Comments on: Emerging Markets Outflows Highest Since 1995 http://www.nakedcapitalism.com/2008/09/emerging-markets-outflows-highest-since.html Mon, 23 Nov 2009 06:07:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: rahuldeodhar http://www.nakedcapitalism.com/2008/09/emerging-markets-outflows-highest-since.html#comment-14718 rahuldeodhar Thu, 11 Sep 2008 05:06:00 +0000 http://www.nakedcapitalism.com/2008/09/emerging-markets-outflows-highest-since-1995/#comment-14718 I guess it will go down till dollar devaluation come on the radar screens. That will come up only if domestic consumption in EM gains traction. Then you will see dollar depreciation on the horizon.<br/><br/>Then EM will be up and up - till actually dollar depreciates fully. <br/><br/>Then again it will be downhill bumps as US gains traction and starts looking attractive. <br/><br/>Expect a lot of trade related diplomacy as EMs try to corner their citizens as drivers of domestic demand and impose on other countries to corner their citizen as drivers of export demand. Lot of policy paper will change hands for sure.<br/><br/><br/>US must flip from being a consumer to being a producer. ROW must stop being just a supplier to US - when consumer goes supplier goes with them!<br/><br/>Thats the game in a nutshell. Unless I am missing something. <br/><br/>Rahul I guess it will go down till dollar devaluation come on the radar screens. That will come up only if domestic consumption in EM gains traction. Then you will see dollar depreciation on the horizon.

Then EM will be up and up – till actually dollar depreciates fully.

Then again it will be downhill bumps as US gains traction and starts looking attractive.

Expect a lot of trade related diplomacy as EMs try to corner their citizens as drivers of domestic demand and impose on other countries to corner their citizen as drivers of export demand. Lot of policy paper will change hands for sure.

US must flip from being a consumer to being a producer. ROW must stop being just a supplier to US – when consumer goes supplier goes with them!

Thats the game in a nutshell. Unless I am missing something.

Rahul

]]> By: David Merkel http://www.nakedcapitalism.com/2008/09/emerging-markets-outflows-highest-since.html#comment-14715 David Merkel Thu, 11 Sep 2008 04:34:00 +0000 http://www.nakedcapitalism.com/2008/09/emerging-markets-outflows-highest-since-1995/#comment-14715 This is the same effect that Michael Pettis described in his book "The Volatility Machine," except that it is not stemming from central bank behavior, but overall global economic growth. They are at the tail in this game of crack-the-whip. This is the same effect that Michael Pettis described in his book “The Volatility Machine,” except that it is not stemming from central bank behavior, but overall global economic growth. They are at the tail in this game of crack-the-whip.

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