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Tuesday, October 23, 2012

Bank of Canada Concerned About Rise in Household Debt

The Bank of Canada today raised concern about increasing household debt in the country, signaling it could soon start hiking interest rates to slow borrowing, the opposite stance taken by the U.S. Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), and the Bank of England (BOE). While Canada’s central bank left its benchmark overnight rate at 1 percent for a 25th consecutive month, Governor Mark Carney said “some modest withdrawal of monetary policy stimulus will likely be required.” Canada, whose financial and housing sectors weren’t harmed during the global crisis, has seen consumer debt rise to 165.8 percent of disposable income in July, higher than where it was in the U.S. before the bubble burst. Consumption has led the quick recovery in the nation, fueling speculation that it could come to a halt should households decide to focus on repaying their debts. Even still, the economy is doing well, with a growing labor force and rising wages.

Qatari Emir First Country Leader to Visit Gaza Since International Blockade

Qatar’s Emir, Sheikh Hamad bin Khalifa Al Thani, became the first country leader today to visit Gaza since the international blockade on the Palestinian territory began in 2006, partly in response to the election of Hamas, a group considered to be a “terrorist organization” by the U.S., the E.U., and Japan. The emir was there to inaugurate a $400 million project to rebuild Gaza, whose isolation has contributed to impoverishing it. Gaza was also partially destroyed during a 22-day operation by the Israeli military between December 2008 and January 2009. It is thought that Qatar is attempting to extend its influence over Hamas as the group, which kept close ties with Syria, distanced itself from the regime of Syrian President Bashar al-Hassad. The emir, who will also meet with Hamas officials, will not go to the West Bank, which is under the rule of Fatah, a political group with its roots in revolutionary struggle which is not regarded as a terrorist  organization by western powers.

No Offensive to Reclaim Northern Mali Before 2013, Officials Say

There will probably not be an attempt to take Northern Mali from rebel groups before 2013, western officials said today. While African Union members are due to discuss plans for an offensive tomorrow in Ethiopia’s capital Addis Ababa, diplomats say it is unlikely they will secure a resolution at the United Nations (U.N.) for months after that. Tuareg groups who rose against the government earlier this year were joined by Islamists organizations. They are now controlling the north of the nation, which has prompted western authorities to warn against a potential terrorist threat. French President François Hollande called last month for swift military intervention, as the concern is now that Mali could turn into another Afghanistan, harboring terrorists that will act in the region and beyond. France is planning to send surveillance drones over West Africa and has been in secret talks with the U.S. about Mali. Countries will attempt to create a military and political plan to resolve the issue.

Spain’s Premier Rethinks Austerity

Spanish Prime Minister Mariano Rajoy said today that he sees how austerity measures could be undermining tax revenue by fueling the recession. “Things could be done more calmly, taking into account especially that we are in a recession,” he admitted before Spain’s Senate. “But in any case I can’t give up on Spain’s commitments.” His words came after Budget Minister Cristobal Montoro vowed to stick to the budgetary plan set in motion at the behest of the European Union (EU), even after the Bank of Spain reported a fifth straight quarter of economic contraction and warned it will get worse. The EU said Spain’s government budget should shrink to 6.3 percent of gross domestic product in 2012, down from 9.4 percent last year. Meanwhile, Economy Minister Luis de Guindos told the parliament foreign investment is returning to Spain, thanks in part to the nation’s commitment to preserving the euro.

U.S. Presidential Debate Showed Aggressive Obama, Defensive Romney

The third and last debate in the 2012 U.S. presidential campaign showed an aggressive President Barack Obama leading the conversation, with his Republican opponent Mitt Romney struggling to keep up. The candidates focused on foreign affairs, facing questions about their stances on Libya, Syria, Israel, Iran, Afghanistan, and China, as well as their plans to ensure national security. Romney appeared to mostly agree with the President on his foreign policy, from his non-intervention in Syria to his strategy of diplomatic sanctions to counter Iran’s nuclear program. He also seemed to endorse Obama’s plan to pull out of Afghanistan by 2014, adding that he will carry it out if elected. Obama sought to demonstrate that Romney, the former governor of Massachusetts, is not ready to become commander-in-chief, describing his opinions on foreign policy as “all over the map” and “wrong and reckless.” He also suggested Romney’s views on the world are outdated after the Republican candidate said Russia, not Al Qaeda, is the biggest threat to U.S. security: “the 1980s are now calling to ask for their foreign policy back,” the President quipped. Obama also reminded Romney methods of warfare have changed. In response to Romney’s criticism that the U.S. Navy has now less ships than it did in 1917, Obama said: “we also have fewer horses and bayonets.”

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