Interest Rates & Consumer Price Infaltion - US & EU

Interest rates in the US remain 2 1/4 points lower than those in the EU, despite greater consumer price inflation in the US. The Federal Reserve in the US is charged with both keeping inflation under control and stimulating the economy, while the EU central bank's mandate is only to keep inflation in check.

Interest Rate and Consumer Price Inflation Trends - US & EU

Source: WSJ

Bullish on the US Dollar - Exchange Rate vs Euro, Yen, British Pound

The dollar enjoyed its best one day performance in six years (on August 8, 2008). Fears that Europe's economic woes are just beginning and that Japan may be entering another recession prompted some analysts to say, "The dollar bear market is over. A multiyear bull market for the dollar has just begun." - Marc Chandler, currency strategist at Brown Brothers Harriman, New York.

Since July 1, 2008, the dollar is up 3.5% against the pound, 3.6% against the yen, and 6.0% against the euro.

US Dollar to Euro Exchange Rate 2005 - 08/08/08Source: http://www.oanda.com/convert/fxhistory


U.S. Dollar to Yen Exchange Rate 2005 - 08/08/08
Source: http://www.oanda.com/convert/fxhistory

US Dollar to British Pound Exchange Rate 2005 - 08/08/08Source: http://www.oanda.com/convert/fxhistory

See: Dollar's Best Gain in Six Years Powers Stocks

Bulgaria - GDP Growth and Contract Killings

Memorable lines from Casablanca:

[Annina is contemplating Renault's offer of exit visas for sex]

Rick: How long have you been married?

Annina: Eight weeks. We come from Bulgaria. Oh, things are very bad there, Monsieur. A devil has the people by the throat. So, Jan and I, we, we do not want our children to grow up in such a country.

Rick (wearily): So you decided to go to America...

Annina: Oh, monsieur, you are a man. If someone loved you very much, so that your happiness was the only thing that she wanted in the world, but she did a bad thing to make certain of it, could you forgive her?

Rick: Nobody ever loved me that much.

Annina: And he never knew, and the girl kept this bad thing locked in her heart? That would be all right, wouldn't it?

Rick: You want my advice?

Annina: Oh, yes, please.

Rick: Go back to Bulgaria.

Bulgaria is one of the European Union's newest and most troubled countries. While Bulgaria is the EU's poorest economy, GDP has been growing at at more than 6% since 2004. Nevertheless, the country is plagued by organized crime, corruption, drug trafficking, theft of economic assets, and an ineffectual judiciary. Opinions polls show that Bulgarians view the judiciary as the country's second most corrupt profession, after customs officials. Bulgaria's 7.7 million people face the EU's lowest wages, averaging around £150 a month. The country's per capita gross domestic product in 2005 was $3,328, compared with a European average of $29,207.

Source: IndexMundi

The country is struggling to cope with organized crime with a wave of unsolved contract killings and allegations of official collusion in mafia networks this year. There have been more than 150 contract killings since 1997 with not a single conviction, and according to the March report by the United Nations Office on Drugs and Crime, the majority of heroin on Europe's streets come via Bulgaria from Afghanistan.