDATA[Jobs]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=59923</guid>
		<description><![CDATA[This election cycle has been so contentious, divisive, and relentless that most Americans will breathe a sigh of relief once it’s over. Vice President Joe Biden has said he plans to take a vacation three days after the election, but the President Elect will have no such chance to kick back. In fact, he will scarcely have time to catch his breath once the ballot counting is completed. For while the drama of this election has monopolized much of the media coverage in recent weeks, the U.S. is confronting a host of terribly difficult economic issues that will have to be dealt with early next year. Fortunately, the most daunting challenges facing the nation offer some breathing room. The current recovery has been the weakest since World War II, and the current unemployment rate is higher than it was the day that President Obama was sworn into office. Some experts say this is because the recession hit the financial and housing sectors unusually hard, doing structural damage that held back the rebound. Others argue that it is the result of a badly targeted stimulus program and misguided tax and regulatory policies. Either way, something will need to be done to accelerate the speed of the recovery. (PHOTOS: The Recession in Pictures: America Copes with a Stagnant Economy) Over the longer term, the U.S. also faces a debt crisis. Borrowing more than a trillion dollars a year is swelling the debt faster than the economy can grow. That means debt will continue to rise relative to GDP, putting the U.S. on track to economic instability. It will be some years, however, until the country reaches an acute crisis. At present, the ballooning debt – and the Federal Reserve’s easy-money policies that finance it – have not significantly pushed up either interest rates or inflation. The key to any permanent deficit solution will be reform of the major entitlements, including Social Security and health care. And that will require extraordinarily difficult compromises. (MORE: The Art of Badmouthing Good Jobs News) Those compromises are unlikely to be reached in the<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=59923&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/155341926-1.jpg?w=240</featured_image>
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			<media:title type="html">In Profile: 100 Years In US Presidential Races</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>LIBOR Lending Rate Gets Overhaul (Sort Of)</title>
		<link>http://business.time.com/2012/09/28/libor-lending-rate-gets-overhaul-sort-of/</link>
		<comments>http://business.time.com/2012/09/28/libor-lending-rate-gets-overhaul-sort-of/#comments</comments>
		<pubDate>Fri, 28 Sep 2012 11:24:28 +0000</pubDate>
		<dc:creator>Peter Gumbel</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Bank of England]]></category>
		<category><![CDATA[banks]]></category>
		<category><![CDATA[FSA]]></category>
		<category><![CDATA[LIBOR]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=50427</guid>
		<description><![CDATA[The LIBOR money-market rates, widely used around the world as the benchmark for interest rates on mortgages, credit cards and billions of dollars worth of other financial transactions, will be cleaned up and subject to substantial new regulations under official proposals announced Friday. But the way the rates are set won’t fundamentally change, and they will continue to be based on bankers’ estimates as much as real market transactions. British regulators will step in to set tough new rules for the system, replacing ineffective self-regulation by the British Bankers’ Association but the regulators won’t run the rate-fixing process. Instead, that will be outsourced to an independent body. And the whole process will be streamlined to reduce the number of currencies and rates that are set on a daily basis. The key proposals outlined Friday by Martin Wheatley, a managing director of Britain’s Financial Services Authority, are aimed at salvaging the scandal-ridden London Interbank Offered Rate. The British government is expected to implement them rapidly after a parliamentary debate. LIBOR is at the heart of $300 trillion worth of financial transactions, but its reputation has taken a severe battering in the past few months on revelations of alleged massive manipulation of the rate by the bankers who set it. The scandal has shaken London’s reputation as a leading financial center. The revelations arose from a case brought by the U.S. Commodity Futures Trading Commission and the FSA against Barclays, which paid a $450 million fine in June to settle manipulation charges. Another British bank, Royal Bank of Scotland, has since indicated publicly that it is likely to be fined. Fraud inquiries into the role of individual banks and bankers are currently underway in the U.S., the U.K., and Germany, among other countries. In the uproar over the manipulation, regulators in Britain and the U.S. started taking heat for not intervening faster. The New York Federal Reserve, for example, was told in 2007 that something was amiss with the LIBOR mechanism. It expressed its concerns and recommendations to the Bank of England,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=50427&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>4</slash:comments>
