Friedman Blog
George Friedman of Stratfor has started a blog.
Following up on an analysis he wrote last week about tensions within the EU over monetary policy, Friedman emphasizes an important macroeconomic trend:
One interesting point to be made is, of course, about the value of the dollar. It has plunged of late relative to the Euro. That is explained not by the collapse of American civilization–as some responses have argued–but by interest rate differentials. Money moves toward higher rates. The differential imposed by the ECB compared to the Fed, inevitably reduces the value of the dollar. This is the real problem for the Europeans. The Germans can endure a more valuable Euro by the nature of their exports and the way it controls the cost of energy and other imports. The French, needed to export wine, cheese and many other things, are getting badly hurt. The Americans are quite pleased with the entire picture.
Think of the situation as one in which a power like the United States can use the ECB policy to its advantage while hurting others almost selectively.
