Hugh Hendry, my favourite sceptic

There is almost nothing that Hugh Hendry isn’t sceptical about, and that makes for an excellent sounding board, when you want to double check a bullish premise listen in, the same goes for a bear call. I watched him go toe to toe with Joe Stiglitz once and was impressed, he knows his brief. In this clip from Bloomberg he talks about his belief that the Euro is finished. (hat tip on the clip to creditwritedowns)

Hendry also talks about his belief that the noose is getting tighter in Asia, I would concur, there has to be a rebalancing and even a managed economy like China’s cannot stop that from happening, the Euro will go through a competitive devaluation and we can all go back to competing in the ‘new normal’.

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Competitive devaluation?

Anybody who follows the well known finance blog Credit Writedowns will know that one of the trends coming about (according to author Ed Harrison) is that we are going to see a competitive devaluation, where USD and Euro purposely look to go lower, the other alternative is that the Chinese opt to float their currency and allow some appreciation. This is happening right now, it is no coincidence that the Yuan is going to see some rule loosening, it is that or face the alternative which is a move by USD as low as it can go to re-establish equilibrium between the surplus/deficit nations.

While competitive devaluation is not the subject, it is touched on by several different facets of the conversation, well worth viewing.

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