	<primary_category>Currency</primary_category><primary_category_link>http://business.time.com/category/economy-policy/currency-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/09/514231900.jpg?w=240</featured_image>
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			<media:title type="html">BRITAIN-BANKING-LIBOR-RATE-COMPANY-REGULATE-FSA-BARCLAYS</media:title>
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			<media:title type="html">petergumbeltime</media:title>
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		<title>The Strange Allure of the Gold Standard</title>
		<link>http://business.time.com/2012/08/29/the-strange-allure-of-the-gold-standard/</link>
		<comments>http://business.time.com/2012/08/29/the-strange-allure-of-the-gold-standard/#comments</comments>
		<pubDate>Wed, 29 Aug 2012 12:00:20 +0000</pubDate>
		<dc:creator>David Futrelle</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[gold standard]]></category>
		<category><![CDATA[republican national convention]]></category>
		<category><![CDATA[republicans]]></category>
		<category><![CDATA[ron paul]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=47888</guid>
		<description><![CDATA[Some Republicans want to take the country forward by taking us back &#8212; way back – to the gold standard. The Republican party platform, approved on Tuesday, warns against the evils of &#8220;easy money and loose credit&#8221; and calls for a commission to &#8221;investigate possible ways to set a fixed value for the dollar.&#8221; This proposal is clearly a sop to Ron Paul, who made “sound money” one of his big issues during his failed campaign, and has about as much chance of being enacted as Romney has of winning the African-American vote. But the mere fact of its existence is significant. Almost everyone who is not Ron Paul, or at the very least a Ron Paul fan, thinks the idea of returning to the gold standard is daft. A recent University of Chicago poll of top academic economists found precisely zero who thought that was a good idea. Liberal commenters are aghast that the issue is even being raised. Economist and New York Times columnist Paul Krugman has described the gold standard as  “an almost comically (and cosmically) bad idea.” On The Atlantic, Matthew O&#8217;Brien called the gold standard “the world’s worst economic idea.” He conceded that “[t]here might be worse ideas than this, but they generally involve jumping off the Brooklyn Bridge because everybody else is doing it.” But aversion for the gold standard is hardly confined to the left. Economist Milton Friedman, the late king of the monetarists, argued that the idea was fundamentally “anti-libertarian because what they mean by a gold standard is a governmentally fixed price for gold.&#8221; (MORE: Is the U.S. Headed for a Double-Dip Recession?) Yet the gold standard still has its fans. What’s the appeal? True goldbugs have an almost religious faith in the power of the precious metal, and a deep distrust of government. To some, what they call “sound money” is the only moral solution. At a conference organized by the libertarian Cato Institute last fall, speakers denounced our current policy of “fiat money” with the fervor of preachers. As George Melloan observed<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=47888&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>14</slash:comments>
	<primary_category>Currency</primary_category><primary_category_link>http://business.time.com/category/economy-policy/currency-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2011/06/31_multipart3f2_image.jpeg?w=240</featured_image>
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			<media:title type="html">gold bars</media:title>
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			<media:title type="html">dsfutrelle</media:title>
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		<title>The Big New Idea for Saving the Euro</title>
		<link>http://business.time.com/2012/07/31/the-big-new-idea-for-saving-the-euro/</link>
		<comments>http://business.time.com/2012/07/31/the-big-new-idea-for-saving-the-euro/#comments</comments>
		<pubDate>Tue, 31 Jul 2012 13:21:14 +0000</pubDate>
		<dc:creator>Peter Gumbel</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[World Finance]]></category>
		<category><![CDATA[banking]]></category>
		<category><![CDATA[Euro]]></category>
		<category><![CDATA[European Central Bank]]></category>
		<category><![CDATA[Mario Draghi]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=45080</guid>
