Hanoi, Vietnam (AHN) – Inflation surged by 23 percent in Vietnam in August, the highest rate in Asia.

Vietnam’s consumer-price inflation index rose by 23.03 percent compared to the same period last year, according to the country’s General Statistics Office (GSO). In July, the CPI rose by 22.16 percent.

A representative for the General Statistics Office attributed the increases to higher prices for food and fuel, with prices for food and drink increasing by a whopping 34 percent. In addition, dollar-pegged currencies are causing more inflation in prices of many commodities as the U.S. dollar continues to weaken.

The increase in CPI came despite actions taken by the central bank and the government to tighten monetary and fiscal policy to curb inflation and stabilize the economy.

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Washington, D.C., United States (AHN) – The U.S. Federal Reserve promised on Tuesday that it would hold interest rates at record lows for at least two years. The Fed had held on to the record-low key lending rate since December 2008 to help boost the American economy.

The decision was based on a 7-3 vote, which was the first time in 20 years that three Fed members dissented. The three members who dissented were Federal Reserve Bank of Dallas President Richard Fisher, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota and Federal Reserve Bank of Philadelphia President Charles Plosser.

Besides holding the interest rate until the middle of 2013, the Fed said it would consider additional measures to support the weak American economy, worsened by Standard & Poor’s downgrade of the country’s credit rating last week to AA+ due to the impasse on the debt limit issue.

The stock market, which dipped following the S&P downgrade, made a dramatic rebound on Tuesday after the Fed announcement. The Dow Jones industrial average ended up by 429 points, which was almost a 4 percent rise – the largest increase in two years.

The Fed policy gave American companies and consumers with more certainty about the availability of low-cost borrowing for major purchases such as vehicles or homes. At the same time, it is expected to encourage investments and risk-taking to convince the markets that the cost of borrowing will not go up for at least two years.

However, the policy is an indicator that the U.S. economy will continue to crawl until the end of President Barack Obama’s first term in office, while wages will remain stagnant and high unemployment rate will continue.

With the policy on benchmark lending rates out, investors are waiting if the Fed would also announce a new round of quantitative easing. The Fed has carried out two rounds of federal stimulus programs, but apparently is hesitant to further pump prime the economy over fears that it would have little impact and could even be inflationary.

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Washington, D.C., United States (AHN) – The U.S. Federal Reserve would likely keep the record-low interest rates, Treasury markets indicate.

According to a Federal Bank of Cleveland study, the U.S. economy is forecast to grow by only 1.1 percent in the 12 months ending June 2012. That rate is less than half of the central bank’s current forecast and would likely result in delaying any key lending rate increase.

The Fed has held benchmark interest rates from zero to 25 basis points since December 2008.

Given the slower growth of the American economy, analysts said that the Fed is not likely to hike interest rate until June next year. That would make it the longest period that the central bank has held on to a low key lending rate since the 1940s when the Fed was forced to buy Treasuries.

From 1937 through 1947, the Fed kept its rediscount rate at 1 percent. It was the last time the American central bank maintained a prolonged monetary support for the ailing U.S. economy.

Another restraint to the expansion of the U.S. economy would be spending cuts to be agreed by U.S. President Barack Obama and Congress before the Aug. 2 deadline to hike Washington’s debt limit of $14.3 trillion.

However, analyst said the biggest hindrance to raising the overnight lending rate from almost zero would be the U.S. economy’s failure to create more jobs. The recession and the global financial crisis led to the loss of 8.7 million jobs in the U.S. in 2008 and 2009. In 2010, only 1.7 million jobs were created, resulting to national unemployment rate rising to 9.2 percent in June from 8.8 percent in March.

Fed Chairman Ben Bernanke placed a condition of sustained period of strong job creation as a basis for declaring an economy recovery. That translates into a gross domestic product growth rate between 2.7 to 2.8 percent.

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Washington, D.C., United States (AHN) – More Americans continue to save in banks rather than borrow money from financial institutions. According to latest data from the Federal Reserve, savings in U.S. banks hit a record $1.45 trillion in May.

The growing savings has been observed since the global financial crisis in 2008.

A similar trend was observed in Japan, where the gap between savings and borrowing is at an all-time high.

Japanese banks use the money to purchase bonds to help keep yields the lowest in the world even if Tokyo has more outstanding debts than the U.S. and a lower credit rating.

Before 2008, U.S. deposits exceeded loans at an average of $100 billion.

Because of the worst recession experienced in the U.S. since the 1930s, consumers trimmed household debt to $13.3 trillion from the 2008 peak of $13.9 trillion. The reduction resulted in savings going up 4.9 percent of income from 1.7 percent in 2007.

For the same period, banks reduced lending amid over $2 trillion in losses and writedowns. Rather than grant more loans, American financial institutions instead bought Treasuries and government-related debt, which boosted their holding of such instruments to $1.68 trillion from $1.08 trillion in early 2008.

