Currency Wars Often Lead to Trade Wars ... Which In Turn Can Devolve Into Hot Wars

George Washington's picture

d Currency Wars Often Lead to Trade Wars ... Which In Turn Can Devolve Into Hot Wars

Currency War → Trade War → Hot War?

According to numerous high-level insiders, the global currency war is accelerating:


And Japan's escalation of the currency war has caused leaders in the Eurozone (more), Norway, Sweden, South Korea, Taiwan, Columbia, Mexico, Peru, Chile, Venezuela and many other regions to devalue or consider further devaluing their currencies. China may be joining as well.  (And James Rickard and Reggie Middleton think that Germany’s demand for its gold is part of the currency war.)

We've been in a global currency war for years.

As the Wall Street Journal asked in 2010:

Beggar-thy-neighbor currency devaluations proved ruinous for the global economy in the 1930s. Is the world setting off down the same slippery slope again?

Yes, we are.

Despite drivel from ignorant sources, currency wars don't help the average person.

Quantitative easing - the main lever to depreciate currency - hurts the little guy and only helps the super-elite.

Former Secretary of Labor Robert Reich points out that a weak dollar makes everyone poorer ... and any new jobs created by a a policy of devaluation are low-wage jobs.

Economist Mark Thoma noted in 2010:

While the positive effects a currency war produced in the 1930s [many disagree] are unlikely to reappear, there is a chance of large negative effects such as a simultaneous trade war or the breakdown of the international monetary system, so let's hope a currency war can be avoided.

Philadelphia Federal Reserve Bank president Charles Plosser notes that currency wars would only hurt world trade and the economies that were involved.

The IMF noted in 2010 that currency wars "would represent a very serious risk to the global recovery".

Even Paul Krugman is not that keen on currency wars.

Trade Wars

It is widely accepted that currency wars can lead to trade wars. As Time notes:

A competitive devaluation game can turn into a trade war, whereby losing countries start slapping tariffs on imports and exports to punish countries deemed to be “manipulating” their currencies. Trade wars, of course, make stuff more expensive for everyone, and that’s just about the last thing global consumers – increasingly squeezed by rising unemployment and inflation – need.

Nouriel Roubini agrees.

Indeed, there are signs that currency war induced trade wars are already starting.  And see this.

Hot Wars

Brazilian president-elect Rousseff said in 2010:

The last time there was a series of competitive devaluations ... it ended in world war two.

Billionaire investor Jim Rogers says:

Trade wars always lead to wars.

Top trend forecaster Gerald Celente has said for years that currency wars turn into trade wars ... which in turn lead to hot wars.

Jim Rickards agrees:

Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon's first-ever "financial" war games. While expressing confidence in America's ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into "asymmetric warfare," if currency wars lead to rising inflation and global economic uncertainty.

Indeed, trade wars have been leading to hot wars for thousands of years.  For example, the war between Rome and Carthage - leading to elephants in the mountains surrounding Rome - essentially started as a trade war.

Indeed, with top economic forecasters predicting war, the American policy of using the military to contain China's growing economic influence, and the U.S. considering economic rivalry to be a basis for war, the global currency and trade wars are creating a tinderbox.

8419051627 bb9814e780 b Currency Wars Often Lead to Trade Wars ... Which In Turn Can Devolve Into Hot WarsImage by William Banzai

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lakecity55's picture

Late News:

Drones now being used to hunt the Dorner guy in CA.

Gee, maybe that was the reason for him to "go beserk."

"See, we must have Drones, Amerika! Drones! Our cops are too stupid to catch him, and they only shoot innocent civilians. I mean, they are OK for beating up old ladies and rock collectors, but We need Drones!!"

Hmm, I bet they are armed.


cherry picker's picture

When children cry because their parents are dead or wounded, there is no food or shelter, forget about I-phones and Internet, then the horror becomes reality.

Is it worth it?


War is more than physical, it is mental anguish and spiritual chaos.


We best find an alternative solution.

nicoacademia's picture

all you pussies sitting behind a computer screaming war.


wait till you are in the real war.



slackrabbit's picture

We need to print a 100 Gazillion, that'll fix it! - true that is not a real number, but this isn't a real economy!

WAR - when shit really does 'get real'!


Chupacabra-322's picture

"When all else fails, they take you to war." -Gerald Celente

jack stephan's picture

Geeeeee seehvooonnhhh!!!!

Sooooo pumped.......

The Heart's picture

Charity begins at home.

Reckon so does the war.

At the Front Lines, the Heroes Dance.:


moneybots's picture

"Total load of horseshit - S&P is at a 5-year high and people are making money in the stock market again. Why do you losers hate that so much?"


As Kyl Bass noted, the best performing stock market was Zimbabwe, where as he noted, your entire portfolio "would buy three eggs".


I read the other day that the S&P was up 14% over the last 12 years.  How much has inflation been up over the last 12 years?  The elite insiders are making money, but what about most everyone else?

moneybots's picture

"Even Paul Krugman is not that keen on currency wars."

I Didn't read the link, but isn't Krugman always wanting more stimulus?  What is it that Krugman thinks happens when the government borrows trillions of dollars into existance from the FED?

Mad Muppet's picture

This is all going to end very, very badly. Stockpile and stack.

trendybull459's picture

we have higest NIS and highest real estate Bubble which promised never explode,now I made discovery in psiholody,it finds that person who once took morgage will vote only for the party which gave him this morgage as he will be affraid the other party will change the morgage conditions,prices for real estate at all times high,but exactly this year country intervined with 40bln NIS debit by professional orchestra team from Central banking planning,this info given in hebrew or in russian,since most thinking amrika came from russian immigrants we giving you up to read by itself or grandmather of grandfather,maximum ask closest russian mafia friend,cause time to be united :))))))):

trendybull459's picture

americans,please stop your puppets of central banking poisoning to do same job in other countries,in russian:

sgt_doom's picture

It may be currency wars/trade wars, but when one gets down to the nitty gritty, it's still about who controls the money creation, that is the end-all and be-all behind all wars.

q99x2's picture

Round up the banksters. Any country has the means to stop war by getting rid of the world's enemies. Throw them into prisons.

Bandit und Buster's picture

Round up the banksters. Any country has the means to stop war by getting rid of the world's enemies. Throw them into prisons.

Prison, like Hell! Then the regime changes and they're back in charge?  Don't think so...

How bout we throw them off a high bridge!


CDNX fan's picture

Total load of horseshit - S&P is at a 5-year high and people are making money in the stock market again. Why do you losers hate that so much? You all going to be rah-rah-rah-ing if we get a 15% correction? Great. It will tale us back to 85% above the 2008-2009 lows. Gold? Silver? How many of you mutts are making any dough there these days? Had a margin call trading the GC/1 or the SI/1 lately? You bet your ass you have. How about the E/S from the long side? Not so much? Any way you cut it, there is NOTHING worse than a deflationary collapse a.k.a. 1931-1937. You should be careful what you wish for...

moneybots's picture

"Any way you cut it, there is NOTHING worse than a deflationary collapse a.k.a. 1931-1937. You should be careful what you wish for..."


Roosevelt devalued the money in 1933.  Just what deflation from 1931 to 1937 are you talking about?

A deflationary collapse comes from an inflationary excess.  It is funny how people put the cart before the horse.  There is nothing worse than inflationary excess.  Inflationary excess crashed the Nasdaq.  Inflationary excess crashed the housing market.

Everyone talks about the Weimar hyperinflation.  The money became virtually worthless, after which the value of everything crashed, as the money had to be replaced with Marks that had value.   Hyper-deflation.


There is nothing worse than government intervention, to artificially prop up something that needs a natrual collapse to restore balance.

besnook's picture

take a look at the 15 year chart of the spx and maybe compare it to the gold chart and get back to me.  you like even money for 5 years? really?

translator zero's picture

Put the 15 year chart of SPX in real dollars to see how great it is.

In fact, use a legit measure of inflation and it's down by 50%.

besnook's picture

that is too complicated for him. keep it simple.

besnook's picture

aren't we already at war? it is as if war preceded the currency and trade wars. the iraq war was about petrodollars. libya was about petrodollars. iran is about petrodollars. the same with venezuela. the resource wars in africa are about commodity dollars as opposed to commodity yuan. the pacific pivot by the usa is meant to divide the east asian countries and china. india is the prize. they are playing both sides of the coin, using the usa and russia as they see fit while the usa tries to encourage the china/india conflict.

the usa has nothing but a bloated military to protect the dollar. they are using it but creating enemies in the process. europe is on board because the euro has become dollar dependent. in a shooting war betweent the east and west the west loses but the bankers win.

TrulyStupid's picture

Talk about putting the cart before the horse... we've been at war constantly for the past century. The post WWII US economic boom was brought on by the full production and employment of the war years and reinvestment in productive civilian activities. The disatrous war in Vietnam against an ideology (the myth of international communism and the domino theory) turned out to be a false flag operation in support of the war profiteers.

The currency inflation needed to pay for that war took us off the gold standard into the world of centrally managed monetary inflation and the rise of the central banks culminating in the crash of the early 80's. Reagan then cranked up military intervention and deficit budgets  a stimulus to the economy culminating in the glorious victory over the erstwhile unknown communist threat in Grenada. There was a fleeting small era of fiscal sanity in the 90's under Bush I and Clinton where a balanced budget was targeted. That concept didn't sit well with the sheeple or the war profiteers and a new unprecedented commitment to military intervention was launched under the dullard W.