		<description><![CDATA[The dramatic promise made on July 26 by Mario Draghi, the president of the European Central Bank, that he would do “whatever it takes” to save the euro, calmed financial markets but left many traders and economists around Europe scratching their heads. His words were quickly echoed over the weekend by German Chancellor Angela Merkel and French President François Hollande in a joint communiqué, as well as by Italy’s Prime Minister Mario Monti. But the big question they and Draghi aren’t answering, at least in public, is what more the ECB and European governments could actually do – other than make grandiose statements – to fight off the waves of financial speculative attacks against Spain, Italy and other countries that threaten to destroy the euro. This week, however, the contours of one possible scenario have been coming into focus. It would involve granting a banking license to the European Stability Mechanism, the new bailout instrument that euro zone governments have agreed to set up and equip with 700 billion euros. The ESM, which would replace a smaller temporary fund set up in 2010, is in the process of being ratified by the 17 European Union nations that use the euro, and is expected to start functioning later in the year, assuming it passes that hurdle. Of its total capital, 80 billion euros would be paid-in by governments, and the remainder would take the form of guarantees. It’s called a “mechanism” but in fact the ESM is being set up as an international institution based in Luxembourg. In theory, granting it a banking license would massively increase its firepower to help states such Spain or Italy that need to refinance their debt and fight off the financial markets perhaps once and for all. (MORE: Europe’s Debt Crisis Seems Bad? Look at Its Car Industry) This is how it would work: The ESM, like any bank, would be able to leverage its own capital by borrowing from the European Central Bank. Even if it leveraged up only moderately, say by a factor of<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=45080&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2012/07/31/the-big-new-idea-for-saving-the-euro/feed/</wfw:commentRss>
		<slash:comments>10</slash:comments>
	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/07/eurozone_0730.jpg?w=240</featured_image>
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			<media:title type="html">Euro Zone Crisis</media:title>
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			<media:title type="html">petergumbeltime</media:title>
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		<title>China Takes a Big Step to Make the Yuan a Rival to the Dollar</title>
		<link>http://business.time.com/2012/07/02/china-takes-a-step-to-make-the-yuan-a-rival-to-the-dollar/</link>
		<comments>http://business.time.com/2012/07/02/china-takes-a-step-to-make-the-yuan-a-rival-to-the-dollar/#comments</comments>
		<pubDate>Mon, 02 Jul 2012 08:27:12 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[policy]]></category>
		<category><![CDATA[Shenzhen]]></category>
		<category><![CDATA[special economic zone]]></category>
		<category><![CDATA[yuan]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=42106</guid>
		<description><![CDATA[Shenzhen is where China’s economic miracle began. Back in 1980, Deng Xiaoping and his Beijing comrades launched a special economic zone, or SEZ, in the southern enclave that became the center of a grand experiment in introducing free capitalism into Communist China. Foreign investors were invited to set up factories in the zone, cracking open the tightly controlled economy to the outside world, and as money poured in, attracted by China’s cheap and plentiful labor, world economic history was altered forever. The Asian giant was transformed from an agrarian basket case into the “Workshop of the World” and chief rival to American economic dominance. Now Beijing is again turning to Shenzhen for a new batch of trials with capitalism by dusting off that old idea of the SEZ and repurposing it. The consequences could prove just as sweeping for both China and the world. On Friday, Chinese policymakers formally revealed that they would turn a slice of Shenzhen into a new sort of SEZ to experiment in currency convertibility. The SEZ, called the “Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone” will be developed near the border with bustling Hong Kong at a cost of $45 billion. Details on exactly what financial reforms will take place in the zone were sparse. It is possible that the measures will include the permission of some cross-border yuan lending between Hong Kong and mainland firms. But the purpose was made clear: China is will take steps to free up the ways in which its currency, called the yuan or renminbi (RMB), can be used in international finance. “The country&#8217;s policy is to gradually open up its capital account and realize the full convertibility of the yuan,&#8221; said Zhang Xiaoqiang, vice chairman of China&#8217;s influential National Development and Reform Commission. &#8220;Qianhai, as the first experimental zone of the country&#8217;s modern service industry, should be a pioneer of that.” (MORE: China’s Antiquated Financial System: The Creaking Grows Louder) In introducing this zone, China is taking an important step towards achieving one of its major goals<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=42106&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2012/07/02/china-takes-a-step-to-make-the-yuan-a-rival-to-the-dollar/feed/</wfw:commentRss>
		<slash:comments>14</slash:comments>
