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September 16, 2004

United States
U.S. dependence on Asian central banks

One country’s external debt is another country’s asset. The U.S. capital account data leaves little doubt that foreign central banks have been a huge source of financing for the U.S. current account…

September 21, 2004

Emerging Markets
The IMF has refused to bailout bond holders before Argentina!

Adam Thomson of the FT has an interesting article arguing that Argentina’s bond restructuring could succeed if Argentina is willing to offer bondholders 30 cents on the dollar, only a bit more than t…

November 20, 2004

United States
Large Players in Large Markets

One of the world’s ironies is that even as John Snow putters on about how currency values should be set by market forces, the market -- or at least the private market -- is now playing a comparativel…

October 25, 2004

DeLong on the global economy

DeLong’s powerpoint notes are certainly worth checking out. The side by side graphs showing real GDP growth and then employment growth (or the lack thereof) elegantly tell the story of the 2002-2004…

October 6, 2004

United States
Why is China running a current account surplus in the middle of an investment boom?

I spent most of the past week in Washington for the IMF’s annual meetings, trying to sell a few books. The focus of the meetings though, was not on emerging markets, but rather on oil, China and the…

November 6, 2004

Will Japan be able to stay on the sidelines for long?

Some facts: 1) In 2003, Japan increased its reserves by $200 billion, emerging Asia by $245 billion. The world as whole increased its reserves by $500 billion, so Asia accounted for most of the worl…

September 16, 2004

United States
Growing out of the trade deficit

The U.S. government’s spin on the widening trade deficit is that it reflects a growth deficit in the rest of the world. This spin does not hold up well. All parts of the world other than Europe are…

October 18, 2004

Financial Markets
Guess why Treasury did not issue the foreign exchange report?

The Treasury did not issue the foreign exchange report on Friday. Presumably, this is because it would have made the same set of arguments that last year’s report made, namely that China is not mani…

November 19, 2004

Greenspan, part II

Federal Reserve Board Chairman Alan Greenspan was careful to frame the risk created by rising US external debt for foreigners investing in the US (and in the process financing the US current account …

October 6, 2004

Capital Flows
Cheney is wrong: $80 billion in debt relief if not equal to $80 billion in cash

Last night, Vice President Cheney claimed that US allies were contributing $80 billion to the war in Iraq by providing Iraq with debt relief. He compared this $80 billion in debt relief to the cash …