Tag Archive: current account
Target2 Balances and SNB Currency Reserves: Same Concept, Update February 2013
We show that Target2 imbalances and the SNB currency reserves represent the same issues, namely current account surpluses/deficits and capital flight. Therefore it makes sense to compare them, in total and by inhabitant.
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Japanese Currency Debasement, Part 1: Current Account and Japanese Bond Bears
In our first part on Japans currency debasement, we look on three aspects, government bond yields, current account balances and potential hyper-inflation which causes yields to rise strongly.
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Comparing Trade Balances with FX Rates: Will the European Miracle End?
Eurostat recently published the European exports, imports and trade balance for the first ten months of 2012 compared to 2011. These show heavy improvements for the Southern member states but also a strong dependency on a weak euro.
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Roubini and Deutsche Bank’s Sanjeev Sanyal: Still Waiting for the Chinese Consumer
Nouriel Roubini and Deutsche Bank’s Sanjeev Sanyal are quite pessimistic about future global and Chinese growth. They think that we need to wait a long time for the Chinese consumer that should boost global growth.
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Target2 Balances and SNB Currency Reserves. They are Both the Same Concept
We show that Target2 imbalances and the SNB currency reserves represent the same issues, namely current account surpluses/deficits and capital flight. Therefore it makes sense to compare them, in total and by inhabitant.
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Helicopter Money against Animal Spirits and our Critique
The newest paper by McCulley and Poszar "Helicopter Money: or how I stopped worrying and love fiscal-monetary cooperation" presents fiscal policy and monetary policy along these two criteria
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German Currency and Gold Reserves and the German Trade Surplus
During the Bretton Woods system, Germany managed to obtain current account surpluses. They converted these surpluses into gold. At the time they bought it at 35$ per ounce at a relatively cheap price – at the end of the 1960s the price was augmented to 42$. At the end of the 1960 and with …
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The Big Swiss Faustian Bargain: Differences between SNB, ECB and Fed Money Printing Explained
Potential losses due to money printing are for the Fed: 1.2% of GDP, Bundesbank: 5% of GDP, SNB: 12% of GDP.
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Why the SNB will not Imitate Hong Kong, but Potentially Singapore
The SNB will not be able to realize a fixed currency peg over the long-term. The consequence would be that Switzerland loses its competitive advantage, lower Swiss rates, if it follow euro inflation.
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Same Procedure as Every Year: Analysts Shouting “The Great Recession is Over!” But It Is Not!
Or why we do not believe in the American economy. Like every year in Q4, analysts proudly present the end of the great recession: 2009: The big picture: The Great Recession is Over! Long Live the Ordinary Recession …. 2010: Mish Global Trend Analysis: The Great Recession is Over; Bad News: It Doesn’t Feel Like … Continue...
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FX Theory: The Balance of Payments Model Explained in 400 Words
The balance of payments leads to many confusions because definitions vary. For example, the IMF’s definition is different from the usual or historical definition. Secondly, the relationship between the balance of payments and reserve assets is difficult to grasp, especially in the IMF definition. Thirdly the origin of “errors and omissions” is often unclear. Therefore …
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Because They Knew What They Were Doing: The Parallels between European and SNB Leaders
Similarly as European leaders knew what they were doing with the euro, namely introducing a not feasible currency, Swiss National Bank did between 2005 and 2008, namely the absolutely wrong thing.
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Correlations Between the Swiss Franc, Gold and the German Economy
In yesterday’s post we focused on several economic events that weakened the position of the Swiss National Bank (SNB). In this extended replacement post, we give several reasons for recent movements in the gold price and explain the correlation between German economic data, gold and the Swiss franc. IFO data shows that Germany will not …
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SNB Losses: 1.85 Billion Francs in Just One Day, 231 Francs, 250$ per Inhabitant
After the disappointing US current account data, traders have realized which countries have strong trade balances, namely Germany and Switzerland (see here for our details on the ever rising Swiss trade surplus), additionally fueled the good German IFO data. Both the euro and the Swissie strongly rose against the dollar. Due to Abe’s pressure on the …
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German Economists and Merkel, the Implicit Followers of the Gold Standard
With ECB's OMT & "conditionality", that requires austerity and implicitly reduction of salaries in European periphery, Merkel & German economists have created consequences similar to a gold-standard.
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May Japan face a weak yen and high bond yields?
Like often in global economic downturns, the demand for Japanese cars and electronics has fallen in Q3, especially due to European purchasers. Additionally fueled by a row with China, the current account has become negative. Is Japan doomed because the yen will fall and bond yields will rise?
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Unicredit: Both Italy and Britain Should Play in the Southern Euro League, Germany in the Northern
The must read "Italy is a better bond bet than Britain" on the Financial Times. Unicredit CEO Nielsen implicitly confirms our latest post on global and European imbalances that can be solved only with a Northern...
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