The Christian Science Monitor: “No, Chinese inflation isn’t a good sign”

Experts say that Chinese inflation is a natural side effect of a healthy economy. Here’s why they’re wrong, acccording to “Guest Blogger” Joseph Salerno, a professor of economics in Pace’s Lubin School of Business.

The Christian Science Monitor writes that it has “assembled a diverse group of the best economy-related bloggers out there – “The Circle Bastiat” – and we are proud that Lubin’s Joseph Salerno is one of them!

Dr. Salerno’s most recent article focused on inflation in China. It is embedded below, or read it online.

No, Chinese inflation isn’t a good sign

Experts say that Chinese inflation is a natural side effect of a healthy economy. Here’s why they’re wrong.

By , Guest blogger / April 10, 2012

Well, well, well, the Chinese economy is experiencing inflation. Overall consumer prices rose by 3.6 percent in March 2012, year-over-year, including an upsurge in food prices of 7.5 percent. Even the prices of venerable Chinese herbal medicines took an upward leap of 8.3 percent. According to a CNNMoney report, inflation is “the price of prosperity.” The report goes on to fatuously instruct us, “While inflation poses challenges for consumers, it is the byproduct of one of the most robust economies in the world.” A comparison of China’s 9.2 percent real GDP growth in 2011 with the paltry 1.2 percent growth rate for U.S. real GDP in the same year is thrown in as supposed proof of this statement.

But this is utter nonsense and one of the most deeply entrenched myths in both academic economics and media commentary. Basic economic theory demonstrates that “economic growth,” which is nothing but  an increase in the supplies of various goods and services, is in and of itself deflationary. An increase in the supply of any good (or service), with the supply of money and all other factors fixed, results in a fall in its price and a growth in its sales, as the excess supply of the good drives the equilibrium price down and expands the quantity demanded. This irrefutable economic truth has been illustrated time and again since the late 1970s by sharp declines in the prices of items like personal computers, video game systems, HDTVs, digital cameras, and cell phones and of (uninsured) medical procedures like Lasik eye surgery and cosmetic surgery. Furthermore, this fall in prices has not caused stagnation in these industries but has instead coincided with their rapid expansion. I have explained this phenomenon of  “growth deflation” in more depth elsewhere.

What then is the cause of the accelerating Chinese inflation? We need look no further than the money supply. The broad measure of the Chinese money supply, M2, which includes currency in circulation and all bank deposits, increased by 13.6 percent in 2011, although the People’s Bank of China had targeted a 16 percent increase. The PBOC has announced that it will set the money supply growth rate at 14 percent for 2012. This inflation targeting policy, so beloved by contemporary macroeconomists, augurs more rapid price inflation for Chinese consumers for years to come. More important,  China’s long-standing super-loose monetary policy means that inflationary credit expansion has fueled a great part of the rapid growth of the Chinese economy, which is therefore unsustainable and doomed to collapse. Indeed, the pace of Chinese economic growth has already begun to falter in the last two quarters. In response, the PBOC has already cut reserve requirements twice in the last three months.

Having allowed the inflation tiger out of its cage, the Chinese government is now desperately hanging on to its tail. It must either cage the tiger forthwith  and confront the damage it has already wreaked in the form of a collapse in its economic growth rate; or it must inevitably lose its grip and permit its burgeoning market economy to be devoured by the beast in an inflationary breakdown and reimposition of direct controls.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers’ own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger’s own site by clicking on blog.mises.org.

BBC World Have Your Say: “Arab Spring”

Pace Economics Lecturer Ghassan Karam discussed the recent uprisings in the Middle East as a guest panelist on World Have Your Say, BBC’s award-winning global interactive news discussion show, on April 22, 2011.

Pace Economics Lecturer Ghassan Karam discussed the recent uprisings in the Middle East as a guest panelist on World Have Your SayBBC’s award-winning global interactive news discussion show, on April 22, 2011.

View the video clip on YouTube.

TheBlaze.com and Business Insider: “Congressman Wants Justice Department To Investigate ‘Terrorist Plans’ In Former Union Official’s Bank Plot”

At The Left Forum at Pace’s downtown campus earlier this month, one of the several thousand participants, Stephen Lerner, a former SEIU official, repeated earlier calls for “a new financial crisis,” according to coverage by Fox news and other media.

