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Egypt: The Pound Plunges

The Egyptian pound is plummeting, again, losing 6.1% of its value against the greenback over the past week.  As shown in the accompanying chart, the black market premium has soared to 25.2%.

The plunging pound has dramatically pushed up Egypt’s implied annual inflation rate.  It now stands at 28.9%.  The Egyptian pound might just be General Sisi’s Achilles’ heel.

Past Blogs

China Meets the Zombies

March 04, 2016

Beijing can be big and bold when it meets reality. Remember when Zhu Rongji, China’s former economic tsar, gave 30 million workers pink slips, privatized hundreds of state-owned enterprises (SOEs) and swept many others into the dust bin?

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Egypt’s Dire Dollar Shortage

March 02, 2016

Ever since General Sisi ousted the Muslim Brotherhood, the Egyptian economy has remained in shambles. Businessmen are fed up. They are ignoring government gag orders, and are making their voices heard. And why not? They are losing sales, missing deadlines, and scrapping expansion plans because of limited access to U.S. dollars.

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Time for a New Calendar, One with a Leap Week

February 29, 2016

How about an extra week every six years, starting in 2020? That’s what you would enjoy if we adopted the Hanke-Henry Permanent Calendar (HHPC). Faced with the Gregorian calendar’s plethora of problems, my colleague Dick Henry, a professor of astrophysics at The Johns Hopkins University, and I devised the HHPC.

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Nigeria’s Little Problem: Lying Statistics

February 26, 2016

Nigeria’s currency (the naira) has been officially pegged in a range of 197-199 NGN/USD for nearly a year. But, that’s a phony government rate. As shown in the accompanying chart, the black market (read: free market) rate has exploded since October, and currently stands at 350 NGN/USD.

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Capital Controls: Hayek versus the IMF

February 16, 2016

With each financial crisis, politicians of all stripes go into overdrive. They busy themselves by ducking any examination of the policy blunders that created the crisis in the first place. A favorite tactic is to fan anti-market flames. Markets get a bum wrap, and a cascade of new laws and regulations ensue.

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