Well, maybe not anymore. And perhaps not even before.
The quote is from an article on how the weak dollar is raising the costs of traveling to Europe, as the USD/EUR rate flirts with 1.40. The longer quote, from yesterday’s NYT article entitled “As Dollar Crumples, Tourists Overseas Reel”
, is:
Expenditures continue to rise. More appropriations will likely be needed at this pace.
More speculation on the Yuan’s prospects. From Bloomberg:
…but mostly due to increasing oil prices.
In a post over a year ago, I observed that the relative stability of the dollar would come to an end as a confluence of events occurred. Those would be the end to rises in the US interest rates, and the continued increases in policy rates abroad, especially in the euro area and the UK, against a backdrop of a massive current account deficit that requires large and continuous infusions of saving from the rest of the world (and indeed consumes most of the world’s excess saving).
Long term yields have jumped up, as Jim noted. The spread between the 10 year and 3 month interest rate has moved positive.
The BEA released the end-2006 net international investment position (NIIP) today.
What does the empirical literature say about the sources of inflation movements in an era of globalization?
Some delayed reflections on the May import/export price release, and how to interpret the data in light of the empirics of exchange rate pass through.