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November 24, 2004

Financial Markets
Chinese yuan hits new low against euro, swiss franc, pound …

Just a reminder of what falling dollar currently means. Dollar depreciation is clearly part of what is needed to bring the US trade deficit down to a more sustainable level. But what is the case fo…

November 28, 2004

Budget, Debt, and Deficits
Where are the bond market vigilantes?

The typical price of irresponsible fiscal policy is higher long-term interest rates.U.S. fiscal policy has been, in my view, somewhat irresponsible, particularly given the lack of private savings in …

November 30, 2004

Emerging Markets
Just because one dollar currently buys something like a million and half Turkish lira …

That does not necessarily mean the Turkish lira is cheap. Right now, given Turkey’s almost US scale current account deficit (close to 5% of GDP), the lira probably is a bit overvalued. Turkey is go…

December 7, 2004

Capital Flows
Petroeuros

Monday’s FT had the story, drawing on this just released BIS report. It seems OPEC countries are holding fewer dollars and more euros in their external bank accounts. (Thanks to Marcel for alerting…

December 7, 2004

United States
No Warm Glow from the Nobel Prize Here

Or more precisely, one of this year’s Nobel Prize winners in Economics seems to disagree with parts of the analysis Nouriel and I have been putting forward. It seems like Nouriel and I don’t underst…

December 8, 2004

Budget, Debt, and Deficits
The central bank bid

It seems like America’s biggest creditors stepped up to the plate today. China’s rapidly growing reserves have to go somewhere ... From Bloomberg:"So-called indirect bidders, which include the forei…

December 10, 2004

Emerging Markets
Why Argentina should do its bond exchange, ASAP

Yields on Latin American bonds have not been this low for a long time. It is hard to believe that Brazil’s 20 year dollar bond trades at a yield of only 8%, and most long-term Brazilian bonds are in …

December 11, 2004

United States
The Global Test

My harping on the fact that US economic policy now has to pass a global test is not simply meant to score rhetorical points. I suspect that the same folks who financed the expansion of the US curren…

December 18, 2004

2004 and 2005 current account deficits

Now that we have three of the four data points for 2004, it is worth trying to make a (well) informed guess about the end of the year current account deficit -- and to peer into 2005. This post of c…

December 19, 2004

Plaza, or Louvre?

The 1985 Plaza accord sought to drive the dollar down; the 1987 Louvre sought to keep the dollar from falling further. There is growing talk of a new Plaza in the US -- though not in the circles tha…