And here we are after the current adminstration simply extended all the malinvestment it had previously decried. Debt is accumaulating at an unprecedented rate in spite of the zero real interest rate policies. The MI/Bankster complex is busy scouring the earth looking for new wars to profit from. The rubicon to a hyperinflationary collapse was crossed back in 2003 when spending was cranked up, tax revenues were deliberatly lowered, interest rates became non existent and the commitment to wealth destructive malinvestment became complete. All that's left now is the inevitable collapse being pushed out as long as possible by the current "not on my watch" crowd.

MeBizarro's picture

We also don't take the old approach anymore to war where the 'victor enjoys the spoils' direct model either and haven't since WW2 which was the last unconditional large-scale conflict.  Almost have to nowadays because of nukes and the shift on how the world responds to war & conflict especially since the end of the Cold War.  

mightycluck's picture

Mark Thoma is a Krugman acolyte who want gov't to spend MORE, borrow MORE, etc. He is a Socialist POS in Oregon.

Currency wars? Socialist nations Argentina and Venezuela LOVE devaluation, as does the USA with QE.

Here is this guy's take:

MeBizarro's picture

I am always amazed to read on this blog how many foolish people still think wars have a positive outcome for an economy.  Maybe initially in the short-or-intermediate term.   Losers of war obviously don't enjoy a positive outcome and even 'winners' often are losers too if their territory was invaded or experienced destruction from long-range weapons. 

Wars lead to massive borrowing, inevitable inflation, misallocation of resources for investment, large-scale resource depletion, and a possible huge detriment to human capital. 

AGuy's picture

"I am always amazed to read on this blog how many foolish people still think wars have a positive outcome for an economy. "

Its about keeping the incumbent in power:

1. Politicians make promises they can't keep in order to win elections or seize power

2. When the promises can't be met and the politicians are endanger of getting the boot, they use false premises to distract the public as well as use crisis to sieze additional authority.

    A. Single out a minority group that has wealth or assets that can be seized.

    B. Blame a minority group for the failure of policies and agendas. aka terriorism, conpiracies, etc

    C. When there are no more assets to punder inside the nation borders, seek assets from other nations. Use terriorism, conpiracies, etc to convince the public to support a war

    D. Send millions of unemployeed/idle individuals that may create political movements that could unseat the incombents, to war, or to factories to build arms for the war.



rustymason's picture

Because the minority group that has stolen all the assets is holy and always innocent, right? Pleaz to give break, comrade.

besnook's picture

war is about massive capacity destruction and a reorder of finances, therefore, economic winners and losers. if you are a central banker on the winners' side it is a great and good thing. if you are on the losers' side your bank gets to restructure, a great and good thing.

All Out Of Bubblegum's picture

If central bankers look in their rearview mirror, they'll see that Bitcoin and cryptocurrencies in general are gaining on them. Sheep and other herds animals are ignoring Bitcoin, per their conditioning.

nah's picture

let them eat muscle

Oldrepublic's picture

Randolph Bourne,

1886 –1918

War is the health of the state

Bandit und Buster's picture

Randolph Bourne,

1886 –1918

War is the health of the state

RIGHT!  Looks like he didn't live long enough to get smart!

What was he a Banker? 

War is for the wealth of the banksters!

Fix It Again Timmy's picture

Ok, the US starts a war that China doesn't like - guess what they'll be selling.  Fight China?  Yeah, right.  Every thing from toothbrushes to thousand pound bombs has to be shipped 10,000 miles and how many troops do we have and what kind of luck have they had against small third world countries like Afghanistan and Iraq?  The only wars we'll be seeing is these piss-ant excursions until we run out of cash or The Big Lebowski if someone makes grave miscalculations - there won't be anything in between that spectrum, this ain't your grandfathers' world....

The Heart's picture

"Fight China?  Yeah, right."

(The Heart sighs) premonition the voice of universal truth spoken through the words of man?




AGuy's picture

"the only wars we'll be seeing is these piss-ant excursions until we run out of cash or The Big Lebowski if someone makes grave miscalculations - there won't be anything in between that spectrum, this ain't your grandfathers' world...."

Economic crisis will lead to civil war and toppling gov'ts as the unemployeed force change. In most cases the replacement gov't end up being facists/communist or some other form or socialists gov'ts. The leaders of these gov't will seek out war. Another is when the remaining industrial powers start siezing over seize assets to security diwindling strategic resources need to support thier economies (Energy, Food, Clean Water, etc). When there are no more lands to occupy and resource demands are not met, nations go to war. See Japan and China march toward war of those crappy islands, because there is offshore N.Gas near them. US and China appear to be on a African resource grab. Notice that O'bama is shifting military resources into Northern Africa to aquire additional energy and phosphate resources.

