trade

The U.S. Treasury’s semi-annual currency report had surprisingly strong criticism for Germany. The U.S. claims that Germany’s macroeconomic policies are inherently deflationary, creating risk for further crisis. I agree with this criticism…

It is still too early for all of these predictions either to have materialized or to have failed, but I thought it might be useful to review them to see whether or not they have been reasonably accurate in describing unfolding events and,…

The first seven trading days of September have offered all of these markets some much needed breathing space with EM currencies, bond and equity markets all doing considerably better. It is thus tempting to conclude that this was just…

As analysts and official entities like the World Bank continue to downgrade their forecasts for medium-term growth in China, I have been asked increasingly often for the reasons I believe that 3-4% average annual growth rates is likely to…

We learned today that China's trade volume unexpectedly 3.1% year-on-year in June with both imports and exports down. This unexpectedly weak data point highlights the risk of growth deceleration in emerging markets generally and China…

For India, oil prices currently stand at recent record highs (except possibly the oil India buys from Iran at a discount). Given that domestic petroleum is generally subsidized by the government, this spike is sure to put significant…

In the last few days the USD/INR exchange rate exceeded the psychologically important level of 60 for the first time in history. Foreign investors are panicking, as capital leaves emerging markets.

Michael Pettis had a very good post out yesterday that focused on the sectoral balances within and across eurozone countries which I recommend. His point is that excess German savings driven by wage suppression was behind macro imbalances…

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…