Speculators love peg devaluations. They look at countries with fixed exchange rates and wait for the peg to snap. Peg defense is constrained by the volume of reserves. It is a finite game. The...
Gurus present the carry trade as a simple way to collect passive interest. They tell you to borrow a low-interest currency and buy a high-interest one. They call it free money. What they hide is...
Speculators think they can fight central banks. They see a fixed peg or a floating currency experiencing heavy interventions, and they try to buy or sell against the flow. That is financial...
Currencies don't float because of news headlines or Twitter rumors. They float because of massive global trade flows. The Balance of Payments (BoP) is the macroeconomic ledger that dictates...
Academic economists treat Interest Rate Parity as a theoretical model. I treat it as a hard boundary. If you trade without understanding how interest rates constrain currency values, you are...
In the latest meeting of the Federal Reserve, the decision to keep the target range for the federal funds rate at its 22-year high, between 5.25% and 5.5%, was confirmed. This announcement...
When analyzing the economic data of a nation, conducting analyses and comparisons of performance among different counterparts, Switzerland always manages to bring a smile to my face. This is...
Inflation is a fundamental economic concept that refers to the sustained increase in the general level of prices for goods and services in an economy over time. It is a crucial indicator for...
In the intricate realm of macroeconomics, one of the central topics that captures the attention of economists and investors alike is Purchasing Power Parity (PPP). This concept plays a...
Public debt continues to grow, a well-known fact. However, dear readers, it is important to understand that debt is directly proportional to economic growth. In other words, debt is related to...
