Wall Street Journal (December 9)
Many still blame an artificially high yuan for ongoing economic woes in the U.S. Markets say otherwise. “The yuan has traded at the softer edge of the narrow band around which Beijing allows its exchange rate to fluctuate, notwithstanding Beijing’s effort to push the reference rate stronger.” Other facts also point to an overvalued, not undervalued, Chinese currency. October marked China’s first net outflow of capital since 2007. Wealthy Chinese, importers and exporters are increasingly retaining dollars or moving money offshore. “Insiders are wary of the currency’s—and the economy’s—near-term future.”
Institutional Investor (December 7)
“The Indian rupee has declined 12.8 percent against the U.S. dollar since the beginning of the year, making it the worst-performing currency in Asia.” Due to both domestic and external pressures, the Indian rupee looks unlikely to strengthen despite possible intervention by the Reserve Bank of India.
New York Times (September 28)
“The world has barely dug out of recession and the global economy is again slowing dangerously. Most leaders seem eager to make things even worse.” China should let its currency rise. The U.S., Germany, Britain and other rich countries should be spending to spur growth. Instead, everyone seems to be doing exactly the wrong thing, which “is what caused the Great Depression.”
“The world has barely dug out of recession and the global economy is again slowing dangerously. Most leaders seem eager to make things even worse.” China should let its currency rise. The U.S., Germany, Britain and other rich countries should be spending to spur growth. Instead, everyone seems to be doing exactly the wrong thing, which “is what caused the Great Depression.”
Tags: Currency, Economy, Great Depression, Growth, Spending
Financial Times (September 19)
“There are no examples of lasting currency unions that are not ultimately backed by a political union.” The EU papered over this and other shortcomings in hopes that the economic benefits of monetary integration would lead to popular support. Instead national identities remain “much stronger than any common European loyalty.” This hinders leaders from extending decisive support to solve the eurozone’s problems, making clear “the limits to European solidarity.”
Tags: Currency, EU, euro, Loyalty, Solidarity
Financial Times (March 6)
In times of trouble, investors flock to the U.S. dollar. Or did. Despite turbulence in the Mideast, the Financial Times reports, “Hedge funds and forex dealers are betting record amounts against the dollar, reflecting a growing belief that the US currency has lost its haven appeal and that eurozone interest rates will soon rise.”
Institutional Investor (October Issue)
Modern economic warfare appears to center on competitive depreciation. The euro, the dollar, the yuan, the yen and other currencies are competing for lower ground as a means to jumpstart their own national economies. Institutional Investor points out “competitive devaluations and/or depreciations can cause the world to slip back into recession…. We need statesmen and stateswomen, not nationalists.”
Tags: Currency, Depreciation, Devaluation
The New York Times (July 6)
Chinese workers need better pay, better working conditions and independent labor unions. In short, “they need China to stop being sweatshop to the world.” The New York Times says “China needs to move on” from its export strategy, which depends on cheap labor and a weak currency. This strategy helped the country develop quickly over the past decade, but it’s now time to pay more attention to the workers.
The Financial Times (June 24)
George Soros writes that if the euro fails, it will be Germany’s fault. Germany used to be the euro’s biggest supporter, but it has turned inward. Germans, however, would do well to consider the consequences of a failed euro. “The restored Deutschemark would soar, the euro would plummet. The rest of Europe would become competitive and could grow its way out of its difficulties but Germany would find out how painful it can be to have an overvalued currency.”
Tags: Currency, euro, George Soros, Germany
The Wall Street Journal (June 20)
China will move toward a more flexible exchange rate, dropping the yuan’s dollar peg. This announcement comes at a good time, ahead of the G-20 meeting. This means the exchange rate won’t overcloud the major issue: “the failures of U.S. and European economic policies.” The WSJ points out the revalued yuan will not be the silver bullet that solves these problems.
China will move toward a more flexible exchange rate, dropping the yuan’s dollar peg. This announcement comes at a good time. Ahead of the G-20 meeting, this means the exchange rate won’t overcloud the major issue: “the failures of U.S. and European economic policies.” The WSJ points out the revalued yuan will not be the silver bullet that solves these problems.
