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Dramatic currency falls against US dollar
Serious technical damage on the foreign currencies is being inflicted. The euro is falling through the uptrend drawn off last July (Draghi-induced) lows. It comes in just below $1.3200 today. The next technical target is near…
A brief history of the Chinese growth model
The lessons for China, if I am right, are that China should forego the idea of nurturing national champions and should instead encourage brutal domestic competition. Beijing should also eliminate subsidies to production, the most important…
Panic-driven austerity in the Eurozone and its implications
Eurozone policy seems driven by market sentiment. This column argues that fear and panic led to excessive, and possibly self-defeating, austerity in the south while failing to induce offsetting stimulus in the north. The resulting deflation…
On Sweden’s household debt problem
Sweden has been one of the countries to have best weathered the economic crisis. Despite a hiccup in its domestic economy and the extra deflationary impulse from souring loans to the Baltics in 2009, the Swedish economy has been remarkably…
Canada and Sweden: Here Come Those Experts Again – Time to Go Short
The destructive quality of irredeemable credit, understood by some before the U.S. mortgage crash, obvious to more in its wake, was crystallized in the too-low, centrally controlled, interest rates that flushed a bacillus of fake money and…
Links: 2013-02-20
Again Sweden is in the news in an article below I want to highlight. As I said yesterday in the links, I do want to talk about Sweden because the economic situation there is interesting. The Swedes are often seen as having the right mix of…
Sterling pounded by dovish MPC
Sterling is has eclipsed the yen as the main focus in the foreign exchange market. The surprising news that has kicked it to fresh multi-month low was that the BOE is closer to easing policy than has been suspected. While it was a unanimous…
On Apple’s China Strategy
Morgan Stanley had a very good note out earlier today reporting that Apple needs to issue an iPhone mini to capture share in China. This is what I have been advising as the market share margin trade-off is favourable for Apple's bottom…
Mercantalism: exports lower a nation’s living standards
In the U.S. and in euro countries, policies aimed at stimulating exports are considered an effective response to lagging growth and recession. Viewing a net export balance as an economic virtue and a growth engine is a relic of Mercantilism…