About the Website

CurrencyThoughts is a stand-alone independent advisory service that integrates all global financial markets and the macroeconomic trends that make them tick.

The service features “New Developments Abroad,” a daily early-bird summary of selective Asian and European developments and market highlights and “Foreign Exchange Insights,” a weekly currency market newsletter, as well as a variety of ad hoc updates.

Some updates will bundle information that doesn’t generally emerge when the focus is limited to the discrepancy between actual and expected data results. Other postings will transform the facts into opinion and forward-looking projections.

What the Fed-watching industry does for the United States, this service provides for other major central banks, forecasting and previewing their interest rate policy meetings, interpreting actions taken, and illuminating the meaning of policy comments that emerge outside of formal policy-making venues.

Analytical Philosophy

In these days of heightened complexity, simple rules that correlate one development (like higher interest rates) mechanically with another (currency appreciation) are just that: overly simplistic explanations that all too often predict inaccurately.  Cause and effect depend on the broader context.  Historical comparisons are critical, and the challenge of global market watching is spotting the variations from past patterns. To uncover new truths, it is important not to get so caught up in the minutia that one loses sight of the big picture. One has to explore the trees without losing sight of the forest.

When the facts change, I change my mind. What do you do, sir? – John Maynard Keynes

Economic forecasters come in basically two flavors. Alamo economists stake out a position and hold to it come what may by interpreting all subsequent information in such a way as to support the baseline view. Flip-flopping economists see forecasting as an organic process with no disgrace in modifying a view as information emerges that does not support previous interpretations.

Alamo economics is predictable to the point of being stale.  One knows what an Alamo economist is going to say even if you’re not there to hear it.  Sometimes the analysis will be correct, other times not.  It really doesn’t matter. If you know the conclusion at the beginning, there is nothing new to learn from Alamo economists.  A correct forecast loses usefulness because of an invalid thinking process that constrains the bottom line to a single answer before an issue has been explored.  There’s no place for revealed truth in Alamo economics.

Alamo economists take pride in their discipline, but the flip-flopper’s orientation actually requires greater self-control.  A flip-flopper is not obligated to constant change, only to the possibility that new data, new circumstances, or unforeseen developments may overturn yesterday’s truth.  The flip-flopper reserves judgment until the facts are in and properly examined. It takes long experience to develop that extra sense that discerns data noise from true change.

This blog is for investors and other central bank watchers who seek originality and opinions and who are not afraid to adopt a different view when facts warrant it.

How to Post Comments

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CurrencyThoughts bases its analysis on information obtained from sources which it considers to be reliable.  CurrencyThoughts does not guarantee the accuracy or completeness of such information or analysis and makes no warranties regarding the suitability of information or analysis for a particular purpose.  The postings are for general purposes and are not specifically investment or trading advice.  CurrencyThoughts shall not be liable for indirect, incidental, special, or consequential damages whether foreseen or unforeseen.