Hong Kong again topped the rankings, followed by Singapore, New Zealand, and Switzerland. Australia and Canada tied for fifth, of the 144 countries and territories in the Fraiser Institute’s 2012 Economic Freedom of the World Report.

“The United States, like many nations, embraced heavy-handed regulation and extensive over-spending in response to the global recession and debt crises. Consequently, its level of economic freedom has dropped,” said Fred McMahon, Fraser Institute vice-president of international policy research.

The annual Economic Freedom of the World report uses 42 distinct variables to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labor, and business.

Hong Kong offers the highest level of economic freedom worldwide, with a score of 8.90 out of 10, followed by Singapore (8.69), New Zealand (8.36), Switzerland (8.24), Australia and Canada (each 7.97), Bahrain (7.94), Mauritius (7.90), Finland (7.88), Chile (7.84).

The rankings and scores of other large economies include: United States (18th), Japan (20th), Germany (31st), South Korea (37th), France (47th), Italy (83rd), Mexico (91st), Russia (95th), Brazil (105th), China (107th), and India (111th).

When looking at the changes over the past decade, some African and formerly Communist nations have shown the largest increases in economic freedom worldwide: Rwanda (44th this year, compared to 106th in 2000), Ghana (53rd, up from 101st), Romania (42nd, up from 110th), Bulgaria (47th, up from 108th), and Albania (32nd, up from 77th). During that same period the USA has dropped from 2nd to 19th.

The rankings are similar to the World Bank Rankings of easiest countries in which to do business. But they are not identical, the USA is still hanging in the top 5 in that ranking. The BRICs (Brazil, Russia, India and China) do just as poorly in both. The ranking due show the real situation of economies that are far from working well in those countries. China and Brazil, especially, have made some great strides when you look at increasing GDP and growing the economy. But there are substantial structural changes needed. India is suffering greatly from serious failures to improve basic economic fundamentals (infrastructure, universal education, eliminating petty corruption [China has serious problems with this also]…).

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As I have said, the behavior (driven by the poor ethical standards of the “leaders” of our financial institution) of our financial institutions means, as a a customer, you have to be on guard for their tactics to trick you out of your money. Essentially you have to expect them to behave like a pickpockets and be on guard against them at all times. This is an extremely sad state of affairs: that the ethical failings of such critically important players in our economy are so widespread, long-lasting and accepted. However, as we have seen, they profit from this behavior and their long track record of such behavior provides evidence they will continue acting in this way.

Discover to refund $200 million to credit card customers

It is very good to see the Consumer Financial Protection Bureau taking action to protect the consumers from the financial institutions continued efforts to evade the law and take a little bit from millions of consumers. This type of behavior has been tolerated previously, and should never have been. The financial institutions strategy to take small amounts from millions of people was a wise way of dealing with the tendency of law enforcement to ignore such “small infractions” – they didn’t seem to bother seeing that taking small amounts from millions of people results in hundreds of millions of dollars in ill gotten gains.

Far too much of the bad practices are continuing. And when they are caught the consequences are far too small (which is why they keep behaving unethically). Discover is only being charged $14 million in civil penalties for their lapses (and has to return $200 million it took unfairly).

It is good to have police to try and catch literal pickpockets. And it is good to have the Consumer Financial Protection Bureau to catch financial institutions that take far more than pickpockets can dream of away from the wallets of consumers.

Related: Capital One Bank Agrees to Refund $150 Million to 2 Million Customers and Pay $60 Million in Fines – Very Bad Customer Service from Discover Card – Credit Card Regulation Has Reduced Abuse By Banks – Continued Credit Card Company Customer Dis-Service – I Strongly Support the Consumer Financial Protection Bureau

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Singapore is again ranked first for Ease of Doing Business by the World Bank.

The rankings include ranking of various aspects of running a business. Some rankings for 2011: starting a business (New Zealand 1st, Singapore 4th, USA 13th, Japan 107th), Dealing with Construction Permits (Hong Kong 1st, New Zealand 2nd, Singapore 3rd, USA 17th, China 179th), protecting investors (New Zealand 1st, Singapore 2nd, Hong Kong 3rd, Malaysia 4th, USA 5th), enforcing contracts (Luxemburg 1, Korea 2, Iceland 3, Hong Kong 5, USA 7, Singapore 12, China 16, India 182), paying taxes (Maldives 1, Hong Kong 3, Singapore 4, USA 72, Japan 120, China 122, India 147).

These rankings are not the final word on exactly where each country truly ranks but they do provide a valuable source of information. With this type of data there is plenty of room for judgment and issues with the data.

