International finance
By John Schroy, on May 23rd, 2009 |

Who determines the ‘world reserve currency’? Central bankers? IMF officials? College professors?
The answer is ‘none of the above’. In an open, global economy, the world reserve currency is determined by the judgment of millions of importers and exporters in many countries.
The world reserve currency is decided by consensus and the personal decisions of exporters as to what currency they will accept for their goods.
On this basis, it’s too early to count the dollar out.
The nuclear option
By John Schroy, on May 15th, 2009 |

The Obama administration is passing deficit spending programs of such magnitude that inflation is inevitable unless steps are taken to remove money that will be pumped into the economy as the government pays its bills.
The classical solutions are to sell government bonds, increase taxes, or increase bank reserve requirements. The last tactic can be extremely effective if carried to the extreme. This is what I call ‘The Nuclear Option’.
Post Modern Security Analysis
By John Schroy, on May 11th, 2009 |

Security market observes have long noted that investors seem to jump hither and yon, like the synchronized swimming of schools of fish.
This phenomenon is given the mathematical term ‘covariance’ and a numerical measure called ‘beta’.
Covariance is a central concept in Modern Portfolio Theory, and also in Technical Analysis with the saying ‘the trend is your friend’.
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