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March 22, 2005

Financial Markets
The $1.3 billion question: What will happen to the renminbi

A week in China certainly does not make me an expert. Like many, I see China through the filter of English-speaking Chinese economists, and, to more precise, through the filter of those economists a…

March 27, 2005

United States
The financing of the US current account deficit

2004 Current account deficit: $666 billion2004 Net FDI outflow: $133 billion2004 Net portfolio equity outflow: $63 billion (TIC data); $37 billion (BEA) data. The difference seems to stem from diffe…

May 1, 2005

China
Will China get hit by the cover jinx?

It is a bit hard to start shorting the renminbi (RMB/ the Chinese currency) just because China has now made its appearance on the cover of Newsweek. It is hard to short something that has yet to be …

May 22, 2005

Financial Markets
That strong renminbi (ok, that strong dollar)

The RMB has appreciated by about 7% against one of China’s major trading partners this year. Not the US, obviously. But that doesn’t mean that China is not exposed to moves in the dollar-euro, or t…

October 13, 2004

United States
Oil and the US current account deficit

Oil above $50 a barrel is not good for the U.S. trade balance. Higher oil prices are a tax on US consumers, with the proceeds pocketed by oil exporters. If oil stays above $50 in November and Decem…

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…

June 1, 2005

United States
Is the US sufficiently geared up?

Deep Throat is no longer Washington’s best kept secret, the ten-year Treasury note yields less than 4% and Stephen Roach is a (reluctant) bond bull. The currency of a country with a 6.5% of GDP cur…

June 3, 2005

Economics
If Roach says 3.5% and Gross says 3%, someone else has to say 2.5%

Roach and Gross could not stay among the most bullish on bonds for very long. From Marc Gilbert’s column today.Gabe Borenstein, managing director of global investments at Investec Holdings Ltd. in N…

June 27, 2005

China
Martin Wolf makes sense (the Economist does not)

Martin Wolf’s FT column makes a number of crucial points:1) Asia has let undervalued exchange rates (and reserve accumulation) substitute for policies to promote domestic demand. The (growing) back…

July 18, 2005

China
If your reserves are growing by $300 billion a year

China indicated its reserves have increased to $711 billion at the end of June -- up $101 billion from the end of December 2004. Actually, they are up more than that. China transferred $15 billion …