Why are equities, gold, and the dollar surging?

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July 30, 2024 — The US stock market is on a tear.  Since the start of this year, January 2024, the Dow Jones , S&P 500, and NASDAQ have each repeatedly set new all-time records.  Indeed, the trend in stocks has been strongly upward for the last two or three years.   For instance, the S & P 500 is about 40 % above where it was  in January 2021, when Joe Biden became President [43 % higher].

The price of gold has also shown a strong upward trend, reaching $2,470 an ounce on July 17, the highest in history.  Why are these assets so elevated? read more

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Let China Pay the Cost of Solar Energy and Electric Vehicles

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June 28, 2024 — Lethal heat waves this month hit the US and other regions throughout the Northern hemisphere, including India and the eastern Mediterranean.  June will probably mark the 13th consecutive month of average global temperatures that exceed all observations in records going back to 1850.  The primary explanation is, of course, that emissions and concentrations of Greenhouse Gases (GHGs) have in recent years increased even more rapidly than had been feared.

  1. A pleasant surprise

In one area, however, progress in the fight against global climate change has been greater than had been expected.  Use of solar power and other sources of renewable energy in the US and the European Union has risen rapidly.  The beginnings of an historic shift from internal combustion engines to electric–powered vehicles (EVs) have multiplied the importance of the switch to solar and wind sources of electric power. read more

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The dollar as an international reserve currency

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June 25, 2024 — A paper co-authored by Menzie Chinn, Hiro Ito, and me has just been published at the JIMF.  It finds that US size, the ability of the dollar to hold its value, and inertia continue to support the dollar’s #1 status as an international reserve currency.  And that the threat of sanctions against other countries has yet to impact aggregate global $ holdings by central banks.  (Ungated WP version.)

Chinn, Frankel and Ito: “The Dollar versus the Euro as International Reserve Currencies” read more

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