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"However, such a massive recent and projected expansion of the European Central Banking system balance sheet should have an eventual impact through diverse channels"
It doesn't seem like he believes the link between QE and currency levels are legit, but rather the market perception will drive these the euro downward
I think the chartalist view is that QE doesn't alter the exchange rate per se. The EURO is probably losing value because the supply of currency is greater thatn demand. The dollar lost a lot of value because of the carry trade. But hey, I'm no expert.
3 comments:
"However, such a massive recent and projected expansion of the European Central Banking system balance sheet should have an eventual impact through diverse channels"
Absolutely.
But not sounding overly MMTish there, Marshall.
This Guy says the QE by the ECB will drive the EURUSD to 1.1000
http://seekingalpha.com/article/318540-why-the-new-conventional-wisdom-means-the-eur-usd-will-be-1-1000
It doesn't seem like he believes the link between QE and currency levels are legit, but rather the market perception will drive these the euro downward
I think the chartalist view is that QE doesn't alter the exchange rate per se. The EURO is probably losing value because the supply of currency is greater thatn demand. The dollar lost a lot of value because of the carry trade. But hey, I'm no expert.
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