Posted Nov 5, 2019 by Martin Armstrong
QUESTION: Dear Mr. Armstrong.
Does Socrates have an explanation of what is happening to the Norwegian Kroner? All the financial newspapers and banks here in Norway are scratching their heads and don’t have an explanation of why it’s devaluating against the Euro and Dollar. The central bank of Norway has an interest rate of 1.50%, while Euro has an interest rate of -0.5%.
ANSWER: Norway’s currency has been declining recently over concerns with regard to the US-China trade dispute given the fact that it is highly exposed to the US-China trade situation. Additionally, the sharp decline in crude oil prices has also impacted the currency given the oil and gas industry accounts for more than 1/20th of Norway’s gross domestic product and about 2/3rds of its exports. Therefore, Norway’s economy has been highly correlated with oil prices.
Nevertheless, in Korona, the price of oil is rising given the decline in the currency (click on the image). The analysis never looks at everything from an international perspective. Your currency is retesting the 2000 high in the dollar.