Currencies after the Crash: Ten Famous Economists Weigh In

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Currencies after the Crash: Ten Famous Economists Weigh In

Sara Eisen is smart.  How smart is Sara Eisen?  She can write twelve pages on currencies, invite some clever and opinionated people to write articles for her, and serve as editor of the book, and thus get top billing for a moderate amount of work.

Currencies after the Crash

There are other reasons why I think she is smart — she is an able interviewer, and maybe there is not a lot of difference between choosing people to write articles for you, and knowing what to ask someone that you choose to interview.  Both require understanding the views of the person in question.

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Be that as it may, the ten writing the represent different points of view.  Let me briefly describe each one:

1) Gary Shilling — The US Dollar has its weaknesses, but is stronger than all of the alternatives, because the US possesses a lot of strengths not found in the rest of the world.

2) Stephen L. Jen — The Chinese Yuan will become a reserve currency, but it is highly unlikely that it will significantly replace the US Dollar in the intermediate term.

3) Jorg Asmussen — The Euro can be an alternative to the US Dollar if it overcomes integration issues, and continues to deepen economic integration.

4) John Taylor — Assuming the Euro survives its imbalances, a shrinking population and sclerotic economic policies will make the Eurozone less important by 2050.

5) Megan Greene — The Eurozone will be better off if weaker nations leave.

6) Anoop Singh & Papa N’Diaye — Even though rebalancing to internal growth through increased domestic consumption will slow down Chinese growth, in the long run it will lead to a better, healthier Chinese economy and currency.

7) James Rickards — Competitive devaluation is leading to currency wars, but embracing deflation and austerity as the Euro has is the right path.  We can do the same thing globally through the IMF with their SDRs.

8 ) Peter Boockvar — We need to tie the hands of the Central Bankers, because they overshoot and make economic volatility worse.  One way to do so is through a gold or other commodity standard.

9) Robert Johnson — Much like the authors in Chapter six, except more pessimistic about whether it will happen.

Do You Want a Conclusion or Not?

This  book offers no unified point of view or conclusion, and that is a strength, because it mirrors the debate that exists in the world today.  If you are not confused, you don’t get it.  That said, the book could have been much stronger if the ten authors were allowed to respond to the other authors briefly, with a brief rebuttal from the original author.  The weakness of the book is that there is no interaction, no attempt to see how the views fight or agree with each other.  This could have been a better book, but I recommend it as it is.

Quibbles

Already expressed.

Who would benefit from this book: If you want to learn nine different views on currencies and global macroeconomics, this could be the book for you.  If you want to, you can buy it here: Currencies After the Crash: The Uncertain Future of the Global Paper-Based Currency System.

Full disclosure: The publisher sent me the book after asking me if I wanted it.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip. Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

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David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.

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