Links for 2011-09-06

The answer is "No: reporters somehow never ask them why they got it so wrong in late 2010, and how they have revised their visions of the Cosmic All as a result of getting it wrong. Reporters remain eager to take their quotes down and publish them as the informed views of experts." The tripe: An Open Letter to Ben Bernanke | e21 - Economic Policies for the 21st Century: November 15, 2010

The Swiss central bank pledged on Thursday to buy unlimited quantities of foreign currency to defend with "utmost determination" its cap on the franc's exchange rate against the euro."The Swiss National Bank will enforce the minimum exchange rate of 1.20 franc per euro set on 6 September with the utmost determination. It is prepared to buy foreign currency in unlimited quantities," said the bank in a statement.

By Scott Sumner: Lars Christensen recently sent me the following report from the Swiss National Bank: The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development.

From Steven Englander (Citibank), “Currency war, BoJ Style” (4/7, not online): Japan is likely to be labeled as a currency warrior by major Asian trading partners. However, the new BoJ policy has been endorsed by the Fed and IMF and is very G7 compliant, so the BoJ has cover for its policy agenda, despite the aggressiveness of its balance sheet expansion and negative implications for JPY. One can see why Japan’s trading partners might be annoyed. The Japanese yen has weakened substantially over the past few months.

From Steven Englander (Citibank), “Currency war, BoJ Style” (4/7, not online): Japan is likely to be labeled as a currency warrior by major Asian trading partners. However, the new BoJ policy has been endorsed by the Fed and IMF and is very G7 compliant, so the BoJ has cover for its policy agenda, despite the aggressiveness of its balance sheet expansion and negative implications for JPY. One can see why Japan’s trading partners might be annoyed.

Brazil’s finance minister coined the term “currency wars” in 2010 to describe how the Federal Reserve’s quantitative easing was pushing up other countries’ currencies. Headline writers and policy makers have resurrected the phrase to describe the Japanese government and central bank’s pursuit of a much more aggressive monetary policy, motivated in part by the strength of the yen.

By Edward Harrison:Reuters has reported that the Bank of China (BACHF.PK), a dealer in China's foreign exchange market, has stopped doing foreign exchange forwards and swaps with several European banks.

Today Econbrowser is pleased to feature a guest post from Johns Hopkins University Professor Jonathan Wright, in which he proposes an option for economic stimulus by the Federal Reserve. Following the Swiss Lead by Jonathan Wright