Myths and Realities of the Dollar
Hard-landing scenarios for the dollar once again abound. Op-ed pieces and some investment-bank newsletters warn of a massive flight from the dollar and dollar assets, leading to much higher U.S. interest rates and possibly a renewed recession. That, in turn, would hurt Asia and Europe's exports. Many of these alarmist scenarios revolve around the myth that the main reason the dollar has not yet crashed is that Asian central banks, particularly those of China and Japan, are buying dollar assets to protect their exports. Should they stop, the hard landing would ensue.
These fears, so reminiscent of similar false warnings when the dollar hit record highs in the mid-1980s, are fed by myths as well as facts.
The basic reality is straightforward. The U.S. trade deficit in goods and services stands at a record 5.3% of gross domestic product. Clearly, this percentage cannot expand indefinitely. The dollar has already corrected sharply against certain key currencies, notably the Euro. In the last three years, the dollar has fallen 34% against the Euro and 22% against the yen. Anticipation of further declines might prompt investors to move away from dollar assets. Thirdly, despite occasional lip service about a strong dollar, U.S. Treasury Secretary John Snow appears to welcome even further declines, as long as the movement is slow and steady. Mr. Snow's only major complaint is that China has not yet let its currency join in the action.
Yet, as U.S. Federal Reserve Chairman Alan Greenspan and others have stressed, as long as the dollar correction is not overly abrupt, the American economy can adjust without serious disruption, just as in the 1980s. Why, then, the alarmism? Part of the reason is a set of myths that exaggerate the dangers. Let's explore these.
Myth: The dollar is falling rapidly and is now weak.
Reality: The myth is fed by looking only at recent movements of the Euro and the yen. But Euroland and Japan account for only 30% of America's total trade. The picture is quite different if we include all of America's trading partners, and adjust for price changes. Over the last three decades, the real, trade-weighted dollar has spent most of its time within a 10% range above and below its 1973-2004 average. The major exception came in early 1985 when the dollar soared 30% above the long-term average. The most recent peak, in Jan. 2002, was 15% above the long-term average. After three years of correction, the dollar is now just 3% below the long-term average. That's hardly a free fall.
Myth: China and Japan are the major causes of America's soaring trade deficit.
Reality: China accounted for 25% of America's trade deficit in 2004, a bit less than its share way back in 1997. Japan's share of the deficit is now only 12%, down from 30% in 1997 and 65% in 1991. Even in relation to China, the mounting bilateral deficit mainly reflects America's soaring trade deficit with the whole world.
Myth: Only massive dollar purchases by the Bank of China and Bank of Japan keep the dollar from crashing. What if they stop buying?
Reality: We've already run this experiment. Japan's monumental intervention of late 2003 and early 2004 stopped last April. Yet, the currency markets barely hiccupped.
The vast majority of capital inflows to the U.S. come from private investors, not central banks. Over the 12 months through Dec. 2004 (the latest data available) -- and this includes several months with massive Japanese intervention -- all the central banks in the world combined accounted for only 26% of the net capital inflow to the U.S. (as measured by net purchases of securities). The other three-quarters came from private investors.
In the period from May to Dec. 2004 -- immediately following the end of the BOJ's intervention -- China (public and private sources combined) has accounted for only 7% of net capital flows to the U.S., while Japan has accounted for 23%.
In any case, if Asian central banks did dump the dollar, they'd be shooting themselves in the foot. A lower dollar means a higher Japanese yen, Korean won, and so forth. Higher currencies mean higher prices for their exports, which would hurt sales. The action would hurt their own countries' exports. (Right now China's yuan is pegged to the dollar; for the Bank of China to dump the dollar would require letting the yuan float, presumably upward).
Myth: Anxious private investors are already beginning to abandon dollar assets.
Reality: This myth is fed every time one month's data is labeled a trend. Alarmist headlines appeared when the October figures showed a 30% drop in net foreign purchases of U.S. securities. But in November, inflows bounced back to a level even higher than before the drop. The same thing occurred September 2003 when the monthly inflow dropped by 90%, only to rebound to near-record highs in the following few months.
Net inflows must be measured against the need, i.e. the size of the U.S. current account (trade) deficit. Today, that need is $55 billion per month. As it turns out, in the three months ending in November, net foreign purchases of U.S. securities averaged $63 billion per month -- considerably more than enough.
