From the memo :
The dollar has strengthened sharply with respect to the currencies of many industrialized nations and emerging markets to reach a 20-year high. This appreciation of the dollar is viewed as a major global challenge for most countries, especially emerging market economies. In the past, many countries would have embraced a strong dollar; indeed, emerging market countries like China often intervened in foreign exchange markets in the hopes of weakening the value of their currencies to gain trade advantage. But today both advanced and emerging countries alike are struggling against further depreciation of their currencies for a range of reasons.
Here’s the graph from the memo:
And here is a time series from 1973, in inflation adjusted terms, of the US dollar.
Figure 1: Real value of trade weighed US dollar, against broad basket of currencies. Trade weights for goods until 2006M01, trade weights for goods and services. NBER defined peak-to-trough recession dates shaded gray. Source: Federal Reserve via FRED, NBER, and author’s calculations to splice series.
January 15, 2018
Real Broad Effective Exchange Rate for China, Germany, India, Japan and United States, 1994-2022
(Indexed to 1994)
January 15, 2018
Real Broad Effective Exchange Rate for China, Indonesia, Brazil, United Kingdom and France, 1994-2022
(Indexed to 1994)
October 26, 2022
Climate Pledges Are Falling Short, and a Chaotic Future Looks More Like Reality
With an annual summit next month, the United Nations assessed progress on countries’ past emissions commitments. Severe disruption would be hard to avoid on the current trajectory.
By Max Bearak
Countries around the world are failing to live up to their commitments to fight climate change, pointing Earth toward a future marked by more intense flooding, wildfires, drought, heat waves and species extinction, according to a report * issued Wednesday by the United Nations.
Just 26 of 193 countries that agreed last year to step up their climate actions have followed through with more ambitious plans. The world’s top two polluters, China and the United States, have taken some action but have not pledged more this year, and climate negotiations between the two have been frozen for months.
Without drastic reductions in greenhouse gas emissions, the report said, the planet is on track to warm by an average of 2.1 to 2.9 degrees Celsius, compared with preindustrial levels, by 2100.
That’s far higher than the goal of 1.5 degrees Celsius (2.7 degrees Fahrenheit) set by the landmark Paris agreement in 2015, and it crosses the threshold beyond which scientists say the likelihood of catastrophic climate impacts significantly increases.
With each fraction of a degree of warming, tens of millions more people worldwide would be exposed to life-threatening heat waves, food and water scarcity, and coastal flooding while millions more mammals, insects, birds and plants would disappear.
Wednesday’s report comes less than two weeks before nations are set to gather at U.N. climate talks in Sharm el Sheikh, Egypt, to discuss unfulfilled promises and take stock of the fight to stave off environmental catastrophe….
October 25, 2022
Demand for solar renewables will grow much faster than anticipated
By Djoomart Otorbaev
In a previous article, * it has been shown that generation of renewable energy is growing at an unprecedented rate. Even that pace is still not enough to achieve carbon neutrality on the planet by 2060. These days, the most impressive developments are taking place in the solar energy market.
Between 2010 and 2022, the cost of electricity generated by solar photovoltaic (PV) technologies has dropped tenfold. By 2030, solar instalments will become cheaper than fossil fuels in most countries worldwide, which is the key to accelerated public and private investment in this sector for years to come. Installation costs have also been reduced, driven mainly by improved module efficiency and economies of scale. As a result, the total cost of PV solar energy generation between 2010 and 2021 has decreased from $4,808 per kilowatt-hour to $857 per kilowatt-hour.
Given its priority for solar energy development over the past 10 years, China has become the undisputed leader in this direction. Its global market share in all critical stages of the production of solar installations has exceeded 80 percent. And for crucial battery elements such as polysilicon and wafers, that proportion will soon rise to more than 95 percent.
To prevent their solar panel companies from going bankrupt, some leading countries have imposed draconian import duties on Chinese products, placing the burden of additional costs on the end consumer. Such duties have been introduced by the U.S., the European Union (EU), the UK and India.
But these measures have not worked. According to the data from Chinese customs, the exports of China-made solar panels to the EU, for example, grew by 138 percent in the first eight months of 2022 compared to the same period in 2021.
The unprecedented rise of energy prices around the world has become, and will continue to be for a long time, the main factor in the growing demand for renewables. Despite government subsidies making it easier for European households to pay their bills, they are several times higher today than in 2019-2020. The massive growth in sales of solar installations is determined by the fact that solar panels, unlike wind turbines, can be used by millions of ordinary consumers in residential buildings.
Enterprises have also increased their interest in using solar panels as they do not receive government subsidies….
Djoomart Otorbaev is the former prime minister of the Kyrgyz Republic, a professor of the Belt and Road School of Beijing Normal University.
