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Currency War

Today’s US employment report was, at first glance, the best in years. 300,000+ new jobs, rising wages, fewer people dropping out of the workforce, the whole package. Very hopeful. And also curious, since the rest of the world seems to be moving in the other direction. Consider: British workers suffer biggest real-wage fall of major […]

 

Most of the World Panics — Is the US Next?

by John Rubino on November 23, 2014 · 35 comments

It’s been quite a month. In late October Japan, despite a year of fairly aggressive quantitative easing, dropped back into recession and concluded that even easier money was the cure for its ills. It announced a debt monetization plan of almost science-fictional proportions in which the amount of new yen to be created, as a […]

 

Fed Smacks Dollar; Europe and Japan Lose Hope

by John Rubino on October 8, 2014 · 7 comments

The Fed spoke today and as usual it made news — though this time it might actually be real news: FOMC’s fear of a strong dollar drives greenback lowerNEW YORK (MarketWatch) — The U.S. dollar turned lower against rivals Wednesday afternoon after the FOMC released minutes from its September meeting, revealing that members raised concerns […]

 

The Soaring Dollar Debate: Good, Bad, Ugly

by John Rubino on October 5, 2014 · 19 comments

The dollar is on a tear. And the world is scrambling to figure out what it means. Beginning with the always-interesting Martin Armstrong in a recent Financial Sense interview: “I know a lot of people that hate the dollar, but you have to understand the dollar is really only the game in town. Yes, we […]

 

Europe is an economic basket case while the US is kind-of sort-of recovering. Why? Several reasons, but the only one that really matters these days is that in 2012 and 2013 the eurozone operated with tight monetary policy and an appreciating currency while the US created new money with abandon and let the dollar fall. […]

 

Europe Is Tanking, QE Is Coming

by John Rubino on August 17, 2014 · 30 comments

Last year the world kind of forgot about Europe. After ECB head Mario Draghi vowed to “do whatever it takes” to get the Continent growing, the markets calmed down, money got cheap and plentiful and functionally-bankrupt countries like Greece, Italy and Spain stopped making scary headlines. To the casual observer it began to look like […]

 

This morning the European Central Bank tried something different. As Bloomberg reported: Draghi Takes ECB Deposit Rate Negative in Historic MoveThe European Central Bank cut its deposit rate below zero and said it would announce further measures later today as policy makers try to counter the prospect of deflation in the world’s second-largest economy. ECB […]

 

For the past couple of years the European Central Bank has been the only sane inmate in the asylum. Unfortunately, in a crazy world being sane just gets you into trouble. Sound monetary policy leads to a strong currency, which in a currency war is tantamount to unilateral disarmament. Unable to export sufficiently to a […]

 

As it tries to punish Russia for the latter’s dismemberment of Ukraine, the West is discovering that the balance of power isn’t what it used to be. Russia is a huge supplier of oil and gas — traded in US dollars — which gives it both leverage over near-term energy flows and, far more ominous […]

 

It’s amazing how quickly China went from being the world’s savior to its biggest danger. To recap: When the developed world stepped off a cliff in 2008, China responded by borrowing about $15 trillion and spending most of it on infrastructure. Roads, bridges, skyscrapers, power plants, whole cities went up around the country. The resulting […]

 


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