At the Left Forum earlier this month, Stephen Lerner, a former SEIU official no longer with the union, revealed what several media called a “secret” plan to “cause a new financial crisis.'” Fox News covered the story; so did the websites The Blaze and Business Insider, which reported on a letter from U.S. Representative Jason Chaffetz (R-UT) to the US Attorney General requesting an investigation.

Stephen Lerner

 

Read the full letter in TheBlaze.com or Business Insider.

TV Tokyo: “Dictionary of Money” – Arbitrage (Episode 18); Bid-Ask (Episode 20)

TV Tokyo, one of the major TV networks in Japan, features a weekly business news program called “Dictionary of Money.”

The purpose of the program – which has approximately 10 to 15 MILLION viewers nationwide – is to educate its audience about the U.S. economy and New York City as the financial center of the world.

Lubin School of Business Professors are becoming “regulars” with recent guest appearances by:

* Iuliana Ismailescu, Ph.D., Assistant Professor of Finance, who discussed “Arbitrage” (the practice of taking advantage of a price difference between two or more markets).

* Aron Gottesman, Ph.D., Associate Professor of Finance, who explained the concept of “Bid-Ask” (essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it).

Dr. Iuliana Ismailescu simplifies “Arbitrage” for Dictionary of Money’s almost 15 million viewers, by explaining:

* What is it?
* How does it work?
* Is it risk-free?
* Who/What is an arbitrageur?

http://www.m2j.co.jp/sukusuku/money_jiten/20101031.html

Dr. Aron Gottesman, on the subject of “Bid-Ask,” discusses:

* Where and how is this used in the market/NYSE etc.
* Who bids, and who asks.
* Defines what roles they play.
* Gives examples of how the process works.

http://www.m2j.co.jp/sukusuku/money_jiten/20101114.html

Click on the links, then the forward arrow to the bottom left of the TV screen, to learn more about these topics.

Lubin Professor on CNN

Lubin professor Jorge Pinto appeared on CNN en Español Economía y Finanzas to discuss the state of the economy in the US and Latin America, noting that gold prices reflect investors’ speculation about the economic future, and that high budget deficits are fueling fear about the value of the dollar.

Pace University named to Forbes list of “Colleges That Will Make You Rich”

Pace University has been ranked by Forbes.com as one of the top 20 “colleges that will make you rich.” The Forbes survey echoes previous findings from a PayScale/Business Week survey that found the starting median salary of recent Pace graduates was in the same league as that for graduates of Yale, Dartmouth, Harvard, Princeton, Stanford and Columbia. That survey found Pace graduates earning a starting median salary of $53,200, listed a mid-career median salary of $89,700 and found top incomes of $187,000 for Pace graduates. According to that article, “the Ivy League isn’t the only path to big bucks.”

FOR IMMEDIATE RELEASE

Contact: Chris Cory, Pace, 917-608-8164, 212-346-1117, ccory@pace.edu

Pace University named to Forbes list of

“Colleges That Will Make You Rich”

Ranking maps what campuses add to salary expectations

NEW YORK, NY, September 1, 2010 – Pace University has been ranked by Forbes.com as one of the top 20 “colleges that will make you rich.”

The Forbes survey attempts to measure only what colleges and universities actually add to students’ salary expectations.

According to Forbes, to come up with the ranking their staff looked at factors like the average SAT scores of incoming students and the percentage of a student body that receives financial aid. Based on those background factors they then calculated how much one would expect graduates at each school to earn in their careers–and compared their actual earnings to that.

The average annual salary of Pace alumni 10 to 19 years after graduation is $85,031, according to data Forbes used from Payscale.com.

Other institutions in the top 20 include Dartmouth College, Williams College, Stanford University, the University of Chicago, and the University of California at Berkeley.

The results appear in a Forbes.com web feature in conjunction with Forbes’ education coverage, which also includes “America’s Best Colleges,” available online at www.forbes.com/colleges and in the August 30 issue of Forbes magazine.

High starting salaries, tooThe Forbes survey echoes previous findings from a PayScale/Business Week survey that found the starting median salary of recent Pace graduates was in the same league as that for graduates of Yale, Dartmouth, Harvard, Princeton, Stanford and Columbia. That survey found Pace graduates earning a starting median salary of $53,200, listed a mid-career median salary of $89,700 and found top incomes of $187,000 for Pace graduates. According to that article, “the Ivy League isn’t the only path to big bucks.”

Jody Queen-Hubert, Executive Director of Career Services, noted, “This shows the payoff from entering the job market with professional skills and being backed by the largest internship program in the metropolitan area. We’re proud to see this confirmation of what students get from Pace’s emphasis on strong academics and participation in hands-on learning.”