Now this is just an open question, don’t get verklempt hypersensitive type people, ok?? It’s an o-p-e-n question. For Puh-huds, for bachelor’s degree holders, for non-GED attainers…… for hs drop outs…… That means you decide the answer. Is that Cool??–or what?? If some Latin American country had a strong home currency, and it was severely hurting America economically, how much government funded salary/time do you think they would pay their home economists some “visiting scholar” pay or some grant, etc… government money/tax funds…… to sit around and pretend they gave a damn about the quality of life effects on America??
Just Biffy in Yates Center Kansas whose state never has federal dollars or state dollars to have basic funding for public schools and educate their own children wondering here.
Just wondering with my simple smalltown/rural mind here.
Well, what is funny is how nobody is going around bragging about the Strong Dollar. For Americans it does have some virtues, one of which is reducing inflationary pressure, but given that most Americans think inflation is too high, with this perception the leading reason why GOP may take the House if not the Senate, that other nations are facing worse inflation because of our strong dollar, is of zero importance.
Of course , if the dollar were collapsing like what they have seen in UK, one can imagine political opposition would be complaining a lot about this failure of macho strength on the part of the administration , and there would be all kinds of negative headlines about it. But the strong dollar? Nary a word.
there is a segment of your profession that thinks a strong dollar is bad news, which i recall because i was confounded by the thought when i first heard it…i believe Dean Baker and Jared Bernstein are among them, which may account for why you aren’t seeing any bragging about it from the administration….
The problem of dollar strength is a recurring one. The middle peak in Figure 1 coincides with the Asian crisis, the Tesebono crisis and Russian default. Back then, there wasn’t even a big rise in U.S. rates.
For many emerging market economies, it’s not just dollar strength that’s a problem. Dollar weakness hurts their export earnings. Dollar stability, both directions, matters. In both financial and economic terms, decisions made at one exchange rate don’t work at some other exchange rate.
The Fed is frequently criticized for hurting the rest of the world in pursuit of its domestic goals. It wasn’t too many years ago that some financial officials grumbled about the Fed engaging in currency manipulation in through quantitative easing.. The dollar is important. No escaping its effects.
Newsworthy: “ Zelensky: Putin troop mobilization ‘frank admission’ that Russian army has ‘crumbled’”
Not newsworthy: “ Ukraine apparently lacks soldiers: military announces mobilization – for “everyone under 60”” https://www.merkur.de/politik/ukraine-krieg-russland-mobilisierung-wehrpflicht-armee-militaerkommissar-vorladung-91871749.html [Merkur is Bavaria’s most widely read newspaper]
[isn’t this equally a frank admission that the Ukrainian army has crumbled, despite the spin Maksymov puts on it?]
This is another example of how the “Ukraine is winning” narrative is shaped…by omitting stories that may indicate that Ukraine is struggling.
More: “ The personnel situation in the Ukrainian army is apparently tense: it urgently needs to be strengthened, said Kyiv’s top military commissar, Yuriy Maksymov.
Ukraine therefore wants to mobilize again. Mobilization in Ukraine: summonses for draftees under 60 In an interview with the Ukrainian television station tsn, Maksymov said there was a need for additional personnel in the Ukraine war. Ukraine must further increase its potential.That is why the mobilization in Ukraine will continue. “We all see that our army is confidently conducting offensive actions in certain directions,” the military commissar praised the army. However, he described further mobilization of the military forces as necessary.
On Saturday (October 22) Ukrainian President Volodymyr Zelensky signed a law on voluntary registration of women for military service. Men are still required to do military service. According to the military commissioner, all conscripts under the age of 60 would soon have to reckon with a summons. Refusals face a prison sentence of up to five years. War against Russia: Highest level of mobilization in Ukraine “We are now at the highest level of mobilization,” Maksymov said.”
“ Since an informed citizenry is the basis for a healthy democracy, independent, non-corporate media are more crucial today than ever before.” —Dahr Jamail
I guess you are hoping Ukraine has no more soldiers since it makes Putin’s war crimes even easier. Come on dude – Russians raping Ukrainiansgirls is not something any decent person would celebrate. So why do you take such glee in their suffering?
Sure, Ukraine having troop availability problems too. But moralel and organization and logistics far superior to mess on Russian side. As it is, things going more slowly on all fronts thanks to rain and mud.
I think it is admirable that an entire nation is signing up to defend itself in Ukraine. it is a battle they believe is right. on the other hand, recruits are leaving Russia in droves because they do not want to die dishonorably and with waste. Johnh, the propaganda you spin here competes with ltr.
ltr is really bad but in my view supporting blatant war crimes is far worse.