Tag Archives: FX

China’s Insurmountable Global Weakness: Its Currency

Quick history quiz: in all of recorded history, how many superpowers pegged their currency to the currency of a rival superpower? Put another way: how many superpowers have made their own currency dependent on another superpower’s currency? Only one: China. China pegs … Continue reading

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Is the U.S. Dollar Set to Soar?

Hating the U.S. dollar offers the same rewards as hating a dominant sports team: it feels righteous to root for the underdogs, but it’s generally unwise to let that enthusiasm become the basis of one’s bets. Personally, I favor the … Continue reading

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FX Crisis Brewing: Japan Needs a Stronger Dollar, China Wants a Weaker Dollar: The Fed Can’t Please Both

Foreign exchange (FX) is a zero-sum game: if one currency weakens, another must strengthen. Since the value of a currency is relative to other currencies, all currencies can’t weaken together: at least one currency must strengthen as others weaken. That … Continue reading

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Is This How the Next Global Financial Meltdown Will Unfold?

I have long maintained that the structural imbalances of debt and risk that triggered the Global Financial Meltdown of 2008-2009 have effectively been transferred to the foreign exchange (FX) markets. This creates a problem for the central banks that have … Continue reading

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Why the Fed Would be Insane to Raise Rates: The Rising U.S. Dollar

The parlor game of the moment is laying odds on the Federal Reserve’s decision to raise rates, leave rates unchanged, or (gasp!) hint at future stimulus. There are certainly a multitude of inputs to the Fed’s decision, and a variety … Continue reading

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