This is a fabulous read if you can really make it through. Or maybe its just me. Currencies are a complicated lot for me, but I'm trying to understand. The rise in the Canadian dollar, and the changes in valuations of other currencies as we travel through this global re-balancing have impacts and consequences across sectors and geographical boundaries. Everyone has their view on what is in the best interest of their realm of influence and responsibility. Always interesting to see how the Americans feel it is a global responsible to take the brunt of the devaluation consequences. Europe and China both of course disagree As is acknowledged, no one really knows for sure, except maybe those that are taking part in those global currency meetings that are not occurring. I think to the benefit of all involved, this will take some years to unfold .... but those that are convinced that it will unfold in alignment with their view are betting on gold.
http://mpettis.com/2009/10/currency-depreciation-and-global-imbalances/
October 9th, 2009 by Michael Pettis | No Comments | Filed in Balance of payments,Currency regimeThe 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.
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