Who Is Winning The Race To Debase?

Tyler Durden's picture

For nearly 30 years, two of the world's largest economic nations (China and the US) have continually debauched debased the purchasing power of their currency. For the last 12 years, the rest of the world joined in. So who is winning the race to debase now? It appears globalization was really all about currency debasement and exporting inflation (i.e. loss of FX value) with debt being the inflation buffer (i.e. borrow to afford or vendor-financing - see AMZN). The problem now is the entire world is saturated with debt and so there is no-one left to export inflation to anymore. We do indeed live in interesting times.



Source: Goldman Sachs


and as a bonus chart - the following chart shows how massivley active China has been to 'manage' its currency. The green line is the USDCNY exchange rate and the red and blue lines indicate the direction of exchange rate pressure driven by the market and the CCP/PBoC's wishes. What is extremely evident is that from the end of LTRO to the start of QEternity (note - they stopped 2 days before the FOMC meeting) - China's government was a massive seller of USD to maintain their CNY stability... (while market expects CNY depreciation)



(h/t INETeconomics)

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DaveyJones's picture

pretty damn funny. They forgot sucking up to the very two criminal middlemen (drug and insurance) who have made the costs explode.

I'd write a sentence about both guys military plans but the humor would be too sick (and too expensive) 

check this out on the government treatment of PTSD. It took me a second to realize that by blanket denying the diagnosis, they are shifting all the costs (crime, mental health, joblessness) to the states.



Daily Bail's picture

I included the projected military spending numbers for both Romney and Obama here:

Debate Highlight: 'Trillion Dollar Deficits Are Immoral'
WillyGroper's picture

On numerous levels, that link really set my hair on fire.

BattlegroundEurope2011's picture

"Burnt scalp" is not covered under Obama care.  Suckers!

Al Gorerhythm's picture

Only an utter retard, suckling at the teat of government and still convinced that government can save him, would have the gall to junk you and ignore the obvious truth in this. This is the most powerful way to defeat them; subject them to ridicule and satire until everyone else gets it and is comfortable expressing it. Even retards.

slaughterer's picture

Ben Bernanke listens to this every night before he goes to bed:


Daily Bail's picture

Good clip.  Saw the Pixies in London when I was 20 and studying abroad, and then met them in a pool hall in Athens, GA 2 years later when I was playing the greatest pool of my life high on bath salts and napalm.

The Debaser

slaughterer's picture

What year were you playing pool with the Pixes may I ask?

Motorhead's picture

Charts, bitchez!

Urban Redneck's picture

To identify who is really "winning" the race, you really need a multivariable interpolation that examines both the price of the currency (in gold), and the size of the money supply, over time.

blindman's picture

trades people, workers, the middle class,
the young and starting out and the retired,
and others.

Beam Me Up Scotty's picture

They'll try and export their inflation to holders of PM's by making them illegal to own again.

IndicaTive's picture

Did I miss the Friday humor? Oh wait....the unemployment number. Scratch that.

The big unzip's picture

Put $10 on the U.S. to place!

ShrNfr's picture

By the time the race is over, you will win $1,000,000,000 Benny Bux and be able to buy a nickle Hershey bar with that.

LMAOLORI's picture



Diesel just hit $6 a gallon in CA if this spreads or doesn't head back down the Nation will be in serious trouble since we move the majority of food, other goods by truck hope you all have some cash/supplies on hand. Our economy could soon come to a screeching halt.

Zap Powerz's picture

Would you just relax?  Unemployment is (snicker) going (snicker) down (LOL).  Didnt you see the headline?!

falak pema's picture

Not that the FED is NOT a massive actor to debase the greenback via QEn and Op twist...its the basis of four years of FED action along with crony capitalist TBTF debt forgiveness.

QEn serves both the debasement pump as it serves the WS asset bubble, hoping that it can control hyper inflation trend. 

Ham-bone's picture

Charts that go from upper left to lower right usually not good...but looks like a  Fuck Yeah, USA is in order (not sure if we got the gold or silver medal but definitely made the podium)???

Occams Aftershave's picture

Someone please tell Goldman there is this thing called "color" which makes chart lines easier to see.  Thank you.  That is all.

DaveyJones's picture

1st debase, second debase, third debase

pretty soon, we'll all go home

Yen Cross's picture

 Excellent post Tyler!

You hit the nail squarely on the head!

Have a good W/E  and thank you very much for your outstanding market news, this and every week!


akak's picture

Wait, I thought the REAL problem was 'deflation', according to Bernanke and every other pro-status-quo mouthpiece.

So where are all the falling prices and cost of living, and where is my appreciating fiat currency?

LMAOLORI's picture




I thought this was interesting 

Fed is preparing the way for US austerity reckons SocGen


silverserfer's picture

Uh at the DOLLAR store hello!

francis_sawyer's picture

What the planet needs now are some extraterrestrial jews to show up & show us the way forward to higher dimensions of material THEFT & fiat currency DEBASEMENT...

It's all that's left... (I'm pretty sure Krugman, Bernanke, Soros, Kissinger, Wolfowitz, Brezninski, Netanyahu, Rothschilds, Blankfein, & Jamie Dimon are all on board with this)...

Yen Cross's picture

The 'GREYS', invaded back in the 40's, and were "subsequently" locked away in [ Area 51].

francis_sawyer's picture

Maybe Snake Plissken helped some to escape...

Yen Cross's picture

lol, good thing I'm using my old laptop!  "Big Trouble In Little China"

BidnessMan's picture

Maybe it already happened?  The real "Men in Black" ?

e-man's picture

Zimbabwe won this race by a mile...

