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February 22, 2005

Monetary Policy
Reserve Diversification

Three somewhat wonky and technical thoughts:1) Do not underestimate Korea just because it does not hold as many reserves as China and Japan. $200 billion is $200 billion. Moreover, the combined re…

March 9, 2005

Monetary Policy
Reserve accumulation and the financing of the February US trade deficit

The dollar is under a bit of pressure today. The renminbi keeps falling too. The logic behind China’s tight peg to the dollar continues to elude me. The US dollar needs to depreciate as part of an…

February 25, 2005

Capital Flows
Oil, and a bit of geopolitics

On Thursday, the Financial Times, the New York Times and Tom Friedman all weighed in on Asian reserve diversification. Paul Blustein of the Washington Post has an A1 story today on another of my comm…

May 16, 2005

United States
Strange trade numbers, strange TIC numbers

The trade deficit fell in March. So did the capital flows needed to sustain ongoing trade deficits. Net inflows of $45.7 billion a month are not enough to sustain even $55 billion monthly trade def…

January 26, 2006

China
The intent is good …

The Governor of the China's Central Bank said pretty much all the right things at Davos - at least from my point of view.    China does need to base its growth far more on domestic consumption.  …

April 30, 2006

Can the dollar block survive another bout of dollar weakness?

In case you haven't noticed, the dollar is now closer to 1.30 (v. the euro) than 1.20 - or even 1.15.  Carry is no longer king.   There is talk of a "regime change" in the fx market.  Or at least…

April 25, 2006

Bad optics

Many have noted that the White House botched the stagecraft of Hu's not-quite-a state visit.  Forget Falun Gong.   Focus on announcing China's national anthem as the anthem of the "Republic o…

May 11, 2006

China
I must be the least dovish of all China doves …

I have been quoted rather extensively in the past few days on Treasury’s foreign exchange report – And in this debate, you are either a dove or a hawk.   Doves (Roach) don’t think that the US sho…

July 12, 2006

United States
How long can non-oil imports remain flat if the US economy continues to grow? (The May trade data)

The basic story in the May data is that nothing much has changed, other than the oil price. And that in some sense is good news.  Export growth continues at a quite nice clip.  Thank you Boei…

November 28, 2006

Financial Markets
Gone (sand) fishing …

I am going to be away from my desk for a few days, giving a talk on petrodollars (and petroeuros).   Posting will likely be rather sporadic. Talking about petrodollars (and petroeuros) to group that …