There is more than one way to look at the emerging markets and frame the debate about what should or might be done. I think this quote from the Financial Times, however, falls outside the boundaries of reason: “So far we are still not seeing the impact of the currency devaluation we had last year,” said David Beker, economist with [...]
At its most basic element, the economic plan sounds plausible enough to almost be convincing. In the Japanese version, pointed more toward an export economy than internal consumption, monetary policy expects to devalue the yen, which should lead to a favorable re-configuring of goods parity. That, in turn, is supposed to increase internal production levels which then creates increased demand [...]
Apropos of the GDP outlier, Jason Fraser of Ceredex Value Advisors forwarded an article from CNBC, of all places, on the impact of this inventory cycling on US trade. Specifically, container traffic in imports has turned lower in November when it normally would do otherwise – and had for the three previous years. Traffic had been slightly below 2012 levels [...]
Earlier this week, Bloomberg published an article that examined the case of the missing link. It was not devoted to human evolution in a biological sense, but rather unintentionally to the emotional need to resist change. The title of the piece is, America’s Role of Consumer of Last Resort Goes Missing, and it continues from there on the theme of [...]
A simple review of recent data on demand in the US for actual goods. Less people driving to work (because fewer are working?). Perhaps the US can take the Japan route and export our way into the monetary panacea? Well, at the very least, the above data gives us a global trade reason for this: Click here to sign up [...]
Japanese exports continue to rise, but as we have seen in actual results elsewhere, both anecdotal and empirical, it’s a mirage driven by changes in the unit of measure (yen). Total exports from Japan rose 18.6% in yen terms, the highest growth rate since the middle of 2010. The problem was that imports also rose, by 26.1% as energy importation [...]
The BEA estimated that GDP in Q3 accelerated to 2.8% over Q2 2013, coincidentally matching the Q/Q growth rate from Q3 2012 (more on that in a moment). The largest “boosts” to GDP came from tumbling imports and growing inventories. Those two segments accounted for 1.2% in additional “growth” over Q2. While inventories rose and consumers and businesses bought less [...]
In the middle of September, nearly a full year after the yen began its devaluation, the Japanese administration held talks with business lobbies and labor unions. The focus of the affair was to make sure businesses knew that the intentional appeal of yen devaluation and thus commodity inflation was doomed absent wage growth. “’Our mission with these talks is to [...]
The Japanese revised GDP accounts for the 2013 4-6 period has gone pretty much the way of the export-import data. It reveals not only the lack of depth in understanding the numbers on the part of the media (and most economists), it is actually a useful example of some of the primary flaws in the expenditure approach itself. The Wall [...]
Global trade is one of the primary “headwinds” facing the global economy, and it does contribute to the lack of dollar flow impeding exchange functions in troubled currency areas. A large part of the “solution” proffered by central banks is an appeal to currency devaluation in order to boost export activity. The primary impediment, something that flies in the face [...]
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