(CNN) – It’s not for nothing economics is called “the dismal science,’ so leave it to an economist to rain on today’s royal wedding in London.
As tens of thousands of tourists flock to London and hundreds of millions more watch on television and online, the assumed wisdom is that the influx of tourist dollars and attention will be good for the struggling UK economy.
Indeed, PricewaterhouseCoopers estimates that the city of London will reap £107 million ($177 million) commercially from the influx of revelers. Retail researcher Verdict estimates the boost to the UK economy could approach $1 billion.
Estimates of actual costs of the wedding vary wildly (and the royal family is reportedly paying most of the costs privately) but the security costs are estimated to hit £20 million ($33.2 million), according to the Daily Mail.
But the real cost to the British economy could be a 0.1% hit to UK GDP this year – “if you want to monetize that … that comes something between £1.5 billion to £2 billion ($2.5 billion to $3.3 billion),” said Philip Shaw, chief economist at Investec.
This week we have been talking about the shift in global power and the ascendancy of China. There is no getting away from this fact – China will eventually overtake the U.S. as the largest economy – and both sides have to live with each other.
Nowhere can that be seen more clearly than the $1 trillion dollars in U.S. government debt owned by the Chinese.
The U.S. has needed the Chinese to fund its overspending and trade imbalance. The Chinese can't afford for the debt to become tainted by reckless U.S. deficits.
The two countries are stuck with each other – and that will become ever clearer in the years ahead. they are called the G2 – for one reason. Who needs who? They need each other.
This week's Q&A will tackle the speed of China's ascent: can they overtake the U.S. by as early as 2020?
Last week's Q&A - in case you missed it:
By Ali Velshi
In a tragic new twist on "the gunshot heard around the world", the tragedy in Arizona has people around the world talking about the political tone in the U.S., how the U.S. deals with the mentally ill and, of course, guns. Much of the world still looks to the U.S. as a country which, strangely to some, affords it's citizens constitutional protection to be armed to the teeth. But how DO America's gun laws compare to those of other countries, and what effect have different gun laws had on crime?
In the first Q&A of the year, Richard Quest and I will take a different approach. We'll offer our thoughts on guns and laws. Then, instead of The Voice asking us questions, we'll tell each other – and you – what we've learned about gun laws around the world.
Tune in at 2:22p EST / 20:22 CET.
2010 was a whirlwind year for the world’s markets and economies.
Greece and Ireland suffered economic bailouts to avoid taking down the rest of Europe.
While Europe stumbled and the U.S. sputtered on the road to recovery, oil, gold and other commodities are back at record highs, fueled by growth in places like China, Brazil and India.
America’s banks were forced to halt or delay home foreclosures over shoddy paper work, prolonging the U.S. housing malaise, but mortgage rates hit record lows.
Globally, unemployment continues to fester, as workers everywhere wake up to changing labor needs in an increasingly inter-connected and automated global market place.
With stocks in the U.S. rallying to two-year highs and housing prices there perhaps stabilizing, could 2011 be the year it all starts to turn around?
Watch Quest and Ali duke it out over THEIR predictions for your money in 2011
Britain's Prince William asked his girlfriend Kate Middleton to marry him
The role of royalty in a democratic age. Unelected, some believe unnecessary. But still loved, and revered by so many others.
The role of royalty in an austere age. Outdated and expensive, some critics might say. But for many the source of a welcome good news story. This week’s events in the UK are testament to that.
Royalty divides opinion. A select few born into a life of privilege. A life steeped in tradition, tangled up with history, national pride, rarely affording the chance of a “normal life”.
There’s no doubt the world’s monarchies are never out of the spotlight, and we lap it up. And it’s always been that way. Think of the age-old legends, the royals with blue blood, the princess so delicate she can feel a pea through 20 mattresses, the bleak Russian rumors of the missing Romanov sisters. Our fascination with the royals is as old as the sprawling dynasties themselves.
This week’s Q+A will be delving into this global obsession. Tune in Thursday to watch and leave us ideas for next week’s Q & A in the comments section (right underneath here).
We buy GOLD
by Ali Velshi
Gold is back in vogue; and, perhaps the gold standard is next. I'm talking about a monetary system whereby central banks value their currencies to a fixed weight of gold. That's the system we had in the United States until Presdient Richard Nixon took the U.S. dollar off it in 1971. Since then, the Federal Reserve has managed the money supply by swinging from raising interest rates and pulling back buying up debt to printing money and lowering rates depending on the Fed's read of the economic situation.
Now, World Bank president– and former high official at the U.S. Treasury– Robert Zoellick says we need to go back to some sort of gold standard to guide currency movements involving the U.S. dollar, the euro, the British pound, the Japanese yen, and China's currency, the renminbi. Zoellick's system would employ gold as the international reference point on inflation and deflation levels, and of course, currency values. The advantage of a gold standard system is long-term price stabilty; it limits the power of governments to go out print money whenever it wants to.
And, as we go into the G20 conference in Seoul, that message will become more attractive, as big exporters like Germany and China blast the U.S. Fed for injecting 600 billion dollars into the financial system. As German finance minister Wolfgang Shauble puts it: "It's not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar artifcially lower with the help of their printing press."
The Americans wouldn't have that luxury under a gold standard system. The question is would the U.S. be willing to cede that authority to gold?
Tune in Thursday at 2pm EST and 2000 CET for Quest and Ali's Q&A-style news quiz this week? Watch it unfold and take a bet on who will wint this week's Q&A.
The Bank of England also has done quantitative easing
First a big cruise liner…now a big economic gamble. The U.S. Fed’s decision to print an extra $600 billion takes America and the rest of the world into unchartered territory. We know why Bernanke did it. To try and stop deflation from undermining the U.S’s fragile recovery. But it’s a risky business, and we don’t yet know if it will pay off. On this week’s Q&A, Quest and Ali do battle over just how exactly you create money from nothing, and whether it can end the economic downturn. Tune in tonight, Thursday to watch and leave us ideas for next week’s Q & A in the comments section (right underneath here).
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.