New monthly index tracks currency misalignment based on latest market rates Dollar is 11.2% overvalued Japanese yen 27.7% undervalued Chinese yuan 18.9% undervalued CMM is a partnership between the Coalition for a Prosperous America (CPA) and the Blue Collar Dollar Institute (BCDI). Today we are launching our Currency Misalignment Monitor (CMM). The CMM uses the…
The July trade deficit fell to its lower level of the year, a sign of a slowing economy. However, if trends continue, the goods deficit will break another record in 2022.
In his recent WSJ column “Strong Dollar Wins the Inflation Battle in New Spin on Currency Wars,” James Mackintosh suggests that the dollar’s sharp appreciation in recent years has been good for America and may be part of “an essential rebalancing of the global economy.” The costs of a bloated dollar are very high. Trade…
On Saturday, the U.S. government, European Commission, and five major nations issued a statement on financial sanctions against Russia which targets some of the largest Russian banks and drastically reduces the ability of the Russian central bank to support the value of the ruble currency by restricting their access to their reserves held outside Russia.…
A new CPA study, using widely accepted methodology and IMF data, shows that for the world’s major economies to achieve fair currency values and eliminate global imbalances, large adjustments in major currencies would be required. The dollar would need to fall by 16.6%, while the Chinese yuan would need to rise against the dollar by…
Global capital flows are the driving force behind the rise of the dollar, which rose 3.9% in 2021. In the last ten years, the dollar is up 25.5%[1]. The US attracts capital for many reasons, including tax avoidance, speculative trading, and a relatively small amount of genuine investment. The deregulation of financial markets in the…
Background When inflation threatens America’s stability and economic growth, the Fed raises the Federal Funds Rate (FFR). This reduces domestic demand for borrowed funds, and that reduces the growth of domestic money in circulation and thus the rate of inflation. This approach worked reasonably well from the 1930s when the FFR became an official policy…
Secretary of the Treasury Janet Yellen has provided an early signal of the Biden administration’s approach on currencies and currency manipulation. The US apparently has little intention of using currencies to address US economic problems, including slow growth, huge trade deficits, pervasive inequality, and a lack of good jobs. The economic analysis in the new…
https://youtu.be/rFmXoxQTO18
We all remember the famous line by Bill Clinton’s campaign advisor James Carville: “It’s the economy, stupid,” he said about what mattered most to voters. The economy still matters, of course, but one of the major fundamentals of the economy is the dollar and it’s non-competitive with the rest of the world. It’s too strong.…
