Economic Rebalancing

The global economy is horribly out of balance, with the United States going deeper into debt each year as a result of a huge trade gap. This blog describes the process of global economic rebalancing. If you have any comments or questions about the posts here, please don't hesitate to use the comments section.

Monday, December 04, 2006

The rebalancing process didn't seem to make much progress in the first half of November, as the financial sector stepped up money creation and the stock market rallied. In the last two weeks, however, the dollar has taken a bit of a dive against the Yen, the RMB and (especially) the Euro:
Once year end bonuses are paid out on Wall St., it may finally be time to let the rebalancing process go forward at full strength.

Meanwhile, the housing market continues to stall. Lately the National Association of Realtors seems to be acknowledging that the market is bad, but has been trying to call a bottom with every new data point. Their spin on the latest Pending Home Sales numbers is that they are "stabilizing." Hmmmmm. Doesn't look very stable to me: