Relevant and even prescient commentary on news, politics and the economy.

Not All Global Currencies Are The Same

by Joseph Joyce

Not All Global Currencies Are The Same

The dollar may be the world’s main global currency, but it does not serve in that capacity alone. The euro has served as an alternative since its introduction in 1999, when it took the place of the Deutschemark and the other European currencies that had also been used for that purpose. Will the renminbi become the next viable alternative?

A new volume, How Global Currencies Work: Past, Present and Future by Barry Eichengreen of the University of California-Berkeley and Arnaud Mehl and Livia Chiţu of the European Central Bank examines the record of the use of national currencies outside their borders. The authors point out that regimes of multiple global currencies have been the norm rather than an exception. Central banks held reserves in German marks and French francs as well as British sterling during the period of British hegemony, while the dollar became an alternative to sterling in the 1920s. The authors foresee an increased use of China’s renminbi and “..a future in which several national currencies will serve as units of account, means of payments, and stores of value for transactions across borders.”

Camilo E. Tovar and Tania Mohd Nor of the IMF examine the use of the reminbi as a global currency in a IMF working paper, “Reserve Currency Blocs: A Changing International Monetary System.” They claim that the international monetary system has transitioned for a bi-polar one based on the dollar and the euro to a tri-polar system that also includes the renminbi. They provide estimates of a dollar bloc equal in value to 40% of global GDP that is complemented by a renminbi bloc valued at 30% of global GDP and a euro bloc worth 20% of world output. The renminbi bloc, however, is not primarily Asian, but rather dominated by the BRICS countries (Brazil, Russia, India, China, South Africa). This suggests that its increased use may be due to geopolitical reasons rather than widespread regional use.

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A thought for Sunday: the march of demographics and the 2018 midterms

(Dan here…Better late than never!)

A thought for Sunday: the march of demographics and the 2018 midterms

Below is a graph showing that the older the demographic (up until age 80), the bigger the turnout during midterm elections.
The data behind this graph isn’t just from 2014, but from a series of midterm elections over time — in other words, it has been durable over time.
My purpose in this post is show that, even if these percentages hold in this year’s midterms, the electorate is going to skew considerably less “red” than it did in either 2010 or 2014.

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Climate Change and Environmental Frames: The Consensus-Action Disconnect

(Dan here…I am always looking for new writers that might make a good fit for AB.  Jeff is in the field of behavioral economics in the private sector.  I know that the topic of climate change is a hot one here, but remember this is his first here…)

by Jeff Soplop

Climate Change and Environmental Frames: The Consensus-Action Disconnect

American attitudes toward the environment generally – and climate change specifically – could long be described as ambivalent. The Trump Administration seized on this ambivalence and spent the past year furiously censoring climate change scientists and scrubbing the EPA website of any references to dangerous words such as “greenhouse gases” and “science.”

While survey research shows more and more Americans recognize climate change is caused by human activities and believe the effects have already begun, only 45% say they worry “a great deal” about it. Despite such shifts in public attitude, it’s hard to make a case that Americans are actually growing more concerned; when President Trump announced on June 1, 2017, that the US would withdraw from the Paris Climate Agreement, his approval numbers in the following weeks didn’t take a hit.


Some might chalk this resilience up to a diehard core of Trump supporters, who were pleased with the announcement, propping up his approval ratings. But research from Yale’s Program on Climate Change Communication shows that almost 70% of registered voters want the US to stay in the agreement (including majorities of Democrats, Republicans and Independents), while only 13% don’t.

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Is the secular economic season beginning to change (Part 2)

Is the secular economic season beginning to change (Part 2)

 by New Deal democratThe selloff of a month ago may well be the harbinger of a fundamental change in the relationship between bond yields and stock prices, one that is likely to persist for the next 10 years or so, as  part of a very long term interest rate cycle that has tended to last about 60 years.

This post is up at

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Take a lesson from Stoneman-Douglas students

Dahlia Lithwick writes at Slate: We should all take a lesson from the Stoneman-Douglas students

1. Give Donald Trump Precisely 5 Percent of Your Mental Energy

They have no interest in talking to him or even about him. They have internalized the lesson that he is a symptom of the problem but unworthy of credit or blame. I suspect that if the rest of us ignored the president half as ably as they have, we’d all have vastly more emotional energy for the fights that really do matter.

2.   Don’t Waste Time Fighting People Who Don’t Share Your Values and Goals

The Stoneman Douglas students don’t seem to be wasting their time debating or negotiating with the gun lovers on the other side. They are simply working to get gun legislation passed, to raise awareness, and to energize other young people. As someone who has devoted the greater part of the past year to an intramural media debate about whether to give up completely on the other side or to strive to change hearts and minds, it’s refreshing to see that this doesn’t really matter.

3. They Don’t Seem Hellbent on Having Leaders

While a handful of students clearly took the helm in the immediate aftermath of the shooting—including Emma Gonzalez, David Hogg, and Cameron Kasky—they have been joined in recent days by Alfonso Calderon, Sarah Chadwick, Jaclyn Corin, and others. Together, they rotate on and off the cable shows; they march on Tallahassee, Florida; and they seem utterly content sharing the spotlight.

4. They Expect to Win

The kids of Stoneman Douglas really don’t much care what this president thinks, or what the NRA thinks, or even what we in the media think. The central mistake we have made this past week is trying to understand how this vast army of eloquent, purposeful, and clear-eyed students has been all-but-invisible to us until now. The better lesson we can take from them is that, thankfully, we have been almost entirely invisible to them. They are unconstrained by our norms and unmoved by our plight, and not really all that interested in our corny media tropes about childhood, suffering, and power. Good for them. It’s about time.

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What went wrong in Capetown?

by David Zetland  (reposted from Aguanomics)

What went wrong in Capetown?

I asked that question of Mike Muller, who has been working on water issues there for decades. He referred me to this op/ed he wrote and — more important — the inadequate response from a local city councillor.

[Tl;dr: Failure to invest against risk from “inadequate rain” — a problem that climate change will exacerbate.]

Taps are running dry — and we are all to blame

Water supply needs to become a substantive item on corporate boards’ agendas, writes Mike Muller

19 APRIL 2017 – 07:11 MIKE MULLER

Dry taps in two Southern African cities tell a worrying story about the failure of public officials to take a long-term view of water supply. But is it their fault alone? Or are citizens failing to hold them to account? And why is the business community, whose board agendas always include a risk-management item, not playing a more active role?

Many Capetonians just can’t wait for winter to arrive this year. It’s not just to get rid of the Gauteng tourists (although more and more summer visitors are escaping from a miserable Europe to take advantage of, for them, our low prices). Indeed, what’s wanted are more black southeasters. That’s not migrants from the Eastern Cape but the winds that, if accompanied by a stray low-pressure pattern, would bring some rain and fill the dams.

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