Is a Strong Dollar a Good Thing or a Bad Thing?

You are probably way ahead of me on this, but I’ll say it anyway: It depends.   A rising or declining dollar both affect different groups in the economy differently. A rising dollar relative to the currencies of our trading partners generally makes our imports cheaper to our consumers and our exports more expensive to […]

Patience

She promised us patience in 2015 No premature rush to tighten So, I’ll be patient too The Fed, I won’t be fightin.’ My forecast this year Is the same as in the past Rates will stir eventually And finally rise at last. (Or not!) Inflation’s low and falling Growth is in a mini-boom The dollar […]

Rolexes Just Got More Expensive–You Can’t Keep A Strong Currency Down

The Swiss National Bank, Switzerland’s Central Bank, surprised the world yesterday by removing its self-imposed cap of 1.20 francs per euro and letting the franc float higher. It also lowered its deposit rate for banks to -0.75 percent to discourage inflows of bank funds into the central bank. Yes, that’s minus 0.75 percent. (The comparable […]

Rolexes Just Got More Expensive–Or, You Can’t Keep A Good Currency Down

The Swiss National Bank, Switzerland’s Central Bank, surprised the world this morning by removing its self-imposed cap of 1.20 francs per euro and letting the franc float higher. It also lowered its deposit rate for banks to -0.75 percent to discourage inflows of bank funds into the central bank. Yes, that’s minus 0.75 percent. (The […]

New Year’s Eve in Terlingua (12/31/03)

Another year has come and gone, We’re back to New Year’s Eve. Getting ready for another year, With new goals to achieve. It’s time to buy new notebooks, Some pencils and a pen. Write down our resolutions, And start all over again. Tomorrow begins the year, To really get in shape. To get better organized, […]

Give Me Liberty Or Give Me Whole Grain Bread

We’ve come a long way—unfortunately—since our founding fathers wrote our constitution and tried to sort out the proper role of government from what should be left to the people. The recent spending bill, lauded rightly for the bi-partisan effort that went into its passage, must have left them spinning in their graves. I refer, of […]

Five Percent Growth–Wow!

Usually when a pretty good GDP number is released, I check to see how much of it is “real” and how much of it is due to inventory increases that may be building in its own reversal. Somehow, doing that today would make me a scrooge just before Christmas; so I won’t. I won’t even […]

Reserves Won’t Save the Russian Ruble

What I try to do in these posts is to comment on contemporary issues and the dialogue on financial TV through the prism of my long experience at the Fed. That experience formally began in August 1968 at the Richmond Fed as their new “international” economist. My first article for their economic review was on […]

Currency Confusion

Thursday’s WSJ had a front page article titled “Dollar’s Rise Causes Pain in Europe, Asia.” It began by stating that “A surging dollar and falling commodities prices are delivering a windfall to American shoppers and confounding central bankers by widening the gap between the expanding U.S. economy and struggling countries in Europe and Asia. The […]

Productivity is Key for Good Economic Performance

Third quarter productivity was revised to 2.3 percent growth in the third quarter, up from an initial estimate of 2.0 percent. That’s good news by recent lowered standards. This resulted in the related good news that unit labor costs fell 1 percent in the third quarter after a revised drop of 3.7 percent in the […]