CHB - Currency Regime Shift Effects Overrated

• I have seen a fair amount of chatter about currency regime shifts. Although such an event may be happening, there is no particular reason to get too excited about it from the perspective of the developed countries.
• The events of recent years hopefully have made corporations more cognisant of the risks associated with offshoring, and we might see less deflationary pressure from cheap imports.
• In the longer term, the historical tendency of money market investors is that they cannot keep banking system spreads much higher than 20 basis points above government rates once default jitters subside.

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