I recall a presentation on China at the Asia Society on the eve of the financial crisis, in which an economist commented on China’s extremely low interest rate on deposits (less than 1%) versus its markedly higher inflation rate, and commented that that was a recipe for hyperinflation. Well, that hasn’t been and is unlikely […]
Read more...Dean Baker has regularly made fun of the idea that the Chinese are concerned that they will show losses on their large dollar positions, mainly in invested mainly in US Treasuries. As serious traders will tell you, it’s actually easy to manipulate a market, but hard to make money doing it. As Baker put it: […]
Read more...Complementing today’s piece on the Chinese property bubble, a cross-post from VoxEU, with some graphical depictions of how wild the bubble has become. The NYT article referenced in the piece is here – RS. By Yongheng Deng, Professor of Real Estate and Finance at the National University of Singapore, Joseph Gyourko, Professor of Real Estate, […]
Read more...From Ed …the private sector in the west is in a higher savings and slower growth mode. The only way that the government can net save at the same time is via an increase in net exports to the emerging economies. The FT’s Geoff Dyer is right when he writes the “G20 looks to Beijing […]
Read more...By Kati Suominen, Trans-Atlantic Fellow at the German Marshall Fund in Washington, cross posted from VoxEU The global crisis has led some to question the dollar’s place as the dominant currency. This column discusses three camps in the literature: those advocating a new synthetic global currency, those arguing that a new reserve currency will emerge, […]
Read more...Look, I love the Financial Times, but even the pink paper has its off moments. Today, the FT reports, with the journalistic equivalent statement of a straight face, a patently ridiculous statement from China’s State Administration of Foreign Exchange: China has delivered a qualified vote of confidence in the dollar and US financial markets, ruling […]
Read more...By Willem Thorbecke, Senior Research Fellow at the Asian Development Bank Institute and a Consulting Fellow at Japan’s Research Institute of Economy, Trade, and Industry, originally posted at VoxEU Yves here. As we have pointed out in several posts, the idea that China’s announcement on its currency policy change is “abandoning its dollar peg” is […]
Read more...When a CEO has a major foot in mouth episode, it’s usually the result of uncontrolled candor. And today’s outburst by GE CEO Jeffrey Immelt appears to be true to form. According to the Financial Times, the GE cheiftan said some less that politic things about China and Obama at a private gathering which his […]
Read more...We and other cynics were very skeptical of the pre-G20 announcement by China that it was moving to a more market-oriented currency regime at some unspecified point in the future (particularly since China had said pretty much the same thing in 2005, and actually had committed to some baby steps then). Now that it is […]
Read more...We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced […]
Read more...It was hard to miss the Chinese central bank’s announcement last weekend that it was implementing a ore “flexible” policy toward managing its currency. Numerous Western officials and analysts declared the statement to be a major move, signaling China’s willingness to allow the renminbi to appreciate to a meaningful degree. We, by contrast, called it […]
Read more...George Magnus, senior economic advisor at UBS, provided a reading of the Chinese central bank’s announcement on its currency policy over the past weekend. He sees it as political, “symbolic rather than substantive.” He also contends that China needs to make significant policy changes. From the Financial Times: It would be churlish not to acknowledge […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Calls for global rebalancing are back in vogue, while the debate about the appropriate stance of domestic policy heats […]
Read more...The Chinese central bank made a vague announcement about its currency policy on its website today, which the officialdom, on cue, treated as a major move (to wit: “China vows increased currency flexibility” at the Financial Times, “Chinese say they intend to free up their currency,” Washington Post).) As we describe below, this “announcement” is […]
Read more...China posted a 48.5% increase in exports in May over its level the prior year, which led to much consternation and chest thumping in DC. Recall that Treasury Secretary Geithner was under considerable pressure from Congress to certify China a currency manipulator on April 15 (one of two semi-annual opportunities). China posted a rather surprising […]
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