I do.
Israel's strong economic performance will lead to a strengthening of the shekel to NIS 3.5/$ by June, according to a review by Bank of America Merrill Lynch. According to the investment house's COMPASS model, the shekel is 20% undervalued against the US dollar. Pic. BoI's Stanley Fisher.
8 comments:
Over the long term, wouldn't Israel's strategy be to keep the shekel undervalued?
It cant be done.
It can't be done? You should tell the Chinese. If the government is willing to and has trillions of $ (which the Chinese do) then it can be done for a good many years. Keynes said "in the long term, we are all dead", so textbook propositions that X is impossible in the long term are meaningless. We all (especially politicians) live in the present.
K
We are 7 million, the Chinese are 1,500,000,000. What is allowed to Jupiter, is not allowed to a cow. (In Latin sounds better)
Quod licet Iovi, non licet bovi.
Isn't this proportional? In other words, it takes the Chinese government trillions to keep its currency below a market level but it would only cost Israel billions.
And every good Muslim knows Jews are monkeys or pigs, not cows.
K
And the Chinese are not Roman gods.
In fact, bovis means ox.
The difference between China and Israel is that Israel tries to be acceptable to the EU and to the USA and has no margin of maneuver, while China can ignore American demands for a long time or forever.
Bovis means either cow or ox.
I take your point in general but one could argue the other way - the Chinese exchange rate is very much on the minds of the US and EU (China may not listen to them but that is another story). Israeli imports have such a small impact on the balance of payments that an undervaluation may slip below the radar of policy makers. That which is forbidden to cows may be permitted for mice.
K
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