Professional education at Pace University

Since 1906, Pace University has offered professional education that combines liberal arts with practical experience and the advantages of the New York metropolitan area. A private university, Pace has campuses in New York City and Westchester County, New York. It enrolls more than 13,500 students in bachelor’s, master’s, and doctoral programs in its Dyson College of Arts and Sciences, Lienhard School of Nursing, Lubin School of Business, School of Education, School of Law, and Seidenberg School of Computer Science and Information Systems. www.pace.edu

“It’s Time” … To Announce Results of Pace University’s Largest and Most Successful Fundraising Effort

Pace University has concluded the most ambitious fundraising effort in its 104-year history. It’s Time: The Centennial Campaign for Pace University was publicly launched on April 24, 2007 with a goal of $100 million. Pace raised $101,096,941 in cash and pledges since the campaign’s inception in 2003.

Media Contact: Samuella Becker, Pace Public Information, 212-346-1637 or 917-734-5172, Sbecker2@pace.edu

FOR IMMEDIATE RELEASE

“It’s Time” … To Announce Results of Pace University’s Largest and Most Successful Fundraising Effort

  • Pace Raises $101 Million
  • Student Financial Aid Top Priority with $21 Million Raised for Scholarships
  • $15 Million Gift Establishes Seidenberg School of Computer Science and Information Systems
  • 16 Single Gifts of $1 Million +
  • 6,417 First-Time Donors

NEW YORK, July 26, 2010 – Pace University has concluded the most ambitious fundraising effort in its 104-year history.

It’s Time: The Centennial Campaign for Pace University was publicly launched on April 24, 2007 with a goal of $100 million. “Since the start of the campaign, more than 16,813 individuals and organizations – including 12,365 alumni – have stepped forward to make critical investments in the school,” said Pace President Stephen J. Friedman. “This is truly inspiring and a vote of confidence in the University!”

Pace raised $101,096,941 in cash and pledges since the campaign’s inception in 2003. “The fact that we had reached the goal was first publicly announced on April 29th at our 47th Leaders in Management Awards dinner, which honored David J. Pecker, President and CEO of American Media, and Gurbaksh Chahal, Founder and CEO of gWallet,” said Christine Meola, Pace Vice President of Development and Alumni Relations.

Ivan G. Seidenberg (MBA ’81), chairman of the board and chief executive officer of Verizon Communications, donated the largest gift in Pace’s history, $15 million, which was awarded to the School of Computer Science and Information Systems in October 2005. One-third of his naming gift will support the Seidenberg Scholars Program, a program dedicated to recruiting and supporting top computing students from across the country. Seidenberg, a member of the Pace Board of Trustees, chaired the It’s Time campaign and led the 17-member Campaign Executive Committee.

Other noteworthy naming gifts:

  • The Dyson Foundation awarded Dyson College a gift of $7.5 million.  $5 million was directed to the renovation of the science labs on the Pleasantville Campus, $2 million funds scholarships in psychology, communications and media, performing arts, fine arts, and environmental science and environmental studies, and $500,000 created the Dyson Student Opportunities Fund, which funds special activities for students.  This was the largest of the gifts marking the Foundation’s 50th Anniversary and reflects a partnership between the Dyson family and Pace that began 75 years ago in 1930 when Charles H. Dyson graduated.  Dyson became a pioneer in leveraged buyouts, was founder of the privately held investment firm Dyson-Kissner-Moran, undertook government assignments during the administration of Franklin D. Roosevelt, and served as Chairman of Pace’s Board of Trustees.
  • The Wilson Center for Social Entrepreneurship was launched with a $5 million pledge from Helene (BBA ’66) and Grant Wilson, Boston-area entrepreneurs and philanthropists whose involvement with nonprofit organizations has convinced them that more entrepreneurial management can help these organizations increase their impact.
  • The Carl and Lily Pforzheimer Foundation made a gift of $2 million toward the Pforzheimer Honors College Endowment.  The Pforzheimer family has made many contributions to the betterment of Pace University over the past 47 years. The investment banker Carl H. Pforzheimer III is a trustee emeritus and was chair of the board from 1990 to 1999; his mother, Carol, a trustee emerita, served on the board from 1973 to 1979.

