Stephen Roach
Stephen Roach
accounting broader close component economy global hits large measures percent trade
Global trade is an increasingly large component of the world economy -- now accounting for close to 25 percent of global GDP. So when world trade hits the wall, so should the broader measures of global output.
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There is good reason to believe that a sharp weakening in the value of the U.S. currency is essential to the global rebalancing that must begin to take place if the world's current account imbalances are to be corrected,
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I fully expect that the Chinese officials will address these tension points, but will not waver from their steadfast commitment on a medium- to longer-term basis of an open capital account and currency convertibility,
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The case for a classic U.S. current account adjustment grows more compelling. This could lead to renewed weakening of the dollar and higher long- term real interest rates.
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The United States has long drawn comfort from the quality differential of its educational system. However, in the Internet Age with its ubiquitous diffusion of knowledge, innovation, and technological change, that may turn out to be an increasingly false sense of security.
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The risk is that he will be blind-sided, as his predecessors were, very early in his tenure by something he is not all that well prepared for and by something that the markets do not have confidence in him for.
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The same distortions, in my view, could well be explaining a lot of the recent strength in the remainder of the U.S. data flow. If that's the case, all it will take is for the weather to return to normal and the seasonally adjusted data will fall like a stone.
business cycle goods modern resulting shock war
An extraordinary deflationary shock in tradable goods has coincided with outsize disinflation in services, resulting in the most deflation-prone business cycle of the modern post-World War II era.
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Europe looks at China as more of a strategic partner than a competitive threat so it has stayed more out of the currency debate than the U.S..
borrowing endgame last needs risks seemed system unstable
Borrowing from physics, the last thing an unstable system needs is a shock. And yet the risks of just such a disturbance have never seemed higher. Far-fetched as it seems, the possibility of a more perilous endgame is rising.
global oil outright prospects recession shock
As the prospects of a full-blown oil shock rise, the prospects of outright global recession in 2005 loom more and more likely.
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Like it or not, the experience of the 1980s demonstrates that supply-side tax cuts are not self-financing. In my opinion, similar results can be expected from the multi-year tax cuts now on the table in Washington.
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Unlike the case a decade ago, I view the coming normalization of Fed policy as a much more serous threat to economic recovery in the U.S. and the broader global economy,
gone
We've gone from one bubble, in stocks, to another, in housing.