Ham-bone's picture

They were DQ'd due to false start...gotta wait for the gun!!!

e-man's picture

Oops, I missed it.  Zimbabwe's line on the diagram is superimposed on the Y axis!

Yen Cross's picture

 You forgot the "North Sea" ccys.  NOK & SEK ( brent ponzi trade).

Yen Cross's picture

 I can't get enough of "you". Hope ya did well this week.

akak's picture

Yes, I did, thanks for asking, but I am sure that "you" did better.

Yen Cross's picture

 Just treading water, like everyone else. Broke even./ 25-35-40.

Zap Powerz's picture

Relax.  Mother Nature's got this.

Gird yourselves for a swift kick in the nuts when She decides enough is enough.

Unless, of course, we elect Barack W. Obamney!

SmittyinLA's picture

I think North America has the greatest citizen counterfitting potential, "they" can still significantly lower the living standards in America to the tune of perhaps 1 billion more people before our living standards drop below our immigration standards.


There is plenty of room to debase, even if we run our of indigent Latinos there's Haiti, India, and all of Africa. 

TheFourthStooge-ing's picture

PicassoInActions said:

Apple is winning, another strike and fight in Foxconn


That's fucking wild. Apple leans on Foxconn to boost production of Telefapple 5. Frustrated by longer hours, inadequate training on the new product, and unrealistic quality expectations, Foxconn assembly line workers kick the living shit out of the quality control inspectors. Management ignores the complaints of the QC inspectors. The result is work stoppages by both line workers and inspectors.

Apple had better watch its iHubris. An incident like this could be the loose thread that starts the unraveling of its precariously perched iEmpire, which would be iFuckingHilarious.

kevinearick's picture

Capital vs. middle class welfare is not a choice for labor; labor has no interest in a ponzi demographic lottery reduction system, which is why it does not collect the derivative, non-performing capital, why it is so far ahead in time, and why the empire black hole is so strong. Time is not money; time is much more valuable. Labor needs no favor from capital or the middle class.


Quality of Life vs. Jobs for Robots


Well, well. The stack is popped.

At bottom, Admiral Pansy,

Caught in his own net,

Vainly debasing currencies, State by state,

Stealing from every man, woman, and child,

In a shrinking border of borders,

Between waters, false assumptions all.


Nothing worse than a false flag,

Missioning hypocrite Christians,

Training whores to collect slaves in queues.

From the family law civil zoo they come,

Normalized to sell out their own,

Of, by and for the New new order,

Mealy mouth Virginia politicians,

Making bigger and bigger promises; Aloha.


San Diego, Gibraltar, sewer’s end,

Expanding promises on contracting revenue,

Sailors face down in their vomit,

Middle class thrown under the train,

Capital, generations removed from providence,

Demographic cliff at continent’s end.

Navy Senator, a piece of discarded gum,

Traveling shoe to shoe, to president.


USSNavy, fox guarding the hens.

World leaders as puppets,

In on MADness from the beginning,

Liquidation through global trade,

Mutually assured embezzlers,

Fleeing to one another’s country.

Global trade collapses; PMs rise.


Who wants to be Hawaii,

Servants to useless capital expansion,

Increasingly corrupt middle class unions,

Enemies to their own race,

Choking their own,

With empire family values?


Nothing quality cannot fix,

Only you, the individual, can create,

Escaping corporate gravity,

With kindness of strangers,

Enemies of State,

FIRE assumptions expunging liberty.


Delay, delay, back of the queue

Their own always in front of the line,

Increasing pressure on decreasing volume,

Arbitrary, capricious, and malicious,

Dc gatekeeper nodes sinking costs,

In a war of attrition.


Popularized education propaganda;

Labor requires govt largesse;

Positive empire feedback,

In a digitally closed system.

Labor extends the border fulcrum,

Stepping off to ignite FIRE,

In its own shortening.


Capital and middle class rule of law,

False assumptions perceived as order,

Labor alternating disorder,

Beyond empire perception,

With incremental sight & quantum anti-sight,

Currency deflation into non-performing inflation,

The almighty rehypothecating ATM.


Middle class running to capital,

With stolen secrets from labor,

All jobs to china, under the HR boot,

Viral demographic expansion to crash,

Fixed capital replacing mobile humans.

If Nuremberg is not a defense,

What is Volcker’s excuse?


Gravitron collapse of middle class,

Suffragettes all, seeking equality,

Themselves always first in line,

Admiral Flynn, tights and all,

In the bird’s nest, wingless.

One man, one woman, under God,

Makes and breaks the empire,

Check mate, reasoning soul.


Govt of, by and for delay trapping of power.

Tell it what you cannot,

Acquire the intermediary skill,

See the unseen for yourself.

Who am I to choose Admiral;

The guy that delivers propulsion?

Who is interviewing who,

And to what end?


The girl risks all,

Applying for non-existent jobs,

HR busy work and empire fantasies,

The clothes on her back,

Walking leagues to the next appointment,

Foot prints in the sand,

The anti-sign to all signs.


Only your own, self as enemy,

In a world of vacuous souls,

Rushes by at the speed of empire,

In a hurry to get nowhere,

Ignoring at will,

False flags, everywhere.


Social condition is a function of family decisions embedded in DNA over time, which is why the only way out is kindness of a stranger, the point of which is to re-learn discernment: “when both the privileges and disqualifications of class have been abolished and men have shattered the bonds which hold them immobile, the idea of progress comes naturally into each man’s mind and all men want to quit their former social position.”

NotApplicable's picture

You really don't think anyone would read this, do you?

How 'bout you get your own blog?