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When looking at the current state of the Chinese economy it is important to note what happened leading up the ongoing predicament. By managing the USD/CNY exchange rate the Chinese factory worker was essentially funding excess consumption in the United States. One of the many perks enjoyed by global reserve issuer. The factory worker obviously…

Dollar Cycle

Over the decade long commodity boom made in China we have all been accustomed to the large and growing current account surpluses being recycled back into western financial security markets. Case in point, from 2000 to its peak in the fall of 2013 the Chinese added more than 2,000 per cent to their TSY holdings….

Dollar Leverage

According to Belgian-American economist, Robert Triffin the country whose currency have become the global reserve currency must be willing to supply enough liquidity to satisfy global needs. This obviously raises an interesting question for the Federal Reserve with regard to their monetary policy execution. On one hand, they need to consider the best course of…

FOMC Dot Plot for 2015

The Fed unsurprisingly chickened out from the much touted September hike. International conditions and a disapproval from Mr. Market was enough to unnerve an increasingly bewildered FOMC board. Less well known is the fact that the FOMC gave a strong, and unexpected, signal to the Pavlovian world of central bank front runners. Dovish hold as…

Sell it to China vs reality

The Chinese Jīngjì qíjī, wirtschaftswunder, keizai no kiseki, milagro económico or whatever you want to call is neither a miracle nor distinctly Chinese. A basket case like Argentine managed to pull off a similar feat, albeit with more volatility, over a 42 year timespan beginning in 1870. Germany did even better between 1945 and 1970….