Comments on: Has the dollar peaked? http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/ Sat, 21 Nov 2009 16:40:10 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Roland Manarin http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120371 Roland Manarin Tue, 16 Dec 2008 15:08:29 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120371 I returned from Europe last week and purchasing power parity tells me that the dollar is undervalued compared to the Euro. I returned from Europe last week and purchasing power parity tells me that the dollar is undervalued compared to the Euro.

]]> By: Is the dollar broken? | Commodity http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120363 Is the dollar broken? | Commodity Tue, 16 Dec 2008 12:07:40 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120363 [...] deficit stable, meaning that the US still remains very dependent on capital inflows. Brad Setserscared me straight last week on this topic: The US trade data surprised on the downside — and while it is far too [...] [...] deficit stable, meaning that the US still remains very dependent on capital inflows. Brad Setserscared me straight last week on this topic: The US trade data surprised on the downside — and while it is far too [...]

]]> By: Fed Watch: What If the Analogy is Wrong? http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120283 Fed Watch: What If the Analogy is Wrong? Mon, 15 Dec 2008 10:33:32 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120283 [...] deficit stable, meaning that the US still remains very dependent on capital inflows. Brad Setser scared me straight last week on this topic: The US trade data surprised on the downside — and while it is far too [...] [...] deficit stable, meaning that the US still remains very dependent on capital inflows. Brad Setser scared me straight last week on this topic: The US trade data surprised on the downside — and while it is far too [...]

]]> By: adiemuso http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120282 adiemuso Mon, 15 Dec 2008 09:04:14 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120282 its the interest rates....they are paying almost 0% for overnite up till 1 wk for USD deposits...wat do u expect USD to strengthen on? printing of more USD? its the interest rates….they are paying almost 0% for overnite up till 1 wk for USD deposits…wat do u expect USD to strengthen on? printing of more USD?

]]> By: Massimo GIANNINI - M.G. in Progress http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120253 Massimo GIANNINI - M.G. in Progress Sun, 14 Dec 2008 23:07:17 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120253 It is likely that at the end of the day US as well will get on Helicopter Ben and print money against deflation. No alternatives to <a href="http://mgiannini.blogspot.com/2008/12/economics-for-joe-plumber.html" rel="nofollow">the economics for Joe the Plumber</a>. The future of the dollar is not bright! It is likely that at the end of the day US as well will get on Helicopter Ben and print money against deflation. No alternatives to the economics for Joe the Plumber. The future of the dollar is not bright!

]]> By: Estragon http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120248 Estragon Sun, 14 Dec 2008 21:22:36 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120248 bsetser - <em>"More seriously, I am not sure that there is a consensus on what constitutes quality now"</em> You may be overthinking this a bit. Quality, at this juncture, has little to do with the relative merits of impairing sovereign debt in support of private debt, or countercyclical policy. Quality is quite simply the likelihood of being able to turn an asset into ready cash very quickly. Those with ready cash are predator in current circumstances. Those without are prey. bsetser – “More seriously, I am not sure that there is a consensus on what constitutes quality now”

You may be overthinking this a bit. Quality, at this juncture, has little to do with the relative merits of impairing sovereign debt in support of private debt, or countercyclical policy.

Quality is quite simply the likelihood of being able to turn an asset into ready cash very quickly. Those with ready cash are predator in current circumstances. Those without are prey.

]]> By: Global Monopoly http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120247 Global Monopoly Sun, 14 Dec 2008 20:29:50 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120247 A financial crisis isn't something new. It's been happening all around the world, every few years in each economy, you have the boom and bust sequence. A financial crisis isn’t something new. It’s been happening all around the world, every few years in each economy, you have the boom and bust sequence.

]]> By: gillies http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120246 gillies Sun, 14 Dec 2008 19:04:55 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120246 thankyou DJC - i think it was you - for the reference to the banking collapse of the venetians in the 1340s. (google 'venice / 1340 / financial') a good long perspective. those who know how they would have prevented 1929 might like to say how they would have handled 1345 ! thankyou DJC – i think it was you – for the reference to the banking collapse of the venetians in the 1340s.

(google ‘venice / 1340 / financial’)

a good long perspective. those who know how they would have prevented 1929 might like to say how they would have handled 1345 !

]]> By: gillies http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120235 gillies Sun, 14 Dec 2008 18:45:25 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120235 i get the impression that even successful predictions are coming to pass at a faster rate than the commentators expected. inflationary forces build gradually - but bankruptcies are sudden. unemployment is sudden. close downs are sudden. is everyone sure that helicopter policies can work within an effective timescale ? and would competitive devaluation be one of those things like the first world war that nobody wants but everybody gets ? so would there be any point in launching such an offensive ? a contracting global economy - with an exploding global supply of currency - collapsed treasuries and escalating interest rates ? if that is a good idea, i would hate to hear the bad ones . . . i get the impression that even successful predictions are coming to pass at a faster rate than the commentators expected.

inflationary forces build gradually – but bankruptcies are sudden. unemployment is sudden. close downs are sudden. is everyone sure that helicopter policies can work within an effective timescale ?

and would competitive devaluation be one of those things like the first world war that nobody wants but everybody gets ? so would there be any point in launching such an offensive ?

a contracting global economy – with an exploding global supply of currency – collapsed treasuries and escalating interest rates ?

if that is a good idea, i would hate to hear the bad ones . . .

]]> By: a http://blogs.cfr.org/setser/2008/12/12/has-the-dollar-peaked/#comment-120226 a Sun, 14 Dec 2008 11:00:05 +0000 http://blogs.cfr.org/setser/?p=4193#comment-120226 "But can anyone point to one person who has predicted such a meteoric rise in the USD during 2008. " Meteoric, I'm not sure. But there were plenty of currency analysts at investment banks who said buy the dollar vs the euro early to mid-year 2008. E.g. Stephen Jen in April 2008 predicted, "EUR/USD will sell off towards 1.40 by year-end." Madoff: if it's really 50 billion usd that investors have lost, then that's a big chunk of change by any measure. It means fewer hedge funds and less liquidity (in the sense of wider spreads). Normally, this would also mean more volatility, but volatility is already so high for certain asset classes, I don't think you can bet on this one. “But can anyone point to one person who has predicted such a meteoric rise in the USD during 2008. ”

Meteoric, I’m not sure. But there were plenty of currency analysts at investment banks who said buy the dollar vs the euro early to mid-year 2008. E.g. Stephen Jen in April 2008 predicted, “EUR/USD will sell off towards 1.40 by year-end.”

Madoff: if it’s really 50 billion usd that investors have lost, then that’s a big chunk of change by any measure. It means fewer hedge funds and less liquidity (in the sense of wider spreads). Normally, this would also mean more volatility, but volatility is already so high for certain asset classes, I don’t think you can bet on this one.

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