Apr 28th, 2010
One nice things about writing a blog is that I don’t need to be topical. Not only can I write worriedly about rising contingent debt levels three or four years before they become obvious, but I can also revisit a controversy that took place March involving Paul Krugman and Stephen Roach. I revisit this old controversy [...]
Feb 22nd, 2010
It is a real toss-up as to which generates more bizarre comment in the international press: Beijing’s long-feared dumping of US Treasuries, or the use and value of the PBoC’s central bank reserves. The revelation last week that Chinese holdings of US Treasury obligations fell in December by $34.2 billion, to $755.4 billion, generated a [...]
Jan 9th, 2010
I will be in NY and Boston during the first week of February and plan to meet a number of investors there to discuss China. I believe it becomes official on February 1, but I recently joined the Hong Kong subsidiary of one of China’s top broker/dealers, Shenyin Wanguo. I will continue teaching at Peking [...]
Oct 9th, 2009
The US trade deficit unexpectedly narrowed in August, according to the Commerce Department in a report released yesterday. Exports were up slightly and imports down, mostly because of a reduction in oil imports, I think, but the trade deficit was still a hefty 3.6% of GDP. So does this mean that the rebalancing is grinding [...]
Jun 23rd, 2009
William Cline and John Williamson published on Vox an interesting piece earlier this month June 18), titled “Equilibrium Exchange Rates,” in which they try to “estimate a set of medium-run fundamental equilibrium exchange rates compatible with moderating external imbalances” for the 30 largest economies. They assume that a sustainable equilibrium trade balance for the US [...]
Apr 8th, 2009
I have recently finished reading Martin Wolf’s latest book, Fixing Global Finance, and I strongly recommend it for its very clear laying out of the global balance of payments issues behind the global crisis. I should warn my readers that Wolf and I have come to very similar conclusions about the underlying root causes of [...]
Mar 24th, 2009
Beijing music and art Things have been so busy that I haven’t been posting as much as I would like. Besides my increased writing commitments and the constant barrage of news, I would like to mention that over the past weekend we completed the second annual festival of experimental and avant garde music, featuring [...]
Mar 16th, 2009
Replenishing bank capital One of the students in Peking University’s Guanghua Students Monetary Policy Committee, a group for which I am an advisor, put together last week a summary of plans to raise capital adequacy ratios for Chinese banks. I thought it would be useful to reproduce his numbers. According to him, Shenzhen Development Bank, [...]
Mar 11th, 2009
Deflation and debt On Monday CPI and PPI numbers for February came out. CPI was down 1.6% year and year and PPI was down 4.5%, in line with or slightly below expectations and, according to Bloomberg, the highest rate of deflation among the 78 countries they follow. Some of this may be caused by one-off [...]
Feb 15th, 2009
As I reported in last Thursday’s blog entry, last week the research institute associated with China’s Ministry of Finance published a report on its website arguing that China’s central bank should “actively guide” the yuan’s exchange rate and devalue the currency to about 6.93 against the US dollar. The purpose of depreciating, the report said, [...]