Nov. 13, 2009 - Erwan Mahe - One of the characteristics of deflationary spirals, when they come at the end of “unbalanced” economic growth cycles (unbalanced in terms of trade and payment balances), resides in the fact that natural devaluations are the only way for the hardest hit nations to dig themselves out of the hole.

The increased competitiveness of a nation’s currency resulting from such measures initially enables it to reboot its exports to the extent that it has competitive goods to sell, which explains the worries about the UK, which has often been caricaturised as more of a service centre (financial) than an industrial nation.

Nov. 6, 2009 (Erwan Mahe) If there is one credit situation we have been paying particular attention to, it is surely China’s! The country is the only region where the term, credit wave, has any real meaning. Unlike their less directed western peer, domestic banks apply government orders to the letters to open the main credit spigots in order to offset the collapse of world trade last year.