A million words, a thousand sherpas, hundreds of business executives, scores of ministers. One communiqué. Any news? Last week’s G20 summit in Seoul, Korea marked another grand gathering of economic policy-makers, charged this time with spiking the ‘currency wars’, alleged to have broken out in recent months.One could be forgiven for not being too overwhelmed with worry. If the IMF’s October economic growth update is any guide, we ought not to fret. It puts global growth at 4.8% this year and 4.2% next. Putting that in context, the average since 1970 is 3.7%. Usually it is when growth pushes up to 5% that we need to get worried. At that speed things start to break– we run out of capacity, or labour - prices take off. The IMF also has world trade volume up 11.4% and 7% in 2010 and 2011, against the 40-year average of 6.9%. Of course, we should always be sceptical about the IMF’s forecasts. But if these estimates are in the ballpark, they would be of the ‘not too hot, not too cold’ variety i.e. just right. As for currency wars, it is hard to know who is fighting whom. The US is pushing more liquidity into its banking system while China is keeping currency appreciation to a minimum. To do that China must absorb forex inflows into its economy, tantamount to boosting domestic liquidity. The QSL is from JOIF Fukuoka in Japan on 1413 kHz heard from Seoul in 1999. After the Asian debt crisis I had several trips to South Korea. I would often be jet-lagged flying in from London and would sit in the dead of the night in the Westin Chosun Hotel in Seould listening to Japanese AM stations. This was one of them.
Sunday 14 November 2010
Seoul in the dead of night
A million words, a thousand sherpas, hundreds of business executives, scores of ministers. One communiqué. Any news? Last week’s G20 summit in Seoul, Korea marked another grand gathering of economic policy-makers, charged this time with spiking the ‘currency wars’, alleged to have broken out in recent months.One could be forgiven for not being too overwhelmed with worry. If the IMF’s October economic growth update is any guide, we ought not to fret. It puts global growth at 4.8% this year and 4.2% next. Putting that in context, the average since 1970 is 3.7%. Usually it is when growth pushes up to 5% that we need to get worried. At that speed things start to break– we run out of capacity, or labour - prices take off. The IMF also has world trade volume up 11.4% and 7% in 2010 and 2011, against the 40-year average of 6.9%. Of course, we should always be sceptical about the IMF’s forecasts. But if these estimates are in the ballpark, they would be of the ‘not too hot, not too cold’ variety i.e. just right. As for currency wars, it is hard to know who is fighting whom. The US is pushing more liquidity into its banking system while China is keeping currency appreciation to a minimum. To do that China must absorb forex inflows into its economy, tantamount to boosting domestic liquidity. The QSL is from JOIF Fukuoka in Japan on 1413 kHz heard from Seoul in 1999. After the Asian debt crisis I had several trips to South Korea. I would often be jet-lagged flying in from London and would sit in the dead of the night in the Westin Chosun Hotel in Seould listening to Japanese AM stations. This was one of them.
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