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Paper As A Luxury Good?

It was surprisingly difficult to find a decent, high-quality notebook here in the heart of Taipei. I went to almost a dozen stores before finding one.

I was thinking, "What is this, is paper a luxury good here in Taiwan?"

And then it occurs to me -- maybe paper will be a luxury good in a few years. Probably tablet computers and other computing surfaces will be good enough at that point so that the loss isn't strongly felt... but it's not hard to envision a world where a standard paper notebook costs between $5 and $7, and you have to go to a specialty store to get it.

Effects of Fed Tapering on Emerging Markets

On Saud

EM bonds are being sold off with India and Indonesia leading the way, joined by Thailand close behind down 9 trading days in a row (20% decline since may, worst since 1998). Equity markets are being sold off with the Indian banking sector down 2.5% Monday, (35% from the highs), while the worsening situation is in the Philippines exchange. The IDR has collapsed by 3.9% overnight (biggest drop in 5 years), while the INR fell from its best day in 11 months to end the day 1.5% lower. Elsewhere the TRY has hit fresh lows against the EUR. With FED tapering on the horizon, moderate bids of the US Treasuries continues with more demand expected in the coming weeks, as capital floods out of emerging nations and into the security of US paper.

Effects of tapering by the FED have begun to shape, as emerging market currencies begin to decline sharply. The worst fear is that domestic borrowers in these countries may not be able to pay back their dollar-denominated loans. In part, realizing a worst case scenario wherein, defaults across the domestic banking sector resulting in banking losses, or even failures across emerging nations. The IMF has warned against a rush to exit from ultra-easy policies that have been put into place to spur growth. Speech by Christine Lagarde, IMF Managing Director, "Policies and policy coordination are not yet where they need to be. Failing to act at the global level, with each country playing its part, could put the global recovery at risk… I do not suggest a rush to the exit. UMP (unconventional monetary policy) is still needed in all places it is being used, albeit longer for some than for others. In Europe, for example, there is a good deal more mileage to be gained from UMP. In Japan too, exit is very likely some way off."

The initial statement of creating a consortium of central bankers exists in smaller central-European and east-Asian nations, but not between major and emerging nations. The fears of FED tapering have rattled emerging nations in the past week, currencies are depreciating against the USD, as per the below matrix:

Turkish CB has been attempting to control TRY weakness via regular auctions

-TRY auctions are usually around $50mio, latest policy meeting changed to $100mio

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