The theme this week has been one of killing currencies, or monetary genocide, as that seems to be reaching once-believed improbable levels of descent. While not specifically a self-contained series, the prior pieces, which are relevant to this discussion, are here, here and here. My intent so far as this angle is far more speculative, looking ahead at projecting a [...]
I think it is interesting that the TIC data also provides some further confirmation about the Swiss participation in the January 15 version of the “dollar” problem. Of course, that still fits with the supercycle decay of the overall eurodollar standard, and even as one of those asymmetries, but I think it deserves its own emphasis. Again, all caveats about [...]
When categorizing intuition about the real economy, it is often regarded as a combination of both structural and now cyclical problems. There was, as yet, no true recovery owing largely to factors that continue to linger beyond historical comparisons about what “should” have occurred in and after the Great Recession. Some economists refer to deleveraging especially of households as that [...]
The question was never about what Chinese GDP would amount to, as that is as much an intentional projection as it is a measure of economic performance. That is true everywhere, but the Chinese have become masters of hitting their marks. They “predicted” 7% GDP and that is exactly what they got. It is more difficult, however, to do the [...]
The ECB having announced and then implemented at least some kind of QE plan, the entire economist community has adjusted their economic projections upward in uniform, flocking fashion. They haven’t had to make much of an adjustment because they never downgraded economic expectations much to begin with. That is why almost every news story about the economy (and not just [...]
Under the traditional formula for viewing currency movements, a rising currency is believed to be a huge impediment for economic expansion as exports “become relatively more expensive” against trading partners and competitors. This is a two-dimensional view in three-dimensional space as it leaves out the very necessities of finance. It isn’t just straightforward that one causes the other, as the [...]
I continue to believe that the Swiss National Bank’s action on January 15 opened a “release valve” of sorts inside the world of the global “dollar.” Prior to that day, heightened bearishness all throughout dollar-denominated credit dominated trading. That included funding markets, especially eurodollars. The eurodollar curve itself ignored almost everything else, including the FOMC switch to “patience” in December, [...]
After having been subjected to the serious temper of the “dollar” for much of the past few years, with requisite calm periods interspersed, the Brazilian economy is finally reaching the epic inevitability of it all. “Inflation” in January broke out of the “band” set by Banco do Brasil’s policy target to the highest level, in the IPCA series, since 2011 [...]
Every once in a while, you get the sense that the officialdom is starting to come around to the legion of finance as it actually exists rather than the one printed inside the dusty textbooks still crowded within the halls of academia. The “rising dollar” of the past six months has left its mark of bewilderment, as so many economists [...]
Oh Europe. I have a growing sense that US credit markets are repeating the leadup to last October 15, though there isn’t any obvious expression of any such illiquidity (at the moment). For one thing, the eurodollar curve has taken the FOMC’s bluffs in complete stride, in fact doing the exact opposite as you would expect of a very close [...]
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