Either one of two things will happen. There will be another World War (with Nukes), or the big industrial powers (US and China, perhaps one one) will collapse before the war has a chance to occur.

The Heart's picture

"Ok, the US starts a war that China doesn't like..."

Some long time observations.

China, under the guidance of the sock puppet Maurice Strong has been building china up to be the next babalonian globalist bankster money engine, just like America was built up before the first two world wars. He has been there for a good ten years and more actually planning the take over and destruction of America. He still is hiding from justice that hounds him. China, with the help of the marxist clintons, the communists in the US govt, and now with the supportive aid of the marxist soterobama puppet masters, are all still slowly moving towards the slow creep plans of the globalists in china to overrun and take americas bread basket for their own peoples. Heck, if america can do it for twelve years plus, why not china? When once upon a time America were the good guys in a world war to rid the world of the evil fascist nazi empire created by the banksters, now america will be the evil fascist nazi empire, and china gets to be the good guys to save the world from the evil of americans fighting themselves while trying to take over the world as guided by the puppets in isreal who are just minions and lackeys of the rothchilds banksters plans for world domination and population reduction agendas. All this is pretty simple to see really.

(Hal turner was outed as an fbi informant. Why did he push this story so hard?

After the purposely planned and executed crash, it will be easy for the chinese to come in either under the rothschild sock-puppet strong's UN agenda, or to simply take over the country in a state of war with itself and under chaotic skies. Imagine, getting a country to disarm it's own people and then to go to war with itself just before you take advantage of this planed chaos to take it over and conquer it. They have race specific bio-weapons, and a host of other means to subdue and kill off the well divided up Americans. The whole dang plan is so freaking obvious ugly, and point blank in the face of any third grader that sees this injustice and corruption creeping upon the lands of the home of the formerly brave. One just wants to think this is some sort of off the wall twilight zone episode and that sooner we will be shaken awake to find out it was all a dream. Alas, as the ship slowly sinks and the rats are fast jumping ship, one has to wonder, what wickedness comes and how soon will there be a triggering event to tip this poor warmongering suckered country into the oblivion of the history book that will be written in chinese later.




lakecity55's picture

Look up the Vision that George Washington is reputed to have had from and Angelic Being.

It fits in with US being nuked, and revolution at the same time, but a small part of US wins the war.

However, many, many patriots are killed.


Hoax, or True?

diogeneslaertius's picture

this should be in the next Trends Journal

this single article does celente and keiser for instance a tremendous service of going "SEE!?"

as per the currency wars progression analysis etc

diogeneslaertius's picture

at what point do we acknowledge that functionally, from a certain standpoint, the nation states themselves no longer exist and they are merely chess pieces on some grand chessboard being moved about - occasionally pitted against one another for the sake of crystallizing the control schema etc.

it is as if one man were playing chess against himself and in control of the entire board

shovelhead's picture

Too many kids with no jobs? War is the answer.

Too many useless eaters in prison? War is the answer.

Sluggish economy? Yup, you got it.

Good jobs at good wages...We print 'em up.

If nature doesn't purge the system with natural disasters fast enough, we can always help it along with some good old fashioned wholesale slaughter.

A little creative destruction, much like a forest fire, clears out the deadwood and allows healthy regeneration with new opportunities for growth for the species who are most able to adapt to the new conditions.

You really have to look at it through the eyes of TPTB.

War is a problem solver positive, not a negative.

Sign up today and do your part for a better world.

AnAnonymous's picture

Too many kids with no jobs? War is the answer.

Too many useless eaters in prison? War is the answer.

The quintessential 'american' trait .

Solving an over consumption problem by consuming even more.

No other path than even more consumption.

Jobless kids consume less than if they were in jobs? No problem, push them through wars when they could increase their consumption.

Inmates are on slow consumption, standardized consumption? Very simple, push them through wars when they could increase their consumption.

So funny.

The 'american' middle classers can not admit they are the issue due to their overconsumption addiction.

If wars were to be used, it is not inmates that should be sent to the field, but all their custodians, and the remaining peripherical middle class that living off the jailing business.

This would for sure help the overconsumption issue much better than sending inmates.

But it is also possible that the King class (aka WeThePeople, aka the middle class) can govern itself, can not act itself and that the only way to decrease the consumption of all the peripherical middle class living off the jailing business is by killing the inmates. No more inmates, no more 'american' middle classers living off the jailing system.

Something to be followed.

sgt_doom's picture

Bullcrap to let the Wall Streeters off the hook --- nothing more need be said.

thisandthat's picture

Are you really that stupid?