Paul Julius Reuter noticed that, with the electric telegraph, news no longer required days or weeks to travel long distances. In the 1850s, the 34-year-old Reuter was based in Aachen — then in the Kingdom of Prussia, now in Germany — close to the borders with the Netherlands and Belgium. He began using the newly opened Berlin–Aachen telegraph line to send news to Berlin. However, there was a 76-mile (122 km) gap in the line between Aachen and Brussels, Belgium’s capital city and financial center. Reuter saw an opportunity to speed up news service between Brussels and Berlin by using homing pigeons to bridge that gap.
Asian powers guard against inflows after IMF
BEIJING/NEW YORK (Reuters) – Asian authorities anxious about currency appreciation moved to stem foreign capital inflows on Monday while a European official stepped up rhetoric about a strong euro after IMF meetings failed to defuse tensions about exchange rates.
China temporarily raised reserve requirements for six large commercial banks, four sources told Reuters, a surprise move aimed at draining cash from the economy.Thailand,China should widen yuan’s float- c.bank researcher_6839, also on edge about a rapidly rising currency that has alarmed exporters, said it may impose a tax on foreigners’ bond purchases.With interest rates in the developed world at record lows, investors have poured money into higher-yielding emerging market assets, driving up local currencies in the process.Governments, afraid that rising exchange rates will hurt exports and stunt economic growth, have tried to limit currency appreciation, sparking fears of a “race to the bottom” that may trigger trade tariffs and a sharp decline in global growth.”If each country insists on its own interest during the recovery phase, it will bring about trade protectionism and will cause the world economy very big problems,Coach Tiger Tattoo Handbags Outlet,” South Korean President Lee Myung-bak told foreign journalists during a lunch meeting at his residence.World finance leaders made no headway on currency disputes at a weekend International Monetary Fund meeting,Airline results affirm recovery on track_6794, and Lee urged an agreement before his country hosts a G20 summit next month.HOT MONEYBut China’s central bank governor said Monday it will take time to correct the uneven pattern of global growth that has contributed to exchange rate tensions, warning that attempts at a quick fix could create more problems.”People may not have that kind of patience, so they would like to see a quick changes in the balance, but it may cause a kind of overshooting,” Zhou Xiaochuan said during a discussion with other central bank governors at the National Press Club.U.S. and European officials hold that limiting emerging market currency gains is the main cause of imbalances and has urged China in particular to let its yuan rise more rapidly.Analysts said China’s reserve requirement hike should be seen as an attempt to slow massive foreign capital inflows rather than a prelude to tighter monetary policy.”Hot money inflows have been rising. But I don’t think this is a tightening move. It’s just part of liquidity management,Coach Baby Bags Outlet,” said Qing Wang, chief China economist at Morgan Stanley.The move comes weeks ahead of a Federal Reserve policy meeting at which markets expect the U.S. central bank to begin a second round of quantitative easing, which would heap even more downward pressure on the U.S. dollar and send more money into developing economies, including China and Thailand.Thai Deputy Finance Minister Pradit Phataraprasit told reporters the Cabinet may consider a bond tax on Tuesday, though he would not comment on local reports of a possible 15 percent withholding tax on capital gains on government bonds.While the Fed is widely expected to start printing money again in November to jump-start a faltering recovery,Coach Hobo Bags Outlet, Vice Chairwoman Janet Yellen does appear aware of the risks.”It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system,” she said on Monday.ECB ON EDGELatin American governments, most notably Brazil, have also acted to curb hot money inflows while Japan has intervened to weaken the yen and is threatening to do so again.That has increased flows into the euro, which rose above $1.40 last week, and sparked concern among European Central Bank officials.Guy Quaden, head of Belgium’s central bank, said global cooperation was needed to avoid “brutal” exchange rate volatility, reviving one of the strongest terms that ECB officials have used to show displeasure with currencies.ECB President Jean-Claude Trichet last described exchange rate moves as “brutal” in late 2007, when the euro traded at a then record high. But it had little effect — the single currency kept rising in 2008, peaking above $1.60.But because the ECB, unlike the Fed or Bank of Japan, is not expected to ease policy further, efforts to talk down the euro look destined to fail.(Writing by Mike Peacock and Steven C. Johnson; Editing by Chizu Nomiyama)
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