Daily Archives: December 8, 2009

Ingram Pinn illustration

A country’s exchange rate cannot be a concern for it alone, since it must also affect its trading partners. But this is particularly true for big economies. So, whether China likes it or not, its heavily managed exchange rate regime is a legitimate concern of its trading partners. Its exports are now larger than those of any other country. The liberty of insignificance has vanished. Read more

From the FT:
Tariffs can persuade Beijing to free the renminbi - Robert Aliber
The bonus points in Darling’s plans - Editorial comment
Japan’s fear of spending – Andrew Smithers

From elsewhere:
The importance of capital requirements – The Baseline Scenario
Alan Grayson asks Bernanke for answers in latest retrade of AIG deal – Naked Capitalism
Stiglitz: Too big to live – Economist’s View

By Wim Boonstra

Although the euro, which is approaching its 11th birthday, is close to its all-time high on the markets, the currency is not without its problems.

Early last year the euro temporarily lost ground against the US dollar because of a flight to safety, despite big problems in the US financial industry. Within the eurozone, interest rate differentials on public bonds of the various national sovereign issuers suddenly increased strongly. Although spreads have eased since early this year, the recent increase in Greek bond yields illustrates that the underlying problem is far from over. Read more