A famous maxim has it that in the short run markets are voting machines, but in the longer run weighing machines. The point is that though short run movements can be remarkably fickle and irrational, markets do – eventually – self-correct and produce reasonable prices. But “eventually” can be a long time, especially where currency... Read More

Is it time we shorted George Soros? Judging by his latest book, The Tragedy of the European Union: Disintegration or Revival?, he certainly seems to have passed his sell-by date. While the book makes some good points about Germany’s role in imposing gratuitously severe austerity on Europe, for Soros watchers all this is hardly new.... Read More

The U.S. dollar’s reserve currency role is almost over, says former top Reagan administration economic adviser Paul Craig Roberts. As he points out, the dollar’s international credibility was dealt another hammer blow by the federal shutdown in October. Of particular note is the fact that the shutdown revived fears, albeit exaggerated ones, that the U.S.... Read More

The U.S. dollar’s predicament can be summed up in three observations: The U.S. balance of payments deficits have multiplied three-fold since the 1980s, and now typically run between 2.5 and 5 percent of GDP. Manufacturing’s share of GDP is down to 11 percent. Services do little exporting. Taken together, these facts spell doom for the... Read More

“Fool me once, shame on you. Fool me twice, shame on me.” So says an ancient Chinese proverb. It is worth bearing in mind in dealing with present-day Beijing. No matter how often Uncle Sam gets his clock cleaned in China, his credulousness remains a gift that keeps on giving for the Beijing leadership. The... Read More

The U.S. dollar had a good day today to close over the 100-yen mark for the first time in four years. This means the dollar’s yen value has recovered nearly 30 percent in just seven months — a truly remarkable performance but one that says much more about traders’ psychology than about fundamentals. One driver... Read More

ASTANA, Kazakhstan. “If it bleeds, it leads” says an old media industry maxim. So where the future of the world currency system is concerned, all eyes these days are on the badly battered euro. Almost all, anyway. One observer who has been trying to see beyond the current euro crisis is the Nobel Prize-winning economist... Read More