currencies

About four weeks ago, I wrote a post on Greek eurozone exit scenarios. While I believe that Greece will eventually exit the euro zone, I think it is premature to expect this to occur now as there are many avenues for compromise. The…

The Russian rouble was last trading at a rate a tad better than 55 roubles to the US dollar and WTI was over $56 a barrel the last I checked. This could be the end of a mini-crisis or a lull in events. I tend to believe it is a lull and…

Starting 22 Jan 2015, the Swiss National Bank will charge banks 0.25% to deposit overnight funds. This move will push the 3-month Swiss franc Libor rate, currently in a Fed-like range from 0% to 0.25%, into negative territory. And it is…

I am going to concentrate on the news flow today and what it tells us about where this financial crisis is headed. Given the last mini-crisis we had in emerging markets was overcome relatively quickly, the present crisis doesn’t have to…

I have been appalled at the cognitive bias that masquerades as analysis when discussing the recent collapse of the Russian Ruble. The purpose of analysis is to better understand what the real constraints in a given situation are and to…

By Michael Pettis The Financial Times ran a very interesting article last week called “China: Turning away from the dollar”. It got a lot of attention, at least among China analysts, and I was asked several times by friends and clients…

This fall, oil prices have tumbled so quickly that the effect on inflation, monetary policy and the economy is likely to be dramatic. As yet, however, we don’t know what those effects are likely to be, in part because the economics…

The European situation is still flirting with recession, if we look at the latest PMI data. I think the drop in oil prices will give the Europeans an unmitigated boost but the longer-term situation is still dire given the policy framework…

The Germans are saying, “we want the euro and we want to be good European partners, but not on any terms. We will not be in a union that fosters ever-increasing levels of government debt.”

Although I think China is clearly much more integrated as an optimal currency zone than Europe is today, it is probably less integrated than the US (I will use the US and Europe as the two extreme cases between which China falls). China of…