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January 3, 2005

Budget, Debt, and Deficits
Borrowing is Saving, Up is Down

Edmund Andrews of the New York Times provides the Rosetta stone that lets us decipher the Bush Administration’s plan to cut the deficit, which seems to be a plan to pretend to cut the deficit. Here i…

March 29, 2006

Exit Schumer and Graham, Enter Grassley and Baucus

Schumer-Graham won't be brought to a vote until September.   China's central bank governor Zhou must  be persuasive.  Maybe he plotted out where the RMB will likely be if China continues with…

February 16, 2006

Monetary Policy
So where exactly are all the world’s reserves going?

We don't yet formally know the BEA's estimate for the end of the year current account deficit, but we have a pretty good idea.  We also now have a lot of data about how the US financed its cu…

June 21, 2006

United States
So, is Michael Mandel right? Did intangible income (dark matter) ride to the rescue in the first quarter, offsetting rising US debt?

As Michael Mandel has noted, the US income balance improved in the first quarter – contrary to the expectations of “pessimists” like me.  I would say “realists” – rising debt usually implies rising i…


April 4, 2006

The Euro moved as much in one day last week (Thursday) as the RMB has moved since July

But the European Union still thinks it needs to warn against the risk that China will let the RMB appreciate too rapidly.Memo to the EU.   Where have you all been?   China considered a bigger initial…

July 26, 2006

Emerging Markets
Is Saudi Arabia the new IMF?

Last week I was beginning to think the IMF might be back in business.   A couple of press reports hinted that Lebanon’s central bank was facing real pressure.    Folks fleeing the country wanted doll…

December 8, 2006

Auto parts, China, protectionism

I have long thought that China's move into auto parts was a possible (political) trigger for a new set of stress on Bretton Woods 2 -- the point where the shift of manufacturing production out th…

August 9, 2007

The balance of financial terror, circa August 9, 2007

Back in early 2004, former Treasury Secretary Lawrence Summers highlighted the emergence of what he termed the "balance of financial terror."   China – and others – relied on the US for demand that t…

May 14, 2006

Budget, Debt, and Deficits
Not quite sure the federal debt is an “ungoverned force”

Despite what David Brooks says.  The rising debt seems to be a direct consequence of cutting taxes and raising spending -- decisions the Bush Administration made.    The US may not be able to stop Ch…

September 29, 2007

Waiting for the Plenum

Michael PettisIt is hard to overestimate the importance to China's near-term and longer-term prospects of the 17th Plenum in two weeks.  These meetings, held every five years, are the main events…