Loading ...Global Bubble Watch:
March 22 – Bloomberg (Chris Anstey and Enda Curran): “The global rush for dollars that’s been roiling the $6.6 trillion a day foreign-exchange market has showcased a missing piece of financial-safety architecture that world policy makers never addressed in the aftermath of the 2008 crisis. The financial system’s reliance on one keystone currency proved to be an amplifier of shocks more than a decade ago. Yet since then, the greenback’s role has climbed even further as borrowers outside of America ramped up dollar-denominated debt. That’s again adding an enormous layer of stress on markets. ‘It’s precisely what the global economy does not need at this moment,’ Alexander Wolf, head of Asia investment strategy at JPMorgan Private Bank… said of a strong dollar. ‘It tightens financial conditions, make servicing dollar debt more expensive, and can cause pass-through inflation just when that is not needed.’”