Countries that engineered a reversal primarily by revaluing their currency fared differently from those that relied on fiscal or monetary stimulus.
The price of oil recently touched an 18-month high of $87 a barrel.Tiger, tiger, burning brightSingapore's central bank moved forcefully to tighten monetary policy by revaluing the Singapore dollar and allowing a "modest and gradual appreciation" of the currency.
Ireland satisfies them to a somewhat smaller extent and has had some success revaluing.
Merrill Lynch's private-equity business brought in $794m, likewise almost certainly more than half of it profits; Goldman Sachs' revenues were $407m and Morgan Stanley's $171m.Not all of these gains have actually been realised J.P. Morgan, in particular, has been busily revaluing investments it continues to hold in its portfolio.
America's exports to China (its third-largest export market) rose by 13% in the year to October, at the same time as its exports to Canada and Mexico (the two countries above China) fell by 14%.Some forecasters, such as the IMF, expect China's trade surplus to start widening again this year unless the government makes bold policy changes, such as revaluing the yuan.
The IMF, say, might pay for the cancellation of debts by revaluing or selling its gold reserves this could conveniently avoid counting the cancelled debt as public spending.A tsunami lessonAnother off-balance-sheet manoeuvre is the International Financing Facility (IFF) championed by Gordon Brown, Britain's chancellor of the exchequer.
But revaluing the assets created as a result of those contracts (mostly refineries), at the prices they might fetch in current market conditions, it reckons they may be worth 89 billion reais less than their book value.The lower figure probably understates the write-down that will be needed, because the problem with dubious contracts may extend beyond Mr Costa's former fief.
The trickiest reform of all will be unifying the two currencies, by devaluing the CUC and revaluing the peso.
Opponents think that revaluing seldom-traded assets during market meltdowns makes banking crises more likely and more severe.
So a 10% revaluation would raise its price in dollars by only 1.5%.A lot of hot airIn addition to claims that "China is stealing our jobs", another popular argument for revaluing the yuan is that the Chinese economy is overheating, because a fixed exchange rate forces the country's authorities to run an overly lax monetary policy.
So India is unlikely to allow the rupee to climb much, especially while China resists revaluing the yuan.The idea of "unsterilised" intervention, which would lead to an increase in the rupee money supply, was also given short shrift by a Reserve Bank working committee in December, because of its "undesirable expansionary effects".