	<primary_category>Currency</primary_category><primary_category_link>http://business.time.com/category/economy-policy/currency-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/07/shenzhen_0702.jpg?w=240</featured_image>
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			<media:title type="html">Shenzhen</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>Why Spain’s Big Bank Bailout Is Really a Big Bust</title>
		<link>http://business.time.com/2012/06/13/why-spains-big-bank-bailout-is-really-a-big-bust/</link>
		<comments>http://business.time.com/2012/06/13/why-spains-big-bank-bailout-is-really-a-big-bust/#comments</comments>
		<pubDate>Wed, 13 Jun 2012 10:45:16 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[austerity]]></category>
		<category><![CDATA[bailout]]></category>
		<category><![CDATA[big banks]]></category>
		<category><![CDATA[Debt Crisis]]></category>
		<category><![CDATA[economic growth]]></category>
		<category><![CDATA[europe]]></category>
		<category><![CDATA[eurozone]]></category>
		<category><![CDATA[Greece]]></category>
		<category><![CDATA[Italy]]></category>
		<category><![CDATA[Spain]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=40240</guid>
		<description><![CDATA[Every time the leaders of the beleaguered euro zone come together to make a decision aimed at quelling its debt crisis, the boost in confidence for the common currency’s future becomes shorter-lived. The latest step — a European Union–backed bailout of Spain’s weakened banks of up to 100 billion euros ($125 billion), announced on Saturday — was, as usual, hailed as another landmark toward ensuring the survival of the 17-nation monetary union. E.U. Commissioner Olli Rehn called the bailout “a very clear signal to the market, to the public that the euro area is ready to take decisive action in order to calm down market turbulence.” But the decision barely registered on the sentiment meter. By Monday afternoon, the yields on Spanish bonds — a measure of how risky investors perceive them to be — were again on the rise. By Tuesday, they were spiking toward 7%, the level at which other euro-zone countries were forced to seek a rescue, putting more pressure on the government in Madrid. (MORE: Why the Euro Zone Could Unravel Shockingly Fast) What went wrong? The usual charge — that Europe’s leaders responded too feebly — can’t necessarily be leveled this time. The promised funds for Spain’s banks exceed some estimates of what the sector might actually require in new capital. In a recent report, the International Monetary Fund, which called the Spanish banking crisis “unprecedented in its modern history,” estimated that the banks will require some $46 billion in fresh capital. But the problem starts with how the bailout will be implemented. Rather than inject money from the euro zone’s bailout fund directly into Spanish banks, the E.U. rescue will take the form of loans funneled through Spain’s government bank-repair vehicle, called the Fund for Orderly Bank Restructuring, or Frob, which will then use that financing to recapitalize the banks. That means the Spanish government will ultimately be on the hook for paying the bailout loans back. And that’s exactly what investors have been worried about — that Spain’s government will in the end bear the burden of fixing the banks,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=40240&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2012/06/13/why-spains-big-bank-bailout-is-really-a-big-bust/feed/</wfw:commentRss>
		<slash:comments>26</slash:comments>
	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/06/600_biz_spain_0612.jpg?w=240</featured_image>
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			<media:title type="html">600_biz_spain_0612</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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		<title>China&#8217;s Antiquated Financial System: The Creaking Grows Louder</title>
		<link>http://business.time.com/2012/06/05/chinas-antiquated-financial-system-the-creaking-grows-louder/</link>
		<comments>http://business.time.com/2012/06/05/chinas-antiquated-financial-system-the-creaking-grows-louder/#comments</comments>
		<pubDate>Wed, 06 Jun 2012 03:16:33 +0000</pubDate>
		<dc:creator>Knowledge@Wharton</dc:creator>
				<category><![CDATA[Asia]]></category>
		<category><![CDATA[Companies & Industries]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Bank of China]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[currency wars]]></category>
		<category><![CDATA[financial liberalization]]></category>
		<category><![CDATA[state-owned enterprises]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=39448</guid>
		<description><![CDATA[Experts say further financial liberalization is in the cards for China, as both domestic and external pressures mount. <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=39448&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>7</slash:comments>
	<primary_category>Asia</primary_category><primary_category_link>http://business.time.com/category/economy-policy/asia/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/03/china_bank_0312.jpg?w=240</featured_image>
		<media:thumbnail url="http://timebusinessblog.files.wordpress.com/2012/03/china_bank_0312.jpg?w=240" />
