The financial markets of 2015 are in constant flux with online trading, a global market and the addition of social media’s rumor mill. The market moves at digital speed and making intelligent investments cannot be driven by rumor or uninformed sources, no matter how popular they may be. The role of properly trained economists cannot be overstated in today’s investment market.
The ongoing issues with Greece and several other European nations has driven the conversation about currency. The debt issues and the viability of the Euro and the European Union itself has caused perpetual rethinking of investors in currency and European markets. Add to this the debt issue as the United States continued Quantitative Easing to speed recovery from the mortgage-based securities recession, and even more questions about the place of the dollar as the world’s reserve currency arose.
The rise of China’s economy and its stock market were new features to the world economy and as that market gained strength open discussions to have the Chinese currency replace the dollar as the reserve currency took hold. Recently a rising series of bubbles in many areas of the Chinese economy have shaken this replacement concept.
Christian Broda is a successful academic who has merged his traditional research and teaching skills into hedge fund management. Dr. Broda received his BA from the Universidad de San Andres in Argentina and his MA and PhD in Economics from MIT. He has been a tenured professor in Economics at the University of Chicago since 2008. He holds that the dollar still represents the most stable economic base from which to invest.He authored a white paper with Ethan Harris for Barclays Capital/Global Economics Weekly in 2009: “Inflated Fears” in which they discounted the notions that the dollar would eventually be so inflated that it would be irrelevant in world finance. They argued that market forces would keep inflation low and thus retain the dollar’s stability in world markets.
As a hedge fund manager with Duquesne Capital Management, Dr.Broda maintains that investors should remain in dollar denoted investments.The recent stock plunges in China and the continued instability in the Middle East have demonstrated his well researched points. The value of traditional economics cannot be underestimated in today’s confusing environment of online information and misinformation.