tag:blogger.com,1999:blog-2761684730989137546.post6095851328679036512..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: US, China headed for possible currency clashmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2761684730989137546.post-82326071489172219302008-12-08T22:40:00.000-05:002008-12-08T22:40:00.000-05:00Oil is priced in dollars, so the price of oil has ...Oil is priced in dollars, so the price of oil has a strong influence on the exchange value of the dollar, not the other way around. At $150 per bbl nations would have to run much higher trade surpluses with the U.S. to get the dollars they need to purchase oil. Investors see a rising U.S. trade deficit and sell the dollar.mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12499328125907200342008-12-04T01:01:00.000-05:002008-12-04T01:01:00.000-05:00Some Tidbits for Frischburger and the Norman :a. ...Some Tidbits for Frischburger and the Norman :<BR/><BR/>a. If you remember when steel was dumped on US ports by India, China, Korea, Japan, and South Africa during the commodity dollar store days in the late 1990's when oil was $0.81 per gallon in some Gulf Coast cities, the USA put up steel tariffs up to 30%.<BR/><BR/>The EU threatened George Bush with a trade war so the USA had to remove the tariffs.<BR/><BR/>However, the USA came back with an pro-export weak dollar policy that made it impossible for the steel dumping to come back again.<BR/><BR/>Also, commodity prices rose - so steel stayed local in some respects, oil prices prevented massive transport of steel, and so forth.<BR/><BR/>So if we are back to the late 1990's, the question is if Igor's analysis should be focused on to the Asian Tigers - is this region really so insulated ? i.e. the commodity price down turn could create a currency melt down in Asia ?<BR/><BR/>b. Oil prices have gone down and all the middle of the road analysts are looking for a final stable oil price of $70 / barrel.<BR/>Are the currencies going to decouple from the price of oil since central bank interest rate declines will govern currencies more than oil prices ? eg UK banks to decrease rates by 2 basis points in December - quid goes down but oil is stabilizing ?googleheimhttps://www.blogger.com/profile/14459089745473598235noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-66111130298729862712008-12-04T00:45:00.000-05:002008-12-04T00:45:00.000-05:00China's needed investment domestic demand should h...China's needed investment domestic demand should help them realize what poisonous crap they are sending overseas to the USA and elsewhere. There's a quality issue they need to address and hopefully this will met with them taking on their own makings.googleheimhttps://www.blogger.com/profile/14459089745473598235noreply@blogger.com