It's true that this figure is down substantially from the peaks of $75-80 billion reached during the period of massive BOJ intervention. But, the fact is, unless the inflows slow, then the dollar and the trade deficit cannot correct. Moreover, today's net inflows are still higher than in almost any other period prior to mid-2003. (Also, keep in mind that these figures only include securities, such as government bonds and corporate stocks and bonds. They don't include foreign direct investment or bank loans.)
Certainly, foreign investors could demand a higher return in order to keep investing in the U.S. But that, too, is a necessary part of the correction process.
Myth: Half of U.S. Treasury bonds are owned by Japan and China. If they dump them, U.S. interest rates could soar.
Reality: Public and private investors in Japan and China together hold about half of the foreign-owned portion of Treasury bonds. However, foreigners collectively own only 20% of Treasury debt, making the Japan-China share only 10%.
In any case, U.S. interest rates are determined by supply and demand for all market debt (including corporate bonds, consumer debt, etc.) not just government debt. So, how important is the presence of foreigners in the overall U.S. debt market? Almost all foreign investment in U.S. debt is in government debt. But government debt is only 30% of total debt. That means that foreign investors own only about 6% or so of all U.S. market debt (i.e. 20% of 30%). The Japan-China share is half of that.
Consequently, even if capital flows from China and Japan slowed substantially, the U.S. Federal Reserve could offset the impact. Given that the Fed wants to raise interest rates anyway, a gradual slowdown in Japanese and Chinese purchases is hardly a doomsday scenario.
None of the above means that the U.S. trade deficit can keep expanding without limit. A slow adjustment is necessary. And in that process there will undoubtedly be stresses, especially if the size of the U.S. budget deficit is not brought under control. But stresses are a far cry from a recession-causing crash.
Mr. Katz is editor of the Oriental Economist Report and author of "Japanese Phoenix: The Long Road to Economic Revival" (M. E. Sharpe, 2002).
关于美元的误区和事实
显示美元最终可能“硬著陆”的迹象再次充斥人们的耳目。报刊杂志的编读往来和一些投资银行的信息通讯提醒说，大量资金正放弃持有美元和美元资产，这导致美国市场利率升高，并有可能引发新一轮衰退，而这种情况反过来也将损害亚洲和欧洲的出口业。
