frankly, I wouldn't know, but the Fed has stopped QE prematurely twice. So it can stop. Better to stop after the economy gets traction rather than before. I do not accept that QE is causing a worsening of data. Europe is the weakest of the major economies and they have had much less QE than US and Japan. If this were poker, I would still prefer the US cards to the euro area, Japan and China's.
what "market" are we talking about here ? Equity market ? I too would expect a rally as I expect him to confirm that tapering off is not imminent and conditional on stronger economic data. Dollar--I think the greenback can come off. Bonds? I think the 10-year can rally.
Yes, I think the investment house that has gone public with their $0.8000 forecast appreciates that good showmanship is part of the business. I think that there is a tendency to exaggerate the negatives of a falling currency and the positives of a rising currency. I don't think we see $0.8000 in the run-up to election. After overshooting to the upside, the decline in the Australian dollar's (a short AUD long MXN was our big trade for 2013) decline hardly a disaster. If one needs to make AUD payments, i.e., one owes Australian dollars, a weaker currency is quite helpful, no ?
The panic I was talking about was the collapse of the price of spot gold several weeks ago that marked among the biggest drops in gold prices seen in the post Bretton Woods era. It strikes me that your mint sales statistics is a reflection of the supply of the mint coins than the price of gold. The fact is the price of spot gold bullion trending lower and it broke back below $1400 today. And don't lose track of the bigger point I was addressing: that despite the QE and easy monetary policies and the claims of currency debasement the decline in gold prices was not anticipated by many observers and investors. Lastly what strikes me is that when the price of spot gold is rising, many say it is signalling this or that. But when the price is falling, now the signal is played down and rather than talk about the meaning of a 20% decline in the price of spot gold, the debate is shifted to the supply of 1/10 of an ounce coins. Really ?
That is what the ESM is authorized to do, under certain conditions, that have not been completely worked out. ECB does not equal Fed. ECB has bought sovereign bonds, but not bank bonds. It is also as much of an political view as economic and (my understanding) legal.
Ben Gee-- see J-curve effect. And my new post shortly (Fri May 10) that explains this. Can't go from currency value to exports despite what Econ 101 taught or what the mercantilists preach. Do us both a favor, read my book.
Who is we ? You don't think the EU, BOE and IMF and private economists cannot forecast GDP for the UK because of a political event late in the year? Yet US GDP is forecast in a presidential election year and Germany GDP is forecast for this year despite the election in Sept. Economic forecasting is difficult in its own right and there are always political considerations. Our information set is always incomplete.
Granger, leaving aside opinion, here are the facts. This year to date the yuan has appreciated 1.45% against the dollar, which is more than most Asian currencies, but the Thailand, Malaysia and India. Over the past 4 quarters, CNY has gained against Asian emerging currencies, but the THB, PHP and KRW. It has appreciating not depreciating against Japan and the euro and all the G10 currencies.
CNY rises as the dollar falls-but the dollar has gained this year against all the G10 currencies but the NZD and SEK.
These facts make it difficult more me to understand the point you are trying to make.
Yes. I am saying there is a qualitative and quantitative difference between the China's fx policy and Japan and the US. How much can the yen move against the dollar in a single day? How much can the yuan? When was the last time the US intervened ? Yes, I am saying that while the US in the past intervened, has not for years--with a couple notable exceptions, like the yen after the earthquake and tsunami and in 2000 to stop the euro from falling. Doesn't the huge accumulation of fx reserves, nearly a third of the world's, mean anything ?
Seriously, Ben Gee, you got to quit giving me the soft pitches. Setting interest rates or monetary conditions is not the same as managing a currency. You can argue all you want that they are the same time, but as the rules of engagement have emerged from the G7/G20, this is a widely accepted distinction. And I cite the widespread acceptance not as proof of its veracity, but as an indicator of "best practices".
Ben Gee--if only. The thrust of this piece is about technicals and because the RMB is so heavily managed, day-to-day movement is inconsequential. Its growth you refer to does not appear to be in terms of turnover, where the HKD has a significantly higher turnover. The restrictions mean that few SA members will have exposure. I do write about the currency elsewhere, so as the post right after this one.
Overreaction Corrected, Fresh Look After U.S. Jobs [View article]
"Our unions will never allow robotic jobs and inflexible work hours". Do you think this is really true, when 1) many unionized industries, like auto, are among the large robot users and 2)when the private sector is among the least unionized in generations ? Given the financial crisis, and the numerous problems the US faces--too big to fail, large structural deficits, disaparity of wealth, why demonize the unions ?
Is it really true that we cannot improve the productivity of most manufacturing jobs ? Can you show any evidence for that bold claim ?
Overreaction Corrected, Fresh Look After U.S. Jobs [View article]
wages in themselves are not the story. Here is how a $20 wage can and does compete with a $2 wage, it is called productivity. If the $20 an hour adds more than 10x the value of the $2 dollar wage there you go. Unit labor costs are the key measure not wages.
Draghi Being Open To Negative Deposit Rate Trumps Rate Cut To Drive Euro Down [View article]
zero1945, yes a country that has control over its own currency and has debt in its own currency can just print. so it is different than a fixed exchange rate regime or when one has debt in a foreign currency. (where it does not have control of the press). In those countries, like the US, Japan, the UK, they face problems but not the same as say Greece or Cyprus. I try to avoid implying things. You make fantastic claims, euro can buy anything, ECB is insolvent and I was just trying to explain that the euro can buy things and why the solvency of the ECB is more complicated than you claim.
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2 Issues For The Fed: How And When [View article]
Sterling And Yen Wait For No Man [View article]
Aussie Smack Down [View article]
Thinking About Prices [View article]
Shifitng ECB Balances [View article]
Yen Update [View article]
BOE And Sterling [View article]
New Zealand Commands The Spotlight [View article]
CNY rises as the dollar falls-but the dollar has gained this year against all the G10 currencies but the NZD and SEK.
These facts make it difficult more me to understand the point you are trying to make.
Currency Outlook [View article]
Seriously, Ben Gee, you got to quit giving me the soft pitches. Setting interest rates or monetary conditions is not the same as managing a currency. You can argue all you want that they are the same time, but as the rules of engagement have emerged from the G7/G20, this is a widely accepted distinction. And I cite the widespread acceptance not as proof of its veracity, but as an indicator of "best practices".
Currency Outlook [View article]
Overreaction Corrected, Fresh Look After U.S. Jobs [View article]
Is it really true that we cannot improve the productivity of most manufacturing jobs ? Can you show any evidence for that bold claim ?
Draghi Being Open To Negative Deposit Rate Trumps Rate Cut To Drive Euro Down [View article]
Overreaction Corrected, Fresh Look After U.S. Jobs [View article]
Draghi Being Open To Negative Deposit Rate Trumps Rate Cut To Drive Euro Down [View article]