1. Class #4 Last class in Spain

2. Brian David Butler Professor of international finance and global entrepreneurship with Forum-Nexus Study Abroad. Guest lecturer with the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan . Previously, Brian taught finance, economics and global trade courses at Thunderbird’s Global MBA program in Miami, and worked as a research analyst with the Columbia Business School in New York City. Brian currently lives in Recife, Brazil where he is teaching classes at the university Faculdade Boa Viagem . A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North America. [email_address] LinkedIn/briandbutler Skype: briandbutler

3. Brian Butler is a specialist in international economic analysis, and is founder of the prestigious “GloboTrends“ ( www.globotrends.com ) online economics site, which has been featured as syndicated content on Nouriel Roubini’s RGE Monitor, Emerginvest.com, Business Week Exchange, Wikinvest.com, and other leading news outlets. http:// globotrends.pbworks.com / , http:// blog.globotrends.com /

6. Review…

7. Who can tell me… what is the difference between a liquidity crisis, and a solvency crisis for banks?

8. Liquidity Solvency Money flows? Enough $? (to cover short term debts?) (more than expenses?) Who can tell me… what is the difference between a liquidity crisis, and a solvency crisis for banks?

9. Competitive Devaluations Dr. Kishore Dash, January 20, 2007 “ Beggar thy neighbor” Last class we talked about “competitive devaluations”… what did we mean? When was this a problem? What is the danger?

10. http://mohammedfikri.files.wordpress.com/2010/02/bretton_woods_sign.jpg Who can tell me what happened at Bretton Woods ? Did the financial world become more or less stable afterward? When did it fail? Why?

18. What will the future hold? ….Fixed vs. Flexible ?

21. Mundell Trilemma Decisions countries must make…

30. International money markets Arbitrage + international money markets

32. New problem…

33. Question: If you were a US based investor, with dollars to invest for 12 months…..where would you choose to deposit your money (to make the most return)? Note: You can assume you have an account with a bank in London (HSBC, etc)… and its easy to switch from one account to the other (click of a button)

34. Where would you invest?? International Money Market Rates (Bid Side) United States dollar England sterling Europe euro Switzerland franc Japan yen Eurocurrency Rate LIBOR 12 months 3.2% 6.0% 5.3% 3.2% 1.1%

35. Right?? … maybe not!! International Money Market Rates (Bid Side) United States dollar England sterling Europe euro Switzerland franc Japan yen Eurocurrency Rate LIBOR 12 months 3.2% 6.0% 5.3% 3.2% 1.1%

38. Which would you choose now?? International Money Market Rates (Bid Side) United States dollar England sterling Europe euro Switzerland franc Japan yen Eurocurrency Rate LIBOR 12 months 3% 6.0% 5% 3.5% 1.1% Expected appreciation / depreciation vs. US Dollar to EQUATE choices… x -3% -2% -0.5% +1.9%

40. Controlling the economy 2 tools – monetary + fiscal policy

45. Monetary policy – to speed up economy (lower interest rates, print money) http://www.daily-bourse.fr/images/analyses/2009/03/30/Cartoon%20Emergency.gif