这些警世真言中有许多是围绕这样一种想当然的说法发挥而来的，那就是：美元之所以至今仍未崩溃，主要原因是亚洲国家央行，特别是中国和日本的央行，一直在购买美元资产以保护他们的出口业。如果他们停止行动，美元将随之应声落地。
这些担忧不禁使人想起上世纪八十年代中期美元升至历史高位时市场上传播的类似的警告。这些说法一半来自现实，一半纯属想当然。
现实情况一目了然。目前，美国的商品和服务贸易逆差额相当于国内生产总值的5.3%。很明显，这个水平不可能无限制地扩大。美元兑某些主要货币的汇率已发生大幅下跌，特别是兑欧元。最近三年时间里，美元兑欧元和兑日圆汇率分别下降了34%和22%。如果美元进一步下降，可能会促使投资者不愿再持有美元资产。
同时，尽管美国财政部部长斯诺(John Snow)有时在口头上也表示支持强势美元，但实际看来他似乎更希望美元进一步走低，只要这种变动步伐平缓。斯诺先生唯一的不满是，中国仍未让人民币加入到配合美元下跌的行动中来。
不过，正如美国联邦储备委员会(Federal Reserve)主席格林斯潘(Chairman Alan)和其他人所强调的那样，只要美元的下跌步伐不至于太突然，美国经济就能进行相应的调整而不会受到大的冲击，就像八十年代那样。既然如此，那么为什么还有人那样大惊小怪呢？这背后的部分原因在于，一系列虚幻的误区夸大了风险。且让我们来逐一解剖：
误区之一：美元正在快速下跌，现在很疲软
实际情况是：产生这种错觉的原因是，人们只看到欧元和日圆汇率近期的变动。但实际上，欧元区和日本的对美贸易仅占美国贸易总量的30%。如果我们考虑到美国的所有贸易伙伴国的情况，并对价格变化作出调整，那么得出的结论就会完全不同。
自1973年以来的30多年里，美元的实际贸易加权汇率大部分时间都在1973-2004年平均水平的上下10%的区间波动。比较明显的例外是在1985年初，当时，美元汇率较上述长期均值高出30%。距离现在最近的一次高峰是2002年1月，美元较均值高15%。在经历3年的下调后，美元目前仅较均值低3%。这实在算不上是自由落体式的直线下降。
误区之二：中国和日本是美国贸易逆差直线飙升的罪魁祸首
实际情况是：2004年，美国贸易逆差中有25%来自中国，略低于1997年时的比例；仅有12%来自日本，远低于1997年时的30%和1991时的65%。虽然美国与中国的贸易逆差在不断上升，但它从根本上还是因为美国与全世界的总体贸易逆差在大幅增加。
误区之三：全靠中国央行和日本央行购买美元才维持著美元不至于崩溃。一旦它们不买怎么办？
实际情况是：已经有过这种“试验”了。2004年4月，日本停止了它在2003年末和2004年初进行的大规模干预行为，但外汇市场并未因此有什么触动。
流入美国的资本大部分还是来自民间投资者而不是央行。在截至2004年12月的一年时间里（其中包括日本实施大规模干预的几个月），世界各国央行购买的美元资产仅占美国资本净流入总额（以证券净买入额计算）的26%。其余四分之三均来自民间。
其中，日本央行停止干预后，即2004年5月至12月期间，来自中国官方和民间的资本流入仅占美国同期资本净流入总额的7%，而来自日本的仍高达23%。
无论如何，如果亚洲国家央行选择抛售美元，那就会搬起石头砸自己的脚。抛售将导致美元疲软，也就意味著日圆、韩圆等亚洲国家的货币相对走强，其出口商品价格也将相对升高，这将损害它们在国际市场的竞争力。（中国是个例外，目前人民币汇率与美元挂钩。）
误区之四：焦虑的民间投资者已开始放弃持有美元资产
实际情况是：如果单独某个月的数据被视为一种趋势的代表，就会得出这样的结论。当去年10月的数字显示外资对美国证券的净买入量下降30%的时候，媒体上就有人开始大惊小怪了。但11月份的数字很快就反弹回来，甚至比10月份之前的数字还高。类似的情况2003年也发生过。当年9月份的数字锐减90%，但在接下来的几个月里却反弹到接近历史纪录的高位。
考察资金净流入水平应该参考美国需要的资本流入额度，这里也就是美国的经常项目赤字。目前，美国的月度经常项目赤字为550亿美元，而在截至去年11月的3个月中，外资对美国证券的月均净购买额为630亿美元，足以满足弥补赤字的需求。
的确，上述净买入量数字比日本央行大肆干预时的750-800亿美元是显著降低了。但问题是，除非资本流入减少，否则美元汇率和美国的贸易赤字不会有所改变。另外，现在的净流入规模超过了2003年年中之前任一时期。（顺便提醒一下：这里的净买入额仅包括政府债券、企业股票和债券，不含外国在美国的直接投资或银行贷款。）
当然，为持续投资美国资产，外国投资者肯定希望获得较高的回报率。但这一点同样也是回调过程必不可少的一环。
误区之五：美国国债有半数被日本和中国所持。如果它们抛售这些国债，美国利率或许会飙升
实际情况是：中、日两国所持美国国债只是占外国人所持美国国债的半数。而外国人所持美国国债只占美国国债总量的20%，也就是说，中、日两国所持美国国债只占美国国债总量的10%。
美国的利率水平不论何时都是由所有市场化债券的供求关系决定的，包括企业债券、消费信贷等等，而不仅仅取决于国债市场。所以，外国人持有的那部分债券在整个美国债券市场的重要性能有多大呢？外资在美国债市的投资几乎全部是美国国债。但国债在美国总体债券市场的比例只有30%。也就是说，外资所持美国债券仅占美国债市总规模的6%。中、日两国合计的份额是6%的一半。
因此，即使来自中、日两国的资本流入大幅放缓，联邦储备委员会将有能力抵消这种变化对美国利率的影响。考虑到联储目前正处在加息周期，因此，即使中、日对美资金流入缓慢降低，美国也决不会面临世界末日。
上述这些因素意味著美国贸易逆差不会无限制地扩大。缓慢的调整是必要的。在调整过程中势必会产生某些压力，特别是如果美国的预算赤字难以得到有效控制的话。但是，这种压力距离美元崩溃并进而导致美国陷入经济大衰退还远得很呢。