Economists forecast it would take the U.S. and Japanese economies at least a decade to extricate themselves from the mess of being a debt-ridden society.

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Amstelveen, Netherlands (AHN) – Dutch carrier KLM on Wednesday said it would begin using used cooking oil for some of its flights. The announcement comes less than two years after the airline flew the first biokerosene-fueled passenger flight in Europe.

Used cooking oil from factories and hotels will fuel KLM flights between Amsterdam and Paris beginning September. According to the airline, the fuel will meet the same technical specifications as those of conventional kerosene. No changes to engines or aircraft infrastructure will be required to use the new fuel.

Approval for the use of biofuel in aviation is expected soon in Europe. KLM, the world’s oldest airline operating under its original name, hopes the move will result in a positive recommendation from the Sustainability Board of the Netherlands.

KLM launched the first plane powered with biokerosene on the continent in November 2009 when it flew a select group of passengers with one engine running on 50 percent used cooking oil and 50 percent aviation kerosene.

Other carriers are similarly exploring the use of biofuels to improve sustainability and lower carbon emissions.

Continental, Japan Airlines and Virgin Atlantic are among those that have tried using fuel sustainably made from sources such as algae, coconut oil and jatropha.

Brazilian airline TAM partnered with Airbus last year to become the first to fly a biokerosene-fueled plane in Latin America.

KLM’s biokerosene is supplied by SkyNRG and made by Dynamic Fuels, a United States-based joint-venture of Tyson Foods and Syntroleum Corp.

Dynamic Fuels operates a plant in Louisiana that is recognized as the first U.S. industrial-scale production facility for biofuels. The company makes fuel from animal fats such as inedible porcine fat, vegetable cooking oil used in frying, fat from wash water in beef rendering and from factory cooking operations, and unrefined, inedible soybean oil produced from the refining process.

KLM, which merged with Air France in 2004 and has led among airlines in the Dow Jones Sustainability Index, said many factors affect the level of sustainability of biofuels. It ensures the quality of its biokerosene with advise from the Sustainability Board, which includes the Dutch wing of the World Wide Fund for Nature (WWF) and the Copernicus Institute of the University of Utrecht.

The carrier made clear its support for the WWF’s Energy Report, which says alternative fuels made from biomass are the only appropriate replacement for fossil fuels for sectors such as the airline industry.

“The route to 100 percent sustainable energy is enormously challenging,” managing director Camiel Eurlings said in a statement. “The costs of biofuels need to come down substantially and permanently. This can be achieved through innovation, collaboration and the right legislation that stimulates biofuel in the airline industry, but with an eye on honest competition. We really need to move forward together to attain continuous access to sustainable fuel.”

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Beijing, China (AHN) – China has agreed to end subsidies of its wind power manufacturers that use domestic parts instead of imports, which violate World Trade Organization (WTO) rules and give Chinese firms an unfair advantage over U.S. manufacturers.

A complaint to the WTO filed by the United Steelworkers prompted China’s move, according to U.S. .Trade Representative Ron Kirk.

The end of subsidies by China’s government provides a more level playing field for U.S. wind turbine manufacturers to compete with Chinese products.

Kirk also criticized China for evading its transparency commitments by failing to provide the WTO with information about its subsidy programs on a regular basis. He said that because China is the second largest WTO trader that it is not acceptable for China to evade providing the WTO with the information.

However, critics say that China’s renewable energy manufacturing sector has grown so large that it is now so powerful that ending the illegal subsidies that allowed it to grow so large will not help other nations much to compete against Chinese manufacturers in the world market.

China’s Special Fund for Wind Power Manufacturing illegally gave individual grants of up to $22.5 million to Chinese manufacturers who agreed to use Chinese-made parts in the manufacturing of wind turbines, according to a case filed last year by the United States at the WTO.

The U.S. filed the suit so U.S. manufacturers could have an opportunity to supply parts to Chinese manufacturers.

The issue is especially important now as the U.S. struggles to create more jobs and close the huge trade gap with China.

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Washington, D.C., United States (AHN) – The Obama administration has found an unexpected ally in a ratings agency in the White House’s battle with Republican legislators over spending cuts and hiking the federal debt limit. On Thursday, Moody’s warned that it may downgrade Washington’s credit rating if the U.S. debt ceiling is not hiked soon.

Moody’s said that the U.S. credit rating could downgraded because of a very small, but increasing risk of a short-lived default, which would likely translate into higher interest rates at a time when the country’s recovery is again on the slow lane.

The ratings agency anticipated there would be a political battle between the Obama administration and Republican legislators before the debt ceiling would be lifted, but Moody’s said that it failed to consider the worsening conflicting positions between the two parties. Washington wanted to raise the debt limit to $16.7 trillion from the current $14.3 trillion, but with no major spending cuts.