Additional Campaign highlights:

  • Trustees of Pace have collectively contributed more than $23 million to date, demonstrating their bold leadership and commitment to this historic effort.
  • 16 single gifts of $1 million or more, reflecting Pace’s ability to inspire gifts of remarkable generosity.
  • 6,417 first-time donors to the University, including 4,360 alumni who contributed $35.6 million.
  • $21 million raised for scholarships
  • $800,000 earmarked for Pace’s Division II sports programs, including scholarships and capital improvements to athletic facilities
  • An earlier Pace campaign, launched in 1995 and concluded in 2000, raised $61 million over a five-year period. The goal of that campaign was $55 million.

What’s next?  According to Friedman, “The conclusion of the Centennial Campaign doesn’t mean the end of our efforts to seek support to make Pace a better university. On the contrary, it signals another new beginning.  Our graduates are making a difference in every field and profession, ranging from the arts to business to healthcare to environmental law. Thus we will continue to press forward as we seek support for implementing the vision laid out in our new Strategic Plan … and moving Pace to a new level of excellence over the next five years.”

About Pace: For 104 years Pace University has produced thinking professionals by providing high quality education for the professions on a firm base of liberal learning amid the advantages of the New York metropolitan area. A private university, Pace has campuses in New York City and Westchester County, New York, enrolling nearly 13,000 students in bachelor’s, master’s, and doctoral programs in its Lubin School of Business, Dyson College of Arts and Sciences, Lienhard School of Nursing, School of Education, School of Law, and Seidenberg School of Computer Science and Information Systems. www.pace.edu

Nobel Economist Robert Engle to speak at Pace University Henry George Symposium

Nobel Economist Robert Engle, PhD, will speak on “Risk and Globalization” at Pace University’s downtown Manhattan campus Wednesday, November 14 at 6 pm.

MEDIA ADVISORY

November 6, 2007

Contact Bill Caldwell, Office of Public Information, Pace University, (212) 346-1597, wcaldwell@pace.edu

Nobel Economist Robert Engle
to speak on “Risk and Globalization”
at Pace University downtown campus
Wednesday, Nov. 14

Nobel Economist Robert Engle, PhD, will speak on “Risk and Globalization” at Pace University’s downtown Manhattan campus Wednesday, November 14 at 6 pm.

Engle is the fourth Nobelist in recent years to appear in a series sponsored by the Lubin School of Business at Pace, the Henry George Symposium. Past speakers have included Robert Mundell, Joseph Stiglitz and Edmund Phelps. The series is arranged by Pace management professor Robert Isaak, author most recently of “The Globalization Gap” (Prentice Hall, 2005).

Engle, a professor in the management of financial services at New York University, won the Nobel prize in economics (together with Clive Granger) for research analyzing how to see through non-stationary time-series via the “ARCH models.” His approach has had widespread applications in analyzing the risk of underlying financial assets given their volatility, helping practitioners in asset pricing and in evaluating portfolio risk.

WHERE AND WHEN: One Pace Plaza, Multipurpose Room, downtown New York City campus (east of City Hall), 6 p.m. Wednesday, November 14, 2007.

Open to the public. RSVP to Lucille Kenny, lkenny@pace.edu . Media admission by press card.

Pace’s Lubin School of Business holds an elite distinction shared by fewer than three percent of business schools worldwide – accreditation for both business and accounting by AACSB International. Approximately 4,000 students are enrolled in the school’s undergraduate and graduate programs in Downtown and Midtown New York City and Pleasantville and White Plains in Westchester County, New York. www.pace.edu/lubin.

The private metropolitan university of which Lubin is part, Pace University, combines exceptional academics, practical experience and the New York area “edge.” It enrolls more than 13,500 students in bachelor’s, master’s, and doctoral programs in the Dyson College of Arts and Sciences, Lienhard School of Nursing, Lubin School of Business, School of Education, School of Law, and Seidenberg School of Computer Science and Information Systems. www.pace.edu.

“Identity Theft and Financial Fraud for the New Millennium”

Pace’s Seidenberg School is hosting this luncheon and lecture, “Identity Theft and Financial Fraud for the New Millennium,” as part of the University’s centennial celebration.

MEDIA ADVISORY

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

Note: Members of the media must RSVP to attend. Email wcaldwell@pace.edu

Admission by press credential. Speakers will be available for interviews immediately following the event.

October 25, 2006

“Identity Theft and Financial Fraud for the New Millennium”

Pace University Luncheon and Lecture,

Thursday, October 26

Featuring security expert Hal Berghel, head of UNLV centers for identity theft and financial fraud; and authentication software expert Mark Kay, CEO, StrikeForce Technologies, former CIO, JPMorganChase & Co.

