By Bob Blandeburgo Associate Editor Money Morning

On the last leg of his four-nation tour in Asia, U.S. President Barack Obama revived the issue of a still-pending free-trade agreement signed in 2007 with South Korea (KORUS FTA), but an auto trade imbalance will continue to be a major obstacle to Congressional approval.

At a news conference in Seoul, President Obama and Korean President Lee Myung-bak, both showed willingness to renegotiate elements of the deal and to have both countries ratify it as soon as possible.

“I am a strong believer that both countries can benefit from expanding our trade ties,” President Obama said. “I have told President Lee and his team that I am committed to seeing the two countries work together to move this agreement forward.”

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Don Miller, Associate Editor of Money Morning, reviews the process and implications of the Fed’s possible plan for raising intereste rates without actually raising the rate itself.

Don Miller (Money Morning): The U.S. Federal Reserve may take an unorthodox approach to raising interest rates by paying interest on bank reserves rather than relying on traditional open market remedies, as it exits from its long-term fiscal stimulus programs, Reuters reported today (Tuesday).

Paying interest on reserves is mostly untested and would represent an unexpected twist in the Fed’s response to the financial meltdown.

“In the old days … the Fed controlled the federal funds rate with open market operations,” Antulio Bomfim, a former Fed economist now with Macroeconomic Advisors LLC in Washington told Reuters. “Now, at least in this period when reserves are over-abundant, the way the Fed hopes to raise the federal funds rate will be primarily by raising

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By Bob Blandeburgo Associate Editor Money Morning

Stimulus measures in Japan helped the world’s second-largest economy grow at its fastest pace in more than two years, but it’s unlikely policymakers will reduce spending despite the nation’s rapidly growing debt.

Gross domestic product (GDP) in Japan grew at 4.8% annual rate in the third quarter, surpassing all the forecasts of 20 economists polled by Bloomberg News. That follows a revised gain of 2.7% in the three months ended June 30, according to Japan’s Cabinet Office. Japan’s economy grew 1.2% on a quarterly basis.

“The turnaround in public investment has definitely contributed to the rebound in GDP, so if they do start to cut it’ll weigh on growth,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG (NYSE ADR: CS), told Bloomberg.

Stimulus measures around the world helped Japan’s exports grow 6.4%, but as global economies withdraw stimulus measures,

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By Don Miller Associate Editor Money Morning

U.S. retail sales rose unexpectedly in October as vehicle sales rebounded from a deep slump. However, non-auto sales rose less than forecast, suggesting consumers remain cautious as unemployment surges amid a “jobless recovery.”

Sales at the nation’s retail outlets increased 1.4%, the Commerce Department said today (Monday), much better than the 0.9% increase projected by the median estimate of 66 economists in a Bloomberg News survey. But September sales were revised downwards to a 2.3% decrease from the previous estimate of a 1.5% decline.

Aside from automobiles, other sales rose just 0.2%. That increase marked the third month in a row that sales rose, but failed to meet the 0.4% climb economists had predicted.

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Except for Japan, the growth in ETF assets is looking a little stale compared to the rest of the world. But on the plus side, U.S. investors still enjoy some of the best bargains to be found.

At least that’s what a new Barclays Global Investors study reveals. The research team led by Deborah Fuhr found that total U.S. assets in the ETF market hit an all-time high of $582 billion at the end of the second quarter, its highest mark since December 2007.

Interestingly, however, the number of U.S. ETFs, pegged at 706 from some 22 providers on three exchanges, is smaller than its European counterparts, which account for 753 ETFs for assets estimated at $183 billion.

According to Barclays, U.S. ETF assets have risen by more than 17 percent on the year – which is more than the 10 percent rise seen in the MSCI U.S. Index in dollar terms in

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Why Is Beijing Investing $200 Billion in One Company? The answer is simple. This rail company hauls 25% of the world’s freight – but it only has 6% of the world’s track. Right now, freight supply is 65% shy of demand. Sales for this company have grown on average 47% over the last five year. And now, with a $200 billion infusion, it’s about to jump even higher. Estimates show the potential gains at 356%. Click here for the full report.

By Bob Blandeburgo
Associate Editor
Money Morning

The much-anticipated earnings report from Wal-Mart Stores Inc. (NYSE: WMT) and new data from the U.S. Department of Commerce yesterday (Thursday) showed that consumers are not only reeling in their discretionary spending, but may also be pulling the reins on the necessities.

Retail sales fell 0.1% in July from the previous month, and 8.3% from a …

Inflation-Proof Savings Account Could Pay 100% “Interest” this Year Euro Pacific Capital President Peter G. Schiff has identified a savings account that could yield 100% interest between now and the end of the year. It’s much safer than a regular account, and fully insured by Lloyd’s of London. Since every dollar of your savings is fully backed by gold bullion held in specialized vaults outside of Zurich, you could easily double your money as gold prices rise. And that means it’s a great way to protect your money from inflation, a falling dollar, geopolitical instability and even government stupidity! Go here for Schiff’s complete report.

By Bob Blandeburgo

Associate Editor

Money Morning

Prices for single-family and condominium homes in the second quarter fell by a record 15.6% and 19.8% year-over-year in the United States, mainly due to foreclosures.

While the data taken on a national average may be disheartening, the …

Deflation and the price of Gold. Give yourself an extra point for spotting the trick question. It’s already tripping up plenty of would-be answers. Because gold must fall during deflation, since it rose so much during the inflation of the 1970s – right? “Gold Prices, in real inflation-adjusted terms, unsurprisingly tended to increase during inflationary times,” nods one commentator, writing in London but posted at the strong>Business Times in Singapore. “Its purchasing power tended to sag during depressions and deflation.”

The source for this claim? Besides syllogism (”The ’70s gave us inflation and a gold bull market; ergo, the opposite must be bad for gold…”) it was apparently Roy Jastram’s The Golden Constant, that dry, dusty study of gold’s enduring stability across the very, very long run by the end of which we will all be deader than disco.

First published by Wiley in 1977, The Golden Constant has

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By Jason Simpkins Associate Editor Air China announced yesterday (Wednesday) that it will buy 45 The Boeing Company (BA) jets to help cover increased domestic demand at a time when many Western airlines are struggling to overcome high fuel prices and declining traffic. Air China will buy 15 Boeing 777s and 30 Boeing 737s at a cost of $6.3 billion, the company said on its website. The purchase will increase Air China’s fleet by 35%, as the company competes with other Chinese carries for a dominant share of a market that is expected to grow 9% annually over the next several years, The Associated Press reported. Whereas commercial airlines in developed markets have been struggling, with some even collapsing under the weight of high fuel costs and sluggish demand, airplane manufacturers have been buoyed by strong demand in emerging markets ...

By Jason Simpkins Associate Editor Brazilian stocks as measured by the country’s Bovespa benchmark stock index has fallen 20% from its May 20 record, but that doesn’t mean it’s time to give up on Latin America’s largest economy. Brazil still has plenty to offer, and with stock valuations low, it’s a good time to go bargain hunting. In fact, a big reason why Brazilian stocks have dropped is because the country’s central bank has been forced to raise rates to curb inflation. Policymakers have raised the benchmark rate twice since April, to 12.25%. Of course, inflation isn’t a problem unique to Brazil. Inflation in India has been at alarmingly high levels since the first week of June, when it jumped from 8.75% to 11%. And many analysts expect government data released today (Friday) will show wholesale prices soared to a 13-year high of ...