Currency Wars

Here’s a great article on the impending (maybe even current) global currency wars with the US leading the charge.  Here’s a great quote from the article, “Last quarter real domestic consumption rose at a 4.9% annual rate. That was an increase of $162.6 billion( 2005 $). But real imports also increased $142.2 billion (2005 $). That mean that the increase in imports was 87.5% of the increase in domestic demand.  To apply a little old fashion Keynesian analysis or terminology, the leakage abroad of the demand growth was 87.5%. It does not take some great new “freshwater” theory to explain why the stimulus is not working as expected, simple old fashioned Keynesian models explain it adequately.” (Trade in the national accounts, angrybearblog.com)

-Billy Ray

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