tag:blogger.com,1999:blog-5713178645208582139.post4060487866301439912..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: When Monetary Superpowers Flex, Emerging Market Investors FleeDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5713178645208582139.post-69731409385633105162014-02-01T15:38:39.360-06:002014-02-01T15:38:39.360-06:00Aside from gold's other supply & demand fa...Aside from gold's other supply & demand factors, the decline in the dollar's exchange rate & inflation expectations primarily determined the trend in gold. This trend was interrupted in July 2011, with the FDICs increased insurance coverage. Then this year, the roc in the proxy for inflation made a big downside move. <br /><br />Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-87514112303632478252014-01-31T11:14:46.503-06:002014-01-31T11:14:46.503-06:00Travis, your first point seems plausible but I hon...Travis, your first point seems plausible but I honestly don't know enough to be certain. I would like to hear more on your second point. Why would there be higher interest rates?David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-15235273204141268882014-01-31T11:12:59.297-06:002014-01-31T11:12:59.297-06:00Mark, interesting results, but I disagree with you...Mark, interesting results, but I disagree with your conclusion. You need to run granger causality tests on EM real exchange rates. And even then, I believe this link here is more on the expected path of Fed policy not its current monetary base level. So you would want to model that too.<br /><br />Here is why I think you need to look at real exchange rates. There is some anecdotal evidence QE2 David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-27542035498924758822014-01-30T18:25:16.231-06:002014-01-30T18:25:16.231-06:00I’ve done Granger causality tests on the US moneta...I’ve done Granger causality tests on the US monetary base (i.e. QE) over the period since December 2008 and find that the monetary base Granger causes the real broad dollar index, the S&P 500, the DJIA, commercial bank loans and leases, the PCEPI, and 5-year inflation expectations as measured by TIPS. None of this should be terribly surprising from the standpoint of standard textbook monetaryMark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-30118495901502124072014-01-30T03:00:05.473-06:002014-01-30T03:00:05.473-06:00David--
Maybe so...but would have the Fed adoptin...David--<br /><br />Maybe so...but would have the Fed adopting open-ended, results-dependent QE (QE3) at the get-go in 2008 faced much more resistance than the stop-and-go Fed QE policy (QE 1 and QE2)? <br /><br />I concur that the FOMC has become loose cannons on deck and with some anchors also (to use your boating analogy).<br /><br />But the FOMC is the Fed! We cannot say the Fed is doing a Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-7360891073271295782014-01-29T13:14:32.941-06:002014-01-29T13:14:32.941-06:00David,
TravisV from TheMoneyIllusion comments sec...David,<br /><br />TravisV from TheMoneyIllusion comments section here.<br /><br />Could China’s aggressive easing-then-tightening of monetary policy explain gold’s dramatic rise (2009 to 2011) then fall (2012 to 2013)?<br /><br />Or has gold fallen because we’ve found so much new oil (increasing real interest rates and lowering the attractiveness of gold)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-51951695711153488002014-01-29T11:16:46.621-06:002014-01-29T11:16:46.621-06:00The July 2008 collapse of the E-D market (which tr...The July 2008 collapse of the E-D market (which triggered the Great-Recession), was an exception. The E-D market collapsed as the E-D's prudential reserves evaporated. The prudential reserves of the E-D banks consist of various U.S. dollar-denominated liquid assets (U.S. Treasury bills, U.S. commercial bank CDs, Repurchase Agreements, etc.) and interbank demand deposits held in U.S. banks. Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-15037096723108870432014-01-29T11:08:52.889-06:002014-01-29T11:08:52.889-06:00The FOMC’s 2013 monetary policy was, on balance, c...The FOMC’s 2013 monetary policy was, on balance, contractionary (i.e., QE didn't work). The current sell off in the financial markets was predicted as a result. It’s a reoccurring phenomenon., e.g. Mexico Peso crisis Dec 1994,, U.S. dollar/Yen fall (3%) in Mar. 1995, Asian financial crisis July 1997, Russian financial crisis Aug 1998, Brazilian peso crisis Jan 1999, Argentina crisis Dec Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33673374867763321812014-01-29T09:55:57.357-06:002014-01-29T09:55:57.357-06:00Thanks Benjamin for your reply. If one accepts yo...Thanks Benjamin for your reply. If one accepts your premise that PBoC has done better than the Fed, one also have to remember that PBoC has far more power to act than the Fed. All the internal debates in the Fed and the external pressure from Congress makes it far harder for the Fed to do what is needed. David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-78615921011524530152014-01-29T03:48:54.348-06:002014-01-29T03:48:54.348-06:00OT but maybe David B. will enjoy this.
A while ba...OT but maybe David B. will enjoy this.<br /><br />A while back I think David B. suggested that simply crediting taxpayer bank accounts with money created by the Fed was a good idea. <br /><br />I think something along these lines now happens with the Food Stamp program, where recipients just get a EBT card and they have money they can spend---on food only, but since everybody eats, this is like Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-5245047993630943972014-01-28T21:48:00.010-06:002014-01-28T21:48:00.010-06:00Very important and excellent blogging.
It is quit...Very important and excellent blogging. <br />It is quite a state of affairs when a non-independent communist central bank---the People's Bank of China---does a better job than the Fed. <br />But who can deny it?<br />How did China perform in the 2008 bust, vs. the USA?<br /><br />Something odd too: By assuming a too-tight monetary policy, the USA will somewhat suffocate its own economy, and Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com