tag:blogger.com,1999:blog-34323687.post5694307382170732813..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Is there anything more irrelevant than G7?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-34323687.post-83217794341958677202008-02-12T02:06:00.000+00:002008-02-12T02:06:00.000+00:00.The US Congress (it's good to know that investiga...<I>.<BR/><BR/>The US Congress (it's good to know that investigating steroids in baseball and secret taping in the NFL is more important than investigating WTF is going on in Iraq and Guantanamo.)</I><BR/><BR/><B>Congress always have their priorities in order <BR/>.</B>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-55668354731177597092008-02-11T23:33:00.000+00:002008-02-11T23:33:00.000+00:00in a past life, i was involved in the g-7 process ...in a past life, i was involved in the g-7 process (back when it arguably was still relevant ... ). and i loved the idea of doing a communique boris johnston style. its almost better than your poems ... <BR/><BR/>bsetserAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63104299476202486292008-02-11T21:31:00.000+00:002008-02-11T21:31:00.000+00:00I absolutely agree with your points, thats why I p...I absolutely agree with your points, thats why I put up the dilemma of being in such a hostile situation like the Gulf States (billions of USD denominated investments). It's a game theory kind of dilemma and I am not sure what's the best solution for the hostile players is (suppose I am not the only one around). Obviously diversification of reserves is not possible in the short term (at least not without high costs) and on the other side keeping on with the same pattern (Bretton Woods II) also looks like a loosing position. I assume that the route of unwinding the imbalances will be the one of least pain and maximum control of the process.<BR/><BR/>BTW: Thanks for the best global macro trading blog ever and the great insights. Thumbs up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11760693409040822632008-02-11T19:24:00.000+00:002008-02-11T19:24:00.000+00:00MP, I think the Gulf states (or at least those wit...MP, I think the Gulf states (or at least those with active investm,ent authorities) look at it a different way: they are sitting on gajillions of US dollars (or a commodity that can be easily turned into US dollars); that is why they6 are relatively aggressive in diversifyign away from US dollars. Saudi is a notable exception o this policy, however.<BR/><BR/>In terms of simply 'pumping more oil', I don't think it's that simple; those Gulf states in the GCC are, from what I can make out, running at close to full capacity. There probably is slack from Iran and Iraq, but we'll need a world a bit more perfect than the one we've got before that is entering world markets at full capacity.<BR/><BR/>As for how aligned are the interests of the US and the GCC, I can think of many answers, which range from "very" to "not very muchy at all." I'm nor sure, frankly, what the right one is.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-64081152880837357782008-02-11T16:31:00.000+00:002008-02-11T16:31:00.000+00:00Macro Scenario for Golf Council Countries (maybe t...Macro Scenario for Golf Council Countries (maybe too naive?):<BR/><BR/>Assuming strong balance surpluses, a weak USD, low US interest rates and higher inflation. Could that signal a strategy where oil in the ground is more valuable than petrodollars that need to be recycled? In other words, why pump it if you can't invest the proceedings in a meaningful way.<BR/><BR/>Alternatively, they could allow lower oil prices by pumping more oil out of the ground (assuming they have the power to do so), hence support the weak US economy by increased capital inflows, i.e. support the dollar, stabilize interest rates, ease inflation and free themselves and their recycled petrodollars from a hostile situation. This dynamic could also trigger other countries to keep financing the deficit and support the USD.<BR/><BR/>Any ideas? I think it sums up to the question: how aligned are the interests of GCC and US?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87334415888740857262008-02-11T16:29:00.000+00:002008-02-11T16:29:00.000+00:00Macro Scenario for Golf Council Countries (maybe t...Macro Scenario for Golf Council Countries (maybe too naive?):<BR/><BR/>Assuming strong balance surpluses, a weak USD, low US interest rates and higher inflation. Could that signal a strategy where oil in the ground is more valuable than petrodollars that need to be recycled? In other words, why pump it if you can't invest the proceedings in a meaningful way.<BR/><BR/>Alternatively, they could allow lower oil prices by pumping more oil out of the ground (assuming they have the power to do so), hence support the weak US economy by increased capital inflows, i.e. support the dollar, stabilize interest rates, ease inflation and free themselves and their recycled petrodollars from a hostile situation. This dynamic could also trigger other countries to keep financing the deficit and support the USD.<BR/><BR/>Any ideas? I think it sums up to the question: how aligned are the interests of GCC and US?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84553491929974704962008-02-11T16:10:00.000+00:002008-02-11T16:10:00.000+00:00The whole system is so brutally manipulated its hy...The whole system is so brutally manipulated its hysterical. Its nothing but an inflation machine.Jameshttps://www.blogger.com/profile/12183085827525696523noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71552433289722728732008-02-11T12:46:00.000+00:002008-02-11T12:46:00.000+00:00AT, good call on Italian parliamentarians.As for I...AT, good call on Italian parliamentarians.<BR/><BR/>As for INR, India may well be less dependent on foreign demand for exports...but the converse of that is that it is much more reliant on foreign demand for financial assets. I'll let you judge for yourself whether that's a good tradeoff or not in this environment.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-81210502130109952582008-02-11T10:54:00.000+00:002008-02-11T10:54:00.000+00:00Hi MM,in a piece published on Saturday, February 9...Hi MM,<BR/><BR/>in a piece published on Saturday, February 9th, 2008, Mr. Federico Rampini (one of the most influential columnist writing for the Italian newspaper “La Repubblica”, based in Bejing) mentioned a piece of research from GS apparently suggesting a long Indian rupee vs. short Chinese renmimbi strategy. The rationale is as follows: both countries are facing rising inflation pressures, but India is said to be less dependent on exports than China is. Indian monetary authorities would therefore have much more room than their Chinese counterparts for raising domestic rates, which could lead to rupee appreciating vs. renmimbi… What do you think of that?<BR/><BR/>As for as your list is concerned, my entry is “all Italian MPs from 1948 on…”<BR/><BR/>ATAnonymousnoreply@blogger.com