Marshall Auerback here with a few thoughts about this economic cycle, external imbalances, fiscal stimulus, and current account deficits.
This is not the Great Depression. We are going to have “muddle through” here precisely because we lack the courage to deficit spend on the magnitude we did in World War II. We are spending too much [...]

I don’t want to beat a dead horse here, but the Chinese have been making a lot of muscular moves diplomatically. While shifts in balance of power often take decades, it is increasingly apparent that China is making a strategic move in that direction right now.
We have been chronicling these moves here in a [...]

In the wake of recent statements by Chinese officials about the dollar and dollar assets (see our previous comments here, here and here), it does seem like the Chinese are avoiding dolar-based transactions:

China and Argentina have made a tentative agreement to swap $10bn (£7bn) worth of their currencies.
The move, which allows both countries to bypass the [...]

Two weeks ago, the Fed roiled bond markets by signalling it would start to purchase Treasury bonds with printed money – the very definition of inflation.  
Now, its the ECB’s turn to show it can inflate with the best of them.  They have adopted extraordinary measures despite the view of many that they have not [...]

I am certainly no dollar bull. Longer-term, I believe the dollar is a weak currency. But, in the here and now, it does seem to be holding up quite well. Whether this continues to be the case remains to be seen. Nevertheless, in the near-term, there are a number of events [...]

This post is a contribution from Rob Parteneau of MacroStrategy Edge about fiscal expansion, printing money, avoiding debt deflation, and U.S. treasuries. He has some great insights on deflationary spirals, the paradox of thrift and the desire of foreign investors to dump dollars. He also argues that the “Blame Asia Meme” is misguided as the ultimate source of credit growth in the United States is domestic. The crux of his statements is that the only way to avoid a deflationary spiral when household savings is increasing is through fiscal expansion, which is one reason I support fiscal stimulus. But, there are consequences.

This comes from Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman (bolding in original).  Chandler does NOT see an imminent switch to  Euros in the offing, despite the recent musings by Chinese officials  (Neither do I.  However, I do believe the US dollar is a weak currency.  At a minimum, gold and oil [...]

This comes via the Financial Times (Hat tip CR):
China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.
In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be [...]

This comes via the Financial Times.
The Swiss National Bank’s decision to intervene to weaken the franc has left currency investors with one less haven from the financial crisis.
Its move comes at a time when there are also questions surrounding the future haven status of two other leading currencies: the dollar and the yen.
While the dollar [...]

The U.S. dollar is getting hammered today. It is now trading near 1.34 to the euro, 1.42 to Sterling, 96 to the Yen and 1.14 to the Swiss franc. These are huge hockey stick style moves. from 1.30 to the euro, 1.39 to the pound, 98 to the yen and 1.18 to the Swiss franc just this morning. The dollar is getting killed here.