monetary policy

Money as a commodity

Mar, 03/23/2021 - 14:42 -- anegrete

One year after the global closure due to COVID-19, exchange rates responded to financial markets more than to macroeconomic conditions. This is due to the depth that financialization has reached in the economy and the influence that the Fed's policies have on international markets.

Unlike the textbooks, where exchange rates are a reflection of economic growth, inflation and international reserves, the relationship of the exchange rate with these national variables is increasingly questionable.

Central bank intervention in exchange rates has been minimal. When the exchange rate responds more to financial variables than to real ones, the depth and degree of development of each country's financial sector is more important.

 

Gold: between fear of the dollar and speculation

Mié, 09/02/2020 - 14:43 -- anegrete

Record gold prices from 2019 onwards express the vulnerability of the international monetary system resulting from the US-China trade war and recently the impact of the COVID-19 on the global economy.

If the price of gold is linked to movements in the international financial markets and the expansive monetary policy of the US central bank: Does the current price of gold express speculation? Are there expectations of crises arising from the pandemic shock?

The current price of gold expresses the value of refuge in the face of a situation of uncertainty, channeled by investors through two large funds. The expectations of crisis were already in 2019 when the price began to rise as a reflection of the trade war and the fall in American GDP growth.

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