Moody’s warning came on the heels of a lower outlook by Standard & Poor’s of the AAA U.S. debt rating to negative from stable because of the political wrangling.

The House voted on Tuesday not to hike the federal debt limit without major spending cuts. At the Wednesday White House meeting of Republican legislators with U.S. President Barack Obama, the legislators asked the administration for a detailed plan on budget cuts to solve the impasse.

House Speaker John Boehner justified the lower house’s refusal to give in to Obama’s request because raising the debt limit beyond spending cuts would cost jobs for Americans. Obama, however, warned that failure to hike the debt limit soon would lead to dire consequences for the fragile, but recovering U.S. economy.

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Washington, D.C., United States (AHN) – The Republican-dominated U.S. House of Representatives, as expected, rejected a proposal to increase the federal debt limit without budget cuts on Tuesday.

On a 318-97 vote, the House turned down a proposal from the Obama administration to increase Washington’s debt limit to $16.7 trillion from the current $14.3 trillion.

All Republican legislators voted against the measure that would have hiked the federal debt limit to an amount enough to cover government bills until the end of 2012.

In rejecting the measure, the GOP said they would push for sharp spending cuts and binding budget process reforms, House Majority Leader Eric Cantor said.

Cantor cited survey results that majority of American voters do not favor increasing the debt limit without spending cuts. The legislator said American families and businesses want the federal government to live like the rest of the country does – that is to tighten their belts and step relying on credit.

Even some Democrats voted against the measure after some party members criticized the bill as a Republic political strategy because the Republic leaders brought the bill to a vote and then asked caucus members to vote against it.

The defeat of the measure was imminent despite the warning by the U.S. Treasury Department that the U.S. faces defaulting on its debt if Congress does not allow the federal government to borrow more by August.

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United States (ProPublica) – by Marian Wang

While federal and state officials investigating flawed foreclosures have largely focused on holding the banks accountable and bringing relief to wronged homeowners, officials in a few states have begun targeting the more obscure middlemen of the foreclosure scandal.

Prosecutors in California and Illinois have sent subpoenas to Lender Processing Services, one of the largest firms that processed mortgage documents for the banks. (Read more about LPS in our guide to who’s who of the foreclosure scandal.)

As we’ve noted, the firm—which helps handle more than half of all U.S. mortgages—has been accused of using the same “robo-signing” practices as the major banks, such as signing and notarizing documents that appeared inaccurate or invalid. Bank employees have testified under oath that they relied on LPS to vet the information in foreclosure documents.

LPS has had its share of legal troubles over its mortgage processing. Michigan’s attorney general announced an investigation last month into potentially fraudulent mortgage documents processed by an LPS subsidiary. (LPS has said that it discontinued the practices used by the subsidiary.) Along with the big banks, the firm recently received an order from federal regulators to correct problems with its processing of mortgage documents. (Read that consent order.)

Illinois Attorney General Lisa Madigan also sent a subpoena to Nationwide Title Clearing, another firm contracted to provide mortgage services to banks. As we’ve noted, Nationwide Title Clearing employees have testified to robo-signing thousands of mortgage documents—known as assignments—that establish the ownership of a mortgage loan and are key to establishing who has the right to foreclose on a homeowner.

Nationwide Title Clearing said in a statement that its procedures have been “thoroughly audited and examined for accuracy” and that it would cooperate with any investigation. LPS declined to comment.

The latest actions on foreclosure problems as an attempted comprehensive settlement by all 50 state attorneys general has hit a few roadblocks. As we noted in our cheat sheet on bank investigations, the negotiations have been hampered by disagreement with the banks over the size of penalties as well as some disagreement among the attorneys general—at least eight of whom have opposed any settlement that would require banks to cut borrowers’ mortgage debt.

Bloomberg reports today that Bank of America has also received independent scrutiny from the attorneys general of Utah and Connecticut accusing the firm of invalid foreclosures and insufficient loan modifications. Utah warned that it would sue.

– Provided by ProPublica.org

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Washington, DC, United States (AHN) – The U.S. State Department on Tuesday barred seven firms from trading with the U.S. because they supplied oil to Iran in violation of 1996 sanctions against the Islamic country.

Sanctioned were Venezuela’s state oil company, Petróleos de Venezuela, Ofer Brothers Group of Israel, Petrochemical Commercial Company International (PCCI) of the United Kingdom, Royal Oyster Group and Speedy Ship of the United Arab Emirates, Tanker Pacific of Singapore and Associated Shipbroking of Monaco.

Petroleos was found to have delivered $50 million worth of petroleum products to Iran between December 2010 and March this year.

Under the sanctions, the firms cannot bid for government contracts, obtain export licenses, and obtain export-import financing.

The department also sanctioned more than 15 people and companies in China, Iran, North Korea, Syria and elsewhere for illicitly trading in missile technology and weapons of mass destruction. They were banned from vying for U.S. government contracts and from buying and selling U.S. defense articles.

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