US President Trump recently bemoaned the fact that the euro is undervalued. While his critics complain that he is prone to exaggeration, in this case, the euro is undervalued. This Great Graphic is a long-term chart of the euro has moved around its purchasing power parity as measured by the OECD. Currently, the euro is about 22% …
Nearly every investment strategy seems to fall in one of three buckets. There is trend-following–go with the underlying direction of prices–and its opposite, mean reversion, look for the trend to be reversed. Lastly, there are arbitrage strategies. We would put carry trades, where a low yielding currency is borrowed to finance the purchase of a …
While hearings on US President-elect Trump’s nominees will begin this week, the Republicans are preparing dramatic changes in taxes. In this note, we will look closely at one element of the proposed tax changes that involve trade. It is the border tax adjustment. In essence, the proposal calls for export revenue (not just profits) to …
The Better Way: Backing into Smoot-Hawley and Repeating the Flaws of PPP Read More »