1 Euro at four-year low as ECB chief hints at QE (Jennifer Rankin in The Guardian) The president of the European Central Bank (ECB) has raised expectations that he will turn on the money-printing presses to fight deflation early in the new year, sending the euro to its lowest level against the dollar in four and a half years.
Mario Draghi said the risk of inflation failing to return to its targeted level of 2% had grown in the past six months, alerting markets that the central bank could announce further stimulus as soon as its next meeting on 22 January. The euro fell to $1.20, its lowest since June 2010 when the currency was reeling after Greece had agreed its first €110bn bailout the previous month.
Eurozone inflation has already slipped to 0.3%, far off the ECB’s price-stability target of just below 2%, and economists expect the single currency zone to have sunk into outright deflation in December. They forecast falls of 0.1% when figures are released next Wednesday, with plunging oil prices a major factor.
Spain and Greece are experiencing falling prices and some economists are warning that the 19-strong currency bloc could become mired in a deflationary spiral that further dampens spending and consumer confidence.
Buying government bonds, a policy known as quantitative easing, is seen as one of the last weapons in the ECB’s arsenal to revive the eurozone, with interest rates having already been knocked down to 0.05%.
2 Macau gambling revenue sees first annual fall (BBC) Gambling revenue in Macau, the world’s biggest gaming hub, has fallen for the first time on an annual basis since its casinos were liberalised in 2001. Revenue fell 2.6% in 2014 to $44.1bn, with December seeing a record 30.4% drop in revenue from a year ago.
The territory’s annual revenue is still almost seven times that of Las Vegas, the world’s second biggest gaming hub. But, December saw the seventh consecutive monthly revenue decline for its casino, extending the downtrend. The prolonged slump in the sector has been blamed on the Chinese government’s campaign to rein in conspicuous spending and corruption.
Gaming revenue in Macau fell almost 20% in November from the previous year, while October’s fall was over 23% for the same time period. Macau, a special administrative region of China, is the only place in the country where casino gambling is legal.
Its growth skyrocketed after several international gaming companies opened resorts there when Chinese authorities ended a government-sanctioned casino monopoly in 2001. But now the Chinese government wants the region to diversify its economy from its reliance on gaming to sectors such as culture, sports and retail.
Macau’s casinos have lost a combined $58bn in market value over the past six months, according to Reuters.
3 An urbanizing world (Khaleej Times) Some two years ago, it was calculated, the world firmly entered the urban age, for the available evidence pointed to a startling truth: more people now live in cities than outside them.
Overall, the balance between urban and rural populations is thought, conventionally, to directly describe whether a country is likely to be in the high income or low income groups of countries. The Department of Economic and Social Affairs of the UN entrusts such calculations to its Population Division whose ‘World Urbanization Prospects’ found, in its 2014 revision, that the proportion of urban populations for high income countries was 80% while that for low income countries was 30%.
This seems to lend weight to the conventional wisdom that it is cities that galvanise the creation of the sort of wealth which gross domestic product (GDP) growth depends on. There is however another aspect to the formation of cities. In 1927, the film ‘Metropolis’, conceived by Fritz Lang and delivered as an artfully stylised cinematic message, described the strains and dangers of the power that cities had already come to have over their residents.
Just over 50 years later, another film, ‘Blade Runner’ (1982), blended science fiction with a disturbing portrait of a dystopian and dangerous cityscape that was both gigantic and technology-centric, through which the human element struggled to find meaning.
The Japanese capital Tokyo remains in 2014 the world’s largest city with an agglomeration of 38 million inhabitants, followed by New Delhi with 25 million, Shanghai with 23 million, and Mexico City, Mumbai and São Paulo, each with around 21 million inhabitants. By 2030, so the projections say, the world will have 41 mega-cities of more than 10 million inhabitants.
Despite the lengthening list of urban problems demographers foresee that today’s trend will add 2.5 billion people to the world’s urban population by 2050. India, China and Nigeria are together expected to account for 37% of the projected growth of the world’s urban population between this year and 2050. It is there that the idea of the city, which so fascinated Fritz Lang, will be sorely tested.