Larry’s Blog
No Way Out
August 11, 2010
In the risk-averse first twenty-four hours after the Federal Open Market Committee statement, The yen and dollar advanced 2.5% and 1.9% against the euro, Ten-year Treasury yields dropped twelve basis points, and the two-year maturity slid back to 0.51%, The Nasdaq, S&P 500, and Dow Jones Industrials fell by 2.5%, 2.2% and 1.8%, and Oil [...] More
Life, Liberty And Employment
August 9, 2010
As proclaimed by the United Nations, most countries on earth believe in the human rights of life, liberty, and security. The U.S. Declaration of Independence speaks instead about the rights to life, liberty and the pursuit of happiness. It is agreed that people are endowed with inalienable rights to life and freedom from political oppression [...] More
U.S. Economic Performance under Obama and Bush43
August 5, 2010
The most visited blog entry posted on Currency Thoughts was written August 19, 2008 and entitled How the U.S. Economy Performed Under Democrat and Republican Presidencies. That article considered five criteria: 1) the dollar against the D-mark and/or euro, 2) change in the Dow Jones Industrial Average, 3) real GDP growth, 4) employment growth, and [...] More
Geithner NYT Editorial Not a Game Changer
August 3, 2010
A defense of the Obama economic policy record by Treasury Secretary Geithner appears in today’s New York Times. The accomplishments mentioned are standard ones. They contain no fresh claims, and will do little to resurrect the administration’s popularity. Geithner writes that Nobody expected recovery from the great recession to be easy or quick. GDP has [...] More
How Low Will the Euro Go By End-2010?
July 28, 2010
The euro presently shows a 10% net year-to-date decline against the dollar. At its low of $1.1878 in early June, the euro had dropped by 17.0% since the end of 2009. I do not expect the euro to be weaker than that June level on December 31. Some analysts are more bearish on the euro [...] More
The Age of Negativity
July 14, 2010
The fear genie is out of the lamp and running wild. Just read the press headlines. From a single page in today’s Financial Times, one can choose from “Three years on, fault lines threaten the world economy”, “The war on greed begins at the dinner table,” or “Hell no is not a platform for power.” [...] More
Steinbrenner, Baseball, and Foreign Exchange
July 13, 2010
George Steinbrenner, owner of the New York Yankees since 1973, passed away today nine days after his 80th birthday. I submit one cannot completely understand American culture and the country’s distinctive status without some knowledge of baseball and the sport’s history. What Homer’s Illiad and Odyssey represent for Ancient Greece, where the idea of democracy [...] More
Assessing the Greater Long-Term U.S. Price Risk: Inflation or Deflation
July 6, 2010
The quirky discontinuities in U.S. tax law have made 2010 a critically important year for household financial planning. A critical assumption in this process involves price stability. Some experts believe the jump in Federal deficit spending and ballooning Fed balance sheet will cause a return to high inflation. I’m in the camp that anticipates continuing [...] More
So Many Economic Problems and No Easy Solutions
June 29, 2010
The U.S. economy performed worse during the past thirty years than between 1950 and 1980 even though the more recent bloc of time had two fewer recessions. The table below compares growth in real GDP, jobs, and consumer prices in the two periods and additionally isolates the past ten years. All three economic variables have [...] More
Gambling on Fiscal Restraint
June 22, 2010
One of the greatest uncertainties faced by policymakers concerns whether economies that are now recovering can tolerate fiscal restraint. Expert opinion is divided on this question, and historical precedents provide conflicting answers. Fiscal cutbacks in 1937 and a VAT increase of two percentage points to 5% in April 1997 respectively pushed the U.S. and Japanese [...] More
