Yeterday, when the BIS released its annual report which was, as usual full of fire and brimstone aimed at the world's central bankers, i.e., the Board of Directors of the, well, BIS...
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... which resolutely keeps ignoring the reports of its own economists and continues kicking the can and perpetuating the status quo by whatever debt means necessary, the BIS had an interesting side bar in Box V.A "Mapping the dollar and euro zones" which in simple color coding, was meant to show just that with dollar zones shown in Green while the "euro zone" was in blue.
As the BIS noted, "this box uses simple regression methods to place currencies in three zones of influence corresponding to the main international currencies based on the currencies’ degree of co-movement. The three reference currencies are the dollar, the euro (before 1999, the Deutsche mark) and the yen, consistent with their status as the three most transacted currencies in the world in the BIS Triennial Central Bank Survey. Thus defined, the dollar zone accounts for nearly 60% of world GDP, far more than the US share in world GDP, which is between 20 and 25%."
All good empirical stuff. There was, however, one rather glaring oversight: try to spot it in the BIS map below which is a snapshot of the original annual report release. Remember: Dollar zone in Green... Euro zone in blue:
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Yes indeed: Greece was "erroneously" omitted from the blues.
Oops.
This is what the WSJ [11], which first caught the rather glaring oversight, commented:
As the graphic demonstrates, the U.S. dollar zone—a rough equivalent for the reach of Federal Reserve policy—accounts for about 60% of world economic output and includes Russia, China, India and much of Latin America. The ECB’s reach is much smaller. Indeed, so small that it didn’t include one of the currency area’s members: Greece.
It was, of course, an embarrassing error rather than a product of the BIS’s insight into the fate of the eurozone’s most troubled member.
Indeed, the final iteration of the BIS pdf had the Greek map promptly filled out with the royal blue color, but one wonders: was this merely a Photoshop "fat filler" error, or did the BIS "accidentally" preview the result of this weekend's Greek referendum in the biggest Freudian coloring slip by the (not so) secretive organization that runs the world [12]?
Source: BIS (revised) [13] [13]