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			<media:title type="html">China Financial Reform</media:title>
		</media:content>

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			<media:title type="html">timeknowledgewharton</media:title>
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		<title>Why the Euro Zone Could Unravel Shockingly Fast</title>
		<link>http://business.time.com/2012/06/05/why-the-euro-zone-could-unravel-shockingly-fast/</link>
		<comments>http://business.time.com/2012/06/05/why-the-euro-zone-could-unravel-shockingly-fast/#comments</comments>
		<pubDate>Tue, 05 Jun 2012 07:00:46 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[euro zone breakup]]></category>
		<category><![CDATA[Lisbon Treaty]]></category>
		<category><![CDATA[United States]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=39466</guid>
		<description><![CDATA[Today the euro exists simply as a historical artifact held together by whatever practical advantages it still offers. And if those practical advantages disappear or become too costly, the euro zone could unravel with astonishing speed.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=39466&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2012/06/05/why-the-euro-zone-could-unravel-shockingly-fast/feed/</wfw:commentRss>
		<slash:comments>55</slash:comments>
	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/06/111084615.jpg?w=240</featured_image>
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			<media:title type="html">Torn Euro</media:title>
		</media:content>

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			<media:title type="html">michaelsivy</media:title>
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		<title>Euro Crisis: Is the Currency (Finally) Doomed?</title>
		<link>http://business.time.com/2012/05/24/euro-crisis-is-the-currency-finally-doomed/</link>
		<comments>http://business.time.com/2012/05/24/euro-crisis-is-the-currency-finally-doomed/#comments</comments>
		<pubDate>Thu, 24 May 2012 09:44:09 +0000</pubDate>
		<dc:creator>Michael Schuman</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Debt Crisis]]></category>
		<category><![CDATA[EU]]></category>
		<category><![CDATA[Euro]]></category>
		<category><![CDATA[europe]]></category>
		<category><![CDATA[Greece]]></category>
		<category><![CDATA[Italy]]></category>
		<category><![CDATA[Merkel]]></category>
		<category><![CDATA[Spain]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=38721</guid>
		<description><![CDATA[Since the start of Europe’s debt crisis in 2009, there has been a steady drumbeat of predictions that the euro is doomed. The problems were too intractable, the debts too large, the political will too feeble. So far, the doomsayers have been wrong. The leaders of Europe have managed to put a bandage here and a few stitches there to keep the monetary union together. But now we really have to ask if the game is up. The years of half-measures, misguided policy and delusional stubbornness may finally be building up to crush the euro, like a cartoon snowball rolling downhill. Financial markets are clearly smelling an approaching debacle &#8212; the euro this week hit its lowest level against the dollar since mid-2010.  Let’s take a quick look at the mounting evidence of impending catastrophe: Europe has all but admitted that Greece will exit the euro zone. It seems impossible to me that the second round of elections in Greece on June 17 will produce a government that will strictly adhere to the austerity measures agreed to by the previous government in return for European Union bailout funds. Yet German Chancellor Angela Merkel has made it clear that she has no intention of renegotiating. &#8220;We want Greece to remain in the euro zone,&#8221; she said after Wednesday’s summit of E.U. leaders in Brussels. &#8220;But the precondition is that Greece upholds the commitments it has made.&#8221; With that attitude, the leaders of Europe might as well boot Athens out of the union right now. Unless someone is willing to bend here, Greece won’t get its rescue money and will likely run out of funds by early July, which could force the country to reissue its own currency. No wonder European finance ministers earlier this week talked of the need for contingency plans to combat a Greek exit. (MORE: Euro Crisis: Why a Greek Exit Could Be Much Worse than Expected) If a failed bailout doesn’t push Greece out of the euro zone, the slow-motion bank run will. Unless something is done<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=38721&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>7</slash:comments>
	<primary_category>Europe</primary_category><primary_category_link>http://business.time.com/category/economy-policy/europe-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/05/euro600.jpg?w=240</featured_image>
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			<media:title type="html">A man is reflected standing next to a pawn shop near Athens, Greece</media:title>
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			<media:title type="html">michaeljschuman</media:title>
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