The Misalignment of the United States Dollar and the Japanese Yen: The Problem and its Solution

1984 ◽  
Vol 27 (1) ◽  
pp. 42-58
Author(s):  
David C. Murchison ◽  
Ezra Solomon
2011 ◽  
Vol 51 (1) ◽  
pp. 411
Author(s):  
Noll Moriarty

Accurate forecasts for medium-term commodity prices are essential for resource companies committing to large capital expenditures. The inaccuracy of conventional forecasting methods is well known because they tend to be extrapolations of the current price trend. The inevitable reversal catches many by surprise. This paper demonstrates that medium-term (2–5 years) commodity prices are not strongly linked to economic health and commodity demand-supply, but are instead inversely controlled by supply-demand for the United States dollar (USD) and consequent valuation. P90, P50 and P10 projection bounds for future valuation of the USD are presented based on the successful probabilistic techniques of the petroleum exploration industry. This allows probabilistic projections for the oil price, which is inversely related to the USD valuation. I show that the USD is significantly undervalued at present. Probabilistic projection of the USD valuation indicates that likely appreciation will put downward pressure on commodity prices for the next 2–5 years. If the USD premise is correct, likely appreciation of the dollar during the next 2–5 years will hold stable, or even decrease, oil price to around USD $50 BBL. This is a contrary expectation to most forecasts—one which, if it eventuates, should give cause for reflection before committing to large capital expenditures. Further investigation could examine the extent to which the USD valuation can be modelled as a fractal phenomenon. If so, it would mean the USD valuation is not driven by conventional economic fundamentals; instead, it is a semi-random number series with serial correlation. If true, probabilistic forecasts of the USD can be significantly improved, hence that of medium-term commodity prices.


1977 ◽  
Vol 39 (2) ◽  
pp. 131-156
Author(s):  
Arthur Karasz

There are several crucial reasons for the need to reform the world economy. First, the worldwide inflation, a terrible cancerous disease which, if uncontrolled, might destroy the roots of economic development. Second (a direct consequence of inflation), a sudden imbalance in our international monetary system: capital flight in monstrous dimensions, devaluation of important reserve currencies, the United States dollar, the English pound, followed by the Japanese yen and a number of European currencies. Third, growing unemployment all over the world, again as a consequence of inflation and of a worldwide lack of confidence. Finally, but not least, the growing conflict of the developing countries, mainly in the Southern Hemisphere, with the industrialized world mainly in the Northern. This north-south struggle, brewing for long years, has reached the dimensions of what we might call an “economic cold war” on a worldwide level. Thus far, efforts to find new solutions which would be satisfactory to both consumers and producers have failed.


1954 ◽  
Vol 8 (4) ◽  
pp. 560-565

The ninth annual report of the International Bank for Reconstruction and Development which was transmitted to the Board of Governors on September 24, 1954, covered the activities of the Bank from July 1, 1953, through June 30, 1954. During this period 24 loans had been made in 16 countries, a total of $324 million the highest for a year period in the Bank's history. In all, the Bank had made 104 loans and $1,914 million of the Bank's funds were committed in 34 countries. Total effective loans outstanding and held by the Bank on June 30 amounted to $1,663 million. The greater part of the year's lending, the Bank reported, had been for improvement in basic services; $119 million had been lent for expanding and improving transport facilities and $107 million for expanding electric facilities. Disbursements during the year had been the equivalent of $302 million on new and existing loans, bringing total Bank disbursements to $1,406 million. Disbursements which borrowers spent in Europe had increased during the year from the equivalent of $68 million in 1952–1953 to $115 million. The report noted the growing importance of operations in currencies other than the United States dollar, as indicated by the increase in the proportion of disbursements repayable in other currencies to 27 percent. This increase, it was reported, reflected the larger sums made available to the Bank from capital subscriptions paid in by members in non-dollar currencies and from borrowing outside the United States. Net income of $20 million was added to the supplemental reserve, increasing it to $97 million; the Special Reserve, to which the one percent commission on outstanding balances of all Bank loans was credited, was increased by $12 million, making a total of $49 million.


1950 ◽  
Vol 4 (2) ◽  
pp. 322-323

During the month of November 1949 the International Monetary Fund sold $22.5 million to Brazil, and the government of Costa Rica repurchased $1.25 million. The Fund concurred in a change proposed by the United Kingdom government in the par value of the British Honduras dollar effective December 31, 1949. In terms of gold and in terms of the United States dollar of the weight and fineness in effect on July 1, 1944, the parities for the British Honduras dollar were: 0.622 grams of fine gold per British Honduras dollar and 1.429 British Honduras dollars per United States dollar.


1949 ◽  
Vol 3 (3) ◽  
pp. 536-538

In its monthly summary of transactions, the International Monetary Fund announced in April 1949, that it had sold U.S. $7,500,000 to India for rupees during March. There were no other currency exchanges that month. In April, Brazil and Egypt made their first currency purchase from the Fund: Brazil exchanged cruzeiros for $15 million and Egypt $3 million for Egyptian pounds. This brought the total of currency transactions made by member countries of the Fund to $725,483,380.91 since the beginning of operations in March 1947. On May 24, the Fund announced the establishment of the initial par value for the Yugoslav dinar at 50 dinars per United States dollar, the rate proposed by the government of Yugoslavia. On May 3, the Articles of Agreement of the International Monetary Fund and the International Bank for Reconstruction and Development were signed by the Siamese ambassador to the United States on behalf of Siam. This brought to a total of 48 the number of countries that were members of the two organizations. The Fund announced on May 27, the conclusion of consultations with the government of Ecuador on Ecuador's exchange system, and on related matters of credit and monetary policies. As a result of previous consultations with the Fund, Ecuador in June 1947 had introduced certain modifications in her then existing exchange control laws and regulations which were contained in the Emergency Law for International Transfers. As a result of discussions concluded in May the Emergency Law was to be continued for one year more on the understanding that in the meantime consultations between Ecuador and the Fund would take place regarding modifications in the present exchange system.


2021 ◽  
Vol 16 (2) ◽  
pp. 379-390
Author(s):  
Candra Mustika ◽  
Erni Achmad

The purpose of this study was to determine and analyze the development of exchange rates, labor, and economic growth, and exports of Indonesia and Malaysia to China from 1993 to 2015 and to analyze the effect of exchange rates, labor, and economic growth on Indonesian and Malaysian exports to China from 1993 to 2015 Based on the results of research The development of Indonesian exports to China fluctuated or fluctuated during the period 1993 to 2015 with an average of 13.95%, while the rupiah exchange rate against the United States dollar and economic growth also fluctuated the average growth the rupiah exchange rate against the United States dollar was 14.52%, and the average economic growth of 4.69% labor also fluctuated with an average growth of 1.72%. Based on the results of the panel data regression shows the exchange rate variable has a significant negative effect on exports to China, the labor variable has a positive and significant effect on exports to China, while the economic growth variable has no significant effect on exports to China.  


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