By Richard Portes, Professor of Economics at London Business School and President of CEPR, first posted at VoxEU The threat of a currency war between the US and China is one of the main concerns for the G20 ahead of this month’s meeting in Seoul. This column say that while policymakers appear to grasp some […]
Read more...Before readers throw brickbats at me, I’m just acting as the messenger for two articles, one by Harvard’s Kenneth Rogoff, the other by the Financial Times’ Martin Wolf. Each points out that the US is taking a proportionately bigger hit than other big economies post crisis, particularly in terms of unemployment. And this is actually […]
Read more...The contradictions of the Eurobailout mechanism were bound to be resolved at some point, smoke and mirror and insufficient firepower relative to the magnitude of the problem will only take you so far. The eurozone rescue operation, although it looked like it was aimed at so called Club Med, aka PIGS sovereigns (Portugal, Ireland, Greece, […]
Read more...There are more news sightings that point to heightened worry about Eurozone sovereign debt/bank woes. A spate from Bloomberg this AM. Normally, when I can come close to doing one-stop shopping on relevant topics on Bloomberg, it’s a sign of anxiety. The first is “EU Bows to German Call for Permanent Debt Mechanism.” This piece […]
Read more...The recent jousting between the US and China had the look of a full on row. And the spectacle at last weekend’s G20 seemed to offer further confirmation, with Geithner proposing a cap on current account surpluses that was aimed at China above all. But now the Financial Times tells us that relations are already […]
Read more...Yves here. One thing I have noticed on posts that discuss the US labor market and trade is reflexive and frankly somewhat dogmatic defeatism. The position seems to be “China and Bangladesh have such cheap labor, there is no way we can compete.” This view is simplistic. First, in capital intensive industries, direct labor is […]
Read more...In all honesty, the news report out of the G20 strikes me as such a weird idea that I don’t know what to make of it. From the Financial Times: During an all-night meeting in South Korea of finance ministers from the G20 group of countries, the US called on nations to cap current account […]
Read more...Yves here. This post cites a number of recent Western commentaries on China’s currency policies; I suggest, for one stop shopping, you read Martin Wolf comment, “Why America is going to win the global currency battle.” There are several points in the argument below that are curious, to say the least. One is the notion […]
Read more...By Satyajit Das a risk consultant and the author of the Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives During the European debt crisis, in a matter of days, the dollar strengthened by around 10%. The weakness of the Euro and resultant appreciation of the Renminbi by over 14% reduced […]
Read more...One of Winston Churchill’s oft repeated saying was, “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma.” Of late, China has become a Russian-level conundrum to the wider world. Developed economies are troubled by Middle Kingdom’s increasingly aggressive economic stance; neighboring countries are rattled […]
Read more...After the in retrospect not that terrible first acute phase of the financial crisis, August-September 2007, this blog began taking note of Extreme Measures. These were proposals by respectable people for dealing with the burgeoning mess that were usually very creative and had zero chance of happening. The fact that so many normally sound people […]
Read more...The fact that an IMF meeting ended with the participants unable to feign a narrowing of differences on the currency front is further evidence that positions are hardening. And let us put none too fine a point on this: the currency row is simply an acceptable way to fight over imbalanced trade patterns. As we […]
Read more...By Marshall Auerback, a portfolio strategist who writes for New Deal 2.0 Something is very wrong with Japan. The Japanese economy has been much weaker than any other major economy for a while now: over the last business expansion, through the Great Recession, and in the recovery since the Great Recession trough. Japan’s business cycle […]
Read more...Last week, the simmering threat of trade disputes erupted into a full boil when Brazil’s finance minister Guido Mantega said that national governments around the world were weakening their currencies in an “international currency war” to gain competitive advantage. Mantega stressed that Brazil was prepared to back his words with action to lower the value […]
Read more...A story up on Bloomberg may be far more significant than its bland headline, “China to Spur Domestic Demand to Stabilize Economy, Wen Says,” suggests. In recent posts, we’ve inveighed about the dangers of the path China is now on. Its economy is unbalanced to an unprecedented degree. Exports plus investment account for a full […]
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