WHO: Keynote speaker is Hal Berghel, Associate Dean, Howard R. Hughes College of Engineering, University of Nevada, Las Vegas, and Founding Director, UNLV Center for Cybermedia Research and Identity Theft, and the Financial Fraud Research and Operations Center. Berghel will discuss the latest computing and law enforcement perspectives on identity theft and financial fraud. Topics: credit/debit card scams and related technologies like keystroke logging, skimming, and double-scanning; fungible credentials, counterfeiting, digital forgery and credential amplification; advantages and disadvantages of anti-counterfeiting technologies; tactics for hiding data; and what disk wiping doesn’t do (well). Actual illustrations of identity theft and financial fraud taken from law enforcement case files will be presented. Demonstrations will be given of software and hardware developed in Berghel’s research center.

Mark Kay, CEO, StrikeForce Technologies, Inc., a software company in Edison, N.J. that develops unique authentication software to help prevent identity theft. StrikeForce Technologies is gifting Pace University $50,000 value of its ProtectID™ and GuardedID® products for classroom educational purposes. Kay is a member of the Advisory Board of the Ivan G. Seidenberg School of Computer Science and Information Systems at Pace University, and a former Chief Operating Officer, Chief Information Officer, Global Technology Auditor, and Managing Director of JPMorganChase & Co.

WHAT: Pace’s Seidenberg School is hosting this luncheon and lecture, “Identity Theft and Financial Fraud for the New Millennium,” as part of the University’s centennial celebration.

WHEN: Thursday, October 26, 12-2pm

WHERE: Pace University, 163 William Street, 2nd Floor, New York City.

Web sites:

Ivan G. Seidenberg School of Computer Science and Information Systems,

Pace University

http://www.csis.pace.edu

StrikeForce Technologies, Inc.

http://www.strikeforcetech.com

UNLV Center for Cybermedia Research and Identity Theft, and Financial Fraud Research and Operations Center

http://ccr.i2.nscee.edu

Market Uncertainties Unlikely to Hurt Economy of Downtown Manhattan, Says Developer of Pace Index

Job cuts at large Wall Street firms do not mean the economy of downtown Manhattan is headed for a fall.

FOR IMMEDIATE RELEASE

Contacts:

Farrokh Hormozi, Ph.D., Pace University, 914-422-4285, cell 646-644-2367, fhormozi@pace.edu

Tom Schuyler, M. Booth & Associates, 212-539-3223, cell 646-344-9427, toms@mbooth.com

MARKET UNCERTAINTIES UNLIKELY TO HURT

ECONOMY OF DOWNTOWN MANHATTAN,

SAYS DEVELOPER OF PACE UNIVERSITY INDEX

Disputing gloom, economist finds “slight dip” in recent data an “aberration.”

New York, NY, October 23, 2007—Job cuts at large Wall Street firms do not mean the economy of downtown Manhattan is headed for a fall.

That bullish forecast is based on the latest Pace Downtown Index (PDI), a composite of weighted economic indicators for the area south of Canal Street developed by Pace University three years ago. The Index has regularly come up with findings that are supported several months later by data from federal and local agencies.

The third quarter PDI was fractionally down from the second quarter – by 0.05 points, to 106.27. However it was still higher than its first quarter value of 106.21.

Moreover, “looking at the long-term trend line, at this point we may consider the reversal an aberration which will soon pass,” writes Farrokh Hormozi, Ph.D., the Pace economist who supervises the index, in the latest report on the data page.cfm?doc_id=10618.

The reason is real estate, Hormozi says. “So far, the Lower Manhattan economy has been relatively immune to the bursting of the real estate bubble and is largely unaffected by the sub-prime default problem: an area where the average weekly income is over $8,000 cannot be the target of loan-sharks and teaser rates.”

The “slight dip” “shows resilience in the face of harsh problems facing the financial markets,” Hormozi writes. Despite the dip, the third quarter economy of lower Manhattan grew “better than the economies of both the City of New York and the country as a whole.”

Hormozi adds that those who now see gloom ahead include many who thought Downtown would never recover from 9/11.

The PDI’s statistical weightings gauge the relative influence on the downtown economy of not just the financial markets and the overall Gross City Product, but also of changes in the total commercial real estate vacancy rate. The raw real estate data is supplied by Cushman & Wakefield.

The PDI report will be available before 2pm by contacting Tom Schuyler to request a copy be sent, after 2pm it will be available online at /emplibrary/ACFB4A.pdf.