Archive for May, 2011

Trade and the RMB

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Most of last week’s newsletter was dedicated to a discussion on Chinese debt, specifically on how we should think about the Chinese debt structure and on when would we know how much debt is too much debt.  Every earlier example of the investment-driven growth model that China follows ran into the problem of an unsustainable …

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Rebalancing through wage increases

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Is China currently rebalancing?  The currency has been appreciating, the PBoC has hiked interest rates four times, and wages have been surging.  Because of all of this I am often asked if China has finally begun the long-waited rebalancing process and whether we have yet seen an improvement in the underlying economy caused by a …

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Is it time for the US to disengage the world from the dollar?

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The week before last on Thursday the Financial Times published an OpEd piece I wrote arguing that Washington should take the lead in getting the world to abandon the dollar as the dominant reserve currency.  My basic argument is that every twenty to thirty years – whenever, it seems, that American current account deficits surge …

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