Chinese Yuan

Concern #2: China's Predatory Currency Policy

November 10, 2009

Mercantilism is alive and well in China, now the world’s third largest economy although well down the leader board in per capita terms.  Chinese monthly economic figures for exports, industrial production, and investment will be reported tomorrow.  A massive three-dimensional policy stimulus from low interest rates, deficit fiscal spending and intervention to maintain a highly […] More

Louder Complaints About an Undervalued Chinese Yuan and Some History

October 26, 2009

The U.S. Treasury semi-annual report on International Economic and Exchange Rate Policies, released earlier this month, bluntly called the Chinese yuan “still undervalued” and said it had depreciated 7% in trade-weighted terms since February despite brisker Chinese productivity and GDP growth, a $186 billion increase in Chinese reserves in the first half of 2009, and […] More

U.S. Trade and China

June 10, 2009

The $29.16 billion deficit in April generated trade in goods and services was close to expectations and compares with a first-quarter average gap of $30.4 billion but a mean deficit of $61.2 billion in the first four months of 2008. The U.S. merchandise trade deficit on a census basis amounted to $144.0 billion in January-April, […] More

German and Japanese Orders

March 11, 2009

In January, Japanese machinery orders plunged 18.5%, while German industrial orders fell 8.0%.  Foreign demand was particularly weak in each instance.  Japanese foreign machinery orders declined 49% to 43.3% below the fourth-quarter average level and 71.2% less than in January 2008. Those results are much worse than generally anticipated.  Likewise, foreign orders for German goods […] More

Updated Chronology of Post-G7 Meetings

February 14, 2009

A statement by G-7 central bankers and finance ministers after meeting on Friday and Saturday called the global downturn and financial crisis “ongoing and severe, reviewed the multi-dimensional policy attack on the problem done thus far, promised continuing monetary and fiscal measures, laid out four principles to guide fiscal stimulus, declared a joint commitment to […] More

The U.S. and the Yuan

January 29, 2009

It’s bad diplomacy and bad currency management for officials to urge other governments to appreciate their currency because the other money’s appreciation is your currency’s depreciation.  Markets examine the comments of incoming governments extremely closely, and speaking only about a bilateral currency pair does not dilute the impression of a soft commitment to currency stability. […] More

Global Great Recession

January 22, 2009

The array of data released today showcases the global component of the economic downturn.  Japanese exports to the EU, U.S., and Asia fell by 41.8%, 26.6% and 36.4% in the year to December.  Japan’s 2008 trade surplus of Y 2.16 trillion was 78% smaller than the average annual surplus during the previous four years. On-year […] More

Trade Flows Amplifying Global Recession

January 13, 2009

Imploding two-way commerce is playing a central role in the frighteningly rapid deterioration of the global economy.  Several countries released international trade figures today, reinforcing the abrupt drop in trade flows depicted in data released previously. U.S. imports plunged 12.0% between October and November, more than twice as fast as the 5.8% drop in exports.  […] More

Long-Term Trend of the Dollar

January 5, 2009

In the 36 years between end-1972 and end-2008, the dollar depreciated 3-1/3% per annum against the Japanese yen and 2-1/4% against the D-mark.  Over the 26 years prior to the launch of the euro (which fused the mark to other continental currencies), the dollar fell 2.5% per annum on balance against Germany’s currency. Among the […] More

G-7 in Recession

December 24, 2008

Christmas Eve finds all parts of the G-7 — the United States, Euroland, Japan, Britain, and Canada — in recession. They are not alone. New Zealand, Hong Kong, Singapore, South Korea, Taiwan, Iceland, the Ukraine, Estonia and Latvia are among the bunch of other economies also in recession. With oil below $40, Russia appears a […] More

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