Related: Easiest Countries from Which to Operate Businesses 2008 – Stock Market Capitalization by Country from 1990 to 2010 – Looking at GDP Growth Per Capita for Selected Countries from 1970 to 2010 – Top Manufacturing Countries (2000 to 2010) – Country Rank for Scientific Publications – International Health Care System Performance – Best Research University Rankings (2008)

The USA economy is still in very fragile ground. The continued problems created by policies focused on aiding too big too fail institutions and continued huge federal budge deficits are dangerous. And the continued problems in Europe and mounting problems in China are not helping. Still, rental prices continue to rise across the USA.

The graph above shows housing rents (as shown by the Zillow rent index) have increased 5.4% in the last year (through July) across the USA. In Boston the increase was 4.5%; Grand Junction, Colorado -4.9%; San Francisco up 8.8%; Washington DC up 7.3%; Raleigh, NC up 1.8% (though the last one couldn’t be added to the graph for some reason). I just picked some cities I found interesting – with some diversity.

Housing prices are up 1.2% in the same period, according to the Zillow price index.

When looking at data on rental prices and home prices you will notice different sources give different readings. Judging these changes across the nation is very difficult and requires making judgements. Even at the local level the measures are imprecise so the figures you see will vary. Taking a look at several different measures, from reputable sources, is often wise.

Related: USA Apartment Market in 2011 – Top USA Markets for Buying Rental Property – Apartment Vacancies Fall to Lowest in 3 Years in the USA (April 2011) – Apartment Rents Rise, Slightly, for First Time in 5 Quarters (April 2010)

I am reducing the Curious Cat Investing, Economics and Personal Finance Carnival to being published once each month. If I get some decent contributors that want to host it I would consider going back to twice a month.

Also see related investing and economics books and articles.

• A controlled break-up of the euro would be hugely risky and expensive – “Estimating the price of a “Grexit” is guesswork, but Germany’s share might reach €110 billion of this, about 4% of the country’s GDP.”
• Personal Finance: Minimal Budgeting by John Hunter – “I just leave that in my checking account and what is in checking is what I have to spend… I couldn’t spend any more, I didn’t have it. If I were to go over (I never did), but if I were to have (say my credit card bill exceeded my checking account balance), I would have had to reduce my cash the next month.”
• Are Dividend Stocks Overvalued? Four Reasonable Blue-Chips to Consider by Matt Alden – “Although I do think the market as a whole is modestly expensive (via the Shiller P/E for an overview as well as inspection of individual securities), dividend stocks in general do not appear to be at dangerous valuations.” [Aflac has been on my almost buy list for over a year – John]
• Actually, The U.S. Lost 1.2 Million Jobs Last Month by Jacob Goldstein – “Everyone (including us) is saying this morning that the U.S. economy gained 163,000 jobs last month. Strictly speaking, this is a lie. In fact, the U.S. economy actually lost 1.2 million jobs last month. There were 134.1 million jobs in June, and 132.9 million jobs in July… the government releases “seasonally adjusted” jobs numbers every month. The basic idea is to correct for these predictable fluctuations.”
• Current crisis exposes weakness in China’s economic system by Jim Jubak – “The current obvious fakery is degrees of magnitude different from the usual distortion in Chinese economic data. So, for example, the Public Safety Bureau has simply stopped publishing data on new car registrations because the numbers show such a big drop in new car sales that they can’t simply be fudged. Data on the steel industry has been revised and revised again because the government can’t come up with a methodology that disguises the drop in steel sales and yet isn’t completely unbelievable. And, of course, the government hasn’t published data on the number of vacant apartments in China—a reflection of the country’s real estate boom and bust—since 2008.”
• For the first time since 1998 more money leaves China than enters it – “more than 16% of China’s rich have already emigrated, or handed in immigration papers for another country, while 44% intend to do so soon. Over 85% are planning to send their children abroad for their education, and one-third own assets overseas.”

More and more the ability to continue to delay the huge problems continued from the credit crisis (too big to fail fakery plus the decades of the USA and Europe living beyond their means) seems to be coming to an end. And onto that the problems in China and it is difficult to see how we avoid big problems. It is amazing the bad behavior in the USA and Europe has been only as bad as it has the last 4 years – but there is a very good chance that will not continue. China is not looking like it can be a savior. Certainly India is not doing much right recently. Japan continues to struggle. 2013 looks very tough economically. Eventually the central bank games of given essentially huge cash payments to bankers will cause people to lose faith in those currencies (frankly I can’t understand why they haven’t already). When that happens we will see some real problems.