blogs.ft.com - 10/19/2009
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The euro has become a currency on steroids. Its relentless nominal and real appreciation since the end of 2000 was briefly interrupted in the second half of 2008, but resumed with a vengeance during 2009. The strength of the currency is hurting the exporting and import-competing sectors of the ...
ft.com - 10/20/2009
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ft.com —
The explosion of debate on the demise of
the dollar has been instructive, though vastly premature. What...
is striking, however, is the absence of the euro from talk of alternatives as the global currency. Currency baskets, SDRs, even ...
(more)
Why the euro is not the next global currency
online.wsj.com - 10/21/2009
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online.wsj.com —
BY NEIL SHAH The dollar crossed the key
$1.50 threshold against the euro today before a slight...
pullback, raising more concerns in Europe about the strength of the euro and the impact it might have on any nascent recovery. European policy makers have ...
(more)
Euro Tops $1.50; Pound Jumps
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FT Alphaville —
... about US financial policy is widespread in China. With its $2,270bn in foreign currency reserves, an estimated 70 per cent of which are in US dollar assets, Beijing’s pride in its own relative ascendancy against the US over the past year is mixed with fear that Washington will seek to inflate away its massive debt. Indeed the audience at a Beijing university talk by Tim Geithner laughed out loud when the US Treasury secretary said China’s huge investment in US bonds was safe. Willem Buiter’s Maverecon: Time for the ECB to get serious about the overvalued euro The euro has ...
Gold bug variations
Paul Krugman —
... this week in Barron’s: IT’S TIME FOR THE FEDERAL RESERVE TO STOP talking about an “exit strategy” and to start implementing one.There’s no need for short-term rates to remain near zero now that the economy is recovering. The call to action is clear: Gold, oil and other commodities are rising, the dollar is falling and the stock market is surging. And what about mass unemployment? Oh well. Also, Willem Buiter has an excellent piece about the ECB , which somehow always finds a reason for tighter policy: if core inflation is low, it stresses headline inflation, if headline ...
Two easy-money pieces
Paul Krugman —
... The usual technique is to exclude traditionally volatile prices — food and energy — to get “core” inflation. An alternative, however, is to “trim” all big price changes, and look at the middle of the distribution. What you get depends on how much you trim. Here’s the picture: This suggests that disinflation is proceeding rapidly. And a falling inflation rate, possibly even deflation, means that a zero interest rate is less expansionary than it seems. I do want to beware of the ECB syndrome , switching my preferred inflation rate as needed so as always to justify the same ...
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