Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zman Market Timing -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (696)	11/1/2013 11:51:55 PM
From: zman69	Respond to of 15903

German success has been the function of having an artificially undervalued currency thanks to the Euro which is kept low due to Southern European woes. If Germany were to go back on the D-Mark their competitiveness would evaporate due to what would be a skyrocketing D-Mark. Both Germany and China have high trade surplussed thanks to massively undervalued currencies, one as a result of outright manipulation, the other the result of a flawed currency union.

To: skinowski who wrote (696)	11/2/2013 12:03:41 AM
From: zman69	Respond to of 15903

This is a very long read, but also a very informative one on the Global imbalances. If you have the time it is well worth a read. blog.mpettis.com "In Germany, as I have argued many times before, the constraint on consumption growth occurred as the combination of “voluntary” wage constraints around the turn of the century and a weak “German” euro caused by monetary union with countries that have structurally weaker currencies (and remember that an undervalued currency is effectively a tax on consumption that subsidizes the tradable good sector). In China it was a combination of slow wage growth (relative to productivity growth) financial repression and an undervalued renminbi."