Currencies Archive

WRKO The Voice of Boston Radio Interview

Click here to listen to my interview on WRKO The Voice of Boston on July 17th ...Read More

macro update

Saudis remain price setter: Main theme: deflationary biases Greece is a deflationary event, as EU aggregate demand is further restricted, with no sign of any possibility of fiscal relaxation. Oil fell as Saudis increased discounts, further reducing global capex and related asset prices. US oil production that gets sold counts as GDP, ...Read More

Greece loses the gambit

It now looks to me like Greece has lost the wrestling match. The other EU members are very sensitive to market reactions. The question was whether the EU economy needed Greece, and the answer is now looking more and more like ‘no’. Not a good position for Greece to find itself after ...Read More


Not much to say that hasn’t already been said. I saw nothing good coming out of a yes or no vote and I still see it that way. And watch for the follow up polls on the demographics of the vote- who voted, what they say they knew about what they voted ...Read More

Comments on Greece

So the euro is down a % or 2 because of the Greek debt drama. Generally currencies go down on debt drama when the debt is in a foreign currency and it’s feared the govt will have to sell local currency to get the fx to make the payments. For example, the ...Read More

Greece reading IOU’s to pay public sector workers

Yes, this is viable operationally, as it going back to drachma. However, there’s a lot that can go wrong, as demonstrated by prior episodes of inflation, high interest rates, high unemployment, and currency depreciation. Not to mention the temptation of the channels of mass corruption also too often employed in the past ...Read More

Euro area trade, Greece comment

The latest trade release is very euro friendly. The lower euro, forced down by selling and not by trade, has increased the euro area trade surplus and with sellers largely exhausted, the euro goes up until the trade surplus goes away.. So Tsipras rejected this latest offer which, based on his earlier ...Read More

Greek bank liquidity, credit check

So people transferred their deposits to other banks, and those other banks wouldn’t redeposit/lend those euro back to the Greek banks via the interbank market, at any rate of interest. So instead the lost deposits were replaced by what functionally are deposits from the ECB via what’s called the ELA. What’s wrong ...Read More

EU Industrial Production, Credit Check, Atlanta Fed

Even with increasing net exports, over all GDP isn’t benefiting all that much, as fiscal policy and structural reforms that assist exports do so by restricting incomes and domestic demand to achieve ‘competitiveness’. Additionally, negative rates and QE remove some interest income from the economy, which also restricts domestic demand to some ...Read More

Saudi output, Greek statement, EU pmi

Saudi output up a bit. As they post prices and let their refiners buy all they want at those prices, this shows demand is up a bit, likely because of a supply disruption elsewhere, like Libya, for example: As suggested all along: In an interview with Realnews newspaper published on Saturday, Economy ...Read More