I am skeptical as to the economic benefits of the Eurozone. In my view, the Euro has always been more of a political construct than an economic one. Nevertheless, the Euro has functioned quite well as a leading international currency in the decade since its formation. However, the present financial crisis is revealing tensions within the Eurozone, the consequences of which are not readily apparent.

Ambrose Evans-Pritchard has picked up on the decline in trade flows that many have highlighted in recent months. This time, he looks at European-Asian trade flows and sees some major problems.

Share
In a very downbeat assessment of the ability of financial and monetary stewards to deal with the most protracted financial crisis is some 75 years, Paul Volcker, the esteemed former Fed Chariman warned that the economic slump has spread in a way that greatly challenges the Obama administration’s ability to restore order.
The Telegraph’s Ambrose Evans-Pritchard [...]

In the last few weeks, the currency market is where the action has been. We have witnessed massive moves in every major currency and in some not so major ones. To my mind, all of this is a prelude to some sort of currency crisis.

This crisis has been sneaking up on us as most of us have been transfixed by the U.S. subprime crisis and the subsequent credit crisis. For some currencies, it has been a sickening ride. The U.S. Dollar plunged to 1.60 to the Euro only to snap back viciously to 1.25. The U.S. Dollar plummeted to below 2.10 to the British Pound but is now above 1.60. All of this in the space of a few months.

But, it is in commodity and emerging market currencies where the trouble is brewing.

Share
Ambrose Evans-Pritchard of the Telegraph in London is one of the more interesting reporters on the business scene. In today’s Telegraph, he chronicles the depth and breadth of the global slowdown now taking form.
However, the crux of his article revolves around Spain and the sharp downturn they have experienced. While his article suggests [...]

Share
Update 4 Jul 2008: see a fuller answer to this question at my new post: The ECB is right and the Fed is wrong
That’s the question Ambrose Evans-Pritchard addressed in his blog yesterday. I am firmly in the deflationist camp, meaning systemic risk from credit contraction is the most frightening risk for our economies. [...]

Share
Ambrose Evans-Pritchard writes in today’s Telegraph of the BIS annual report, which is unusually cautious about the global economy. His article makes for sobering reading.
Bill White, the departing chief economist at the BIS, in writing his last annual report before departure. has warned that this financial crisis is the worst since the Great Depression [...]

Share
It has been my assertion for some time that writedowns and the attendant unraveling of the financial system is the most troubling problem during this credit crisis. This process is deflationary by its very nature because credit contracts. Ambrose Evans-Pritchard at the Telegraph has written a great article highlighting just this fact. [...]