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September 23, 2004

United States
The currency strategist at Morgan Stanley might want to talk to the chief economist at Morgan Stanley

Steve Johnson’s market insight column in Thursday’s Financial Times keys off Morgan Stanley’s currency strategist Stephen Jen’s argument that "As long as Asia insists on staying inside this dollar ar…

November 13, 2004

Budget, Debt, and Deficits
Will partial privatization of social security pass the global test?

This post is primarily about the implications of partial privatization of social security on the budget, not about its overall merits. For what it is worth, I personally think good old pay-as-you-go …

December 22, 2004

Martin Wolf explains the fall in the renminbi-dollar

Martin Wolf did the math: it turns out the renminbi-dollar zone has a current account deficit (projected) of $260 billion with the world this year. The United States’ current account deficit of $650…

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…

January 2, 2005

United States
Bretton Woods Two Lives

The Fed has started to tighten, Greenspan said anyone who has not hedged their interest rate risk desires to lose money. Yet higher short-term rates have not led to higher long-term rates. In the j…

November 19, 2004

Greenspan in the news

Alan Greenspan’s comments on the US twin deficits are getting lots of play. Just saying that at some point foreign appetite for US assets is likely to diminish and won’t stay at its current strong p…

February 26, 2005

Emerging Markets
Has Argentina changed the rules of the sovereign debt game?

Argentina is on the verge of completing one of the largest sovereign debt restructurings in history. Argentina is seeking to restructure about $82 billion in bonds, plus $21 billion or so in past d…

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…

January 24, 2005

Monetary Policy
Tyrants beware (except those we need to keep on financing us)

Today’s FT highlights the risk that the US will not benefit from cheap financing from the world’s central banks growing dollar reserves forever. Apparently, a new survey of central bankers suggests …

February 24, 2005

Monetary Policy
An Asian OPEC?

A less kind headline might be "Asian policy makers meet, agree to continue manipulating foreign exchange markets" Still, this Bloomberg article (link thanks to Calculated Risk) suggests that there ma…