World Politics News   Articles for World Politics Course

The Harvard economist, Carmen Reinhart, had an interview with the German magazine, Der Spiegel, about the current policies of the world’s central banks.  Those policies are loosely termed “quantitative easing” which is simply a policy of printing money in order to purchase long-term capital assets such as bonds.  The policy of printing money always carries with it the risk of higher inflation, and Rienhart warns about that will happen if that situation arises in the future.  It’s a pretty grim warning.

Chilean students have been protesting for a number of years against the lack of public funding for higher education in the country.  The strikes get very little attention outside of Chile, but the protests represent a very sustained effort to force the country to address what the students believe to be a major cause of the income inequality in the country.  The protests have recently picked up in intensity and the government is responding in force.   There are elections scheduled soon in Chile and it will be interesting to see how the strikes affect the outcome.

Cypriots just learned that one of the conditions for the “bailout” of Cypriot banks also included the seizure of all of Cyprus’s gold reserves.  Apparently, even the Cypriot Central Bank was not informed of this condition for the bailout.  Needless to say, the seizure was not well-received.  But the Central Banks of all the other weak eurozone countries that might require a similar bailout are quite apprehensive of similar conditions.  The bailout conditions are nothing short of draconian and will unquestionably make it more difficult for weak governments to request outside assistance.  Such reluctance will only make the solutions more difficult in the future.