Global Business: Exchange and Value

Here you are, visiting the ever beautiful London, when you come across a shop with the most beautiful pair of shoes in the window. You notice they’re designer, vintage even, and in the perfect condition, and look, the price says £150. That’s reasonable you say, until you get to the counter to pay for the shoes, only for your mom to point out that £150, is actually $200 in U.S. dollars. This is called an “exchange rate”.

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Weekly Review: Last Week’s Top 5 International Business Headlines

1. US could ‘derail’ economic recovery – OECD

The most immediate threat to the global economy is coming from the US and its debt ceiling, warns the Organization for Economic Cooperation and Development (OECD), marking a major shift in concern from the eurozone to the world’s biggest economy. The Paris-based research organization released its bi-annual Economic Outlook report, which placed a heavy focus on the risk of a “binding” debt ceiling. Read more.

2. Europe’s Most Entrepreneurial Country? It’s Ireland

Ranking tech entrepreneurialism is a tricky task and whatever measure you come up with is going to annoy somebody, but by at least one measure, Europe’s most entrepreneurial country is Ireland. What does “most entrepreneurial country” mean? In this analysis, we looked at Dow Jones VentureSource data on the total amount of venture capital raised by tech companies in each European country since 2003, divided by population to…. Read more.

3. The world’s food supply depends on Morocco.

If hostilities renew between Morocco and Western Sahara rebels, production of a key mineral used in fertilizer would stall. Farmers on every continent could feel the pain. Morocco claims 75 percent of the planet’s known reserves of phosphorus, an essential ingredient in commercial fertilizer. That gives the North African country a near-monopoly on the multibillion-dollar global trade of the mineral mined from phosphate rock, with clients on every continent. Read more.

4. Japan is showing the world that stimulus works

Shinzo Abe’€s commitment to government spending has sparked remarkable growth. Abe became prime minister at the end of 2012 and quickly embarked on a program of aggressive government stimulus. He pushed through spending measures focused on improving Japan’s infrastructure, child care and health care, plus other measures anticipated to provide long-term benefits. Read more

5. Dollar cap: China limits world’s highest foreign currency reserves

China’s central bank has said it no longer sees any benefit in increasing its $3.66 trillion foreign currency reserves – already the world’s largest. China will cap its purchases of US dollars in an effort to limit the depreciation of the yuan.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Bloomberg quoted Yi Gang, a deputy governor at the central bank as saying Tuesday. Read more.