Are you sure you're representing Mish accurately? Yes, he reports this notion (or theory, as he dubs it), but he then goes on to produce two rather non-correlated charts, suggesting that the theory is unfounded, i.e. whatever is supporting the dollar, it's probably not foreign purchases of US Treasuries.
(Disclaimer: I'm no economist, but I don't see that Mish's post could really be read any other way.)
Anon, you're right, Mish suggests it's not so, but then there's other factors affecting the dollar. Isn't this the problem with humans and their affairs - the complexity of the causal network? To adapt an old Jewish saying, when two economists meet, there are three opinions.
However, the UK (either directly or as a conduit) has massively increased its US Treasury holdings within the last couple of years, and I'll be interested to see the state of play when the revised official figures are published. Perhaps there's a hope that if we all clap hands, Tinkerbell will live.
5 comments:
not long, there are no fundamentals behind the rally. not that that will help the pound, by yuan, yen and even euro will suffer..
So you're a gold bug now, faute de mieux?
Are you sure you're representing Mish accurately? Yes, he reports this notion (or theory, as he dubs it), but he then goes on to produce two rather non-correlated charts, suggesting that the theory is unfounded, i.e. whatever is supporting the dollar, it's probably not foreign purchases of US Treasuries.
(Disclaimer: I'm no economist, but I don't see that Mish's post could really be read any other way.)
Anon, you're right, Mish suggests it's not so, but then there's other factors affecting the dollar. Isn't this the problem with humans and their affairs - the complexity of the causal network? To adapt an old Jewish saying, when two economists meet, there are three opinions.
However, the UK (either directly or as a conduit) has massively increased its US Treasury holdings within the last couple of years, and I'll be interested to see the state of play when the revised official figures are published. Perhaps there's a hope that if we all clap hands, Tinkerbell will live.
...oh, and I've just noticed this story, suggesting collusion to support the dollar:
http://jessescrossroadscafe.blogspot.com/2008/08/g7-plans-to-support-us-dollar-in-case.html
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