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World War Is Coming, Currency War That Is - Russia Warns

Tyler Durden's picture




 

It will not come as a surprise to anyone who has spent more than a few cursory minutes reading ZeroHedge over the past few years (back in 2009, then 2010, and most recently here, and here) but the rolling 'beggar thy neighbor' currency strategies of world central banks are gathering pace. To wit, Bloomberg reports that energy-bound Russia's central bank chief appears to have broken ranks warning that "the world is on the brink of a fresh 'currency war'." With Japan openly (and actively) verbally intervening to depress the JPY and now Juncker's "dangerously high" comments on the EUR yesterday, it appears 2013 will be the year when the G-20 finance ministers (who agreed to 'refrain from competitive devaluation of currencies' in 2009) tear up their promises and get active. Rhetoric is on the rise with the Bank of Korea threatening "an active response", Russia now suggesting reciprocal devaluations will occur (and hurt the global economy) as RBA Governor noted that there is "a degree of disquiet in the global policy-making community." Critically BoE Governor Mervyn King has suggested what only conspiracists have offered before: "we'll see the growth of actively managed exchange rates," and sure enough where FX rates go so stocks will nominally follow (see JPY vs TOPIX and CHF vs SMI recently).

 

Via Bloomberg:

The world is on the brink of a fresh “currency war,” Russia warned, as European policy makers joined Japan in bemoaning the economic cost of rising exchange rates.

Japan is weakening the yen and other countries may follow,”

 

...

 

The push for weaker currencies is being driven by a need to find new sources of economic growth as monetary and fiscal policies run out of room. The risk is as each country tries to boost exports, it hurts the competitiveness of other economies and provokes retaliation.

 

Yesterday “will go down as the first day European policy makers fired a shot in the 2013 currency war,” said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London.

 

...

 

The skirmish may lead to a clash of G-20 finance ministers and central banks when they meet next month in Moscow, three months after reiterating their 2009 pledge to “refrain from competitive devaluation of currencies.”

 

While emerging markets have repeatedly complained about strong currencies as a result of easy monetary policies in the west, the engagement of richer nations is adding a new dimension to what Brazilian Finance Minister Guido Mantega first dubbed a currency war in 2010.

 

...

...and as we warned over two years ago:

"We feel sad for the central banks, who apparently don't realize that in this war of attrition there are no losers, and the final outcome is the end of Keynesianism. We hope someone promptly discovers the FX equivalent of the nuke, and a global exchange occurs, as we, for one, can't wait for this most destructive experiment in economic fundamentalism to end already."

 

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Wed, 01/16/2013 - 12:31 | 3157775 sbenard
sbenard's picture

I'm personally not convinced that the coming "world war" will be restricted to currencies. I hope I'm wrong, but fear that I'm not!

Wed, 01/16/2013 - 12:33 | 3157786 otto skorzeny
otto skorzeny's picture

first the currency wars-then the shooting ones. that's all these assholes have left-although the next one won't have the "happy ending" that WWII did-it will probaly tear the US apart

Wed, 01/16/2013 - 12:54 | 3157831 Ghordius
Ghordius's picture

come on, otto, we had several currency "wars" in the last decades - it's very difficult to argue that they have to result in trade war escalations and then shooting wars

the highlight of one was Tricky Dick's "I'm a golden deadbeat and you are all dirty rascals" moment in August 1971

others that come to mind was how the British Pound got battered by NY for the invasion of Egypt, or Soros' raid, or the great speculative attacks on the european currency grid, etc. etc.

perhaps we should call them "friendly banter" instead of "wars", or borrow some term out of the S&M vocabulary

you could argue that the very setup of the EUR is an act of "currency sadism" on the USD and GBP - brings back the old adage that building fortresses can be seen as the prelude of an invasion and all that

historically, when a few major players - like in this case Russia, who has a lot of clout with the BRICS - call for an end there is a big, big meeting and a new monetary order is born

now that would be something to fear. China really, really wants a stronger, more important SDR, for example

Wed, 01/16/2013 - 14:22 | 3158619 trav777
trav777's picture

petroruble to the rescue!!!!!

Wed, 01/16/2013 - 15:16 | 3158976 SheepleInAction
Wed, 01/16/2013 - 18:45 | 3160006 Enslavethechild...
EnslavethechildrenforBen's picture

Your daily demotion is going hyperbolic...

Wed, 01/16/2013 - 14:32 | 3158674 DaveyJones
DaveyJones's picture

are we practicing currency sadism or currency masochism?

Wed, 01/16/2013 - 15:17 | 3158990 Winston Churchill
Winston Churchill's picture

Like the one in Mumbai last year.The unscheduled FinMin's meeting of the BRIC's.

All is in hand,only the announcement date remains unknown.

The big conference happens only after the details are thrashed out.

Wed, 01/16/2013 - 13:13 | 3157968 Ghordius
Ghordius's picture

found it, ZH was discussing similar things in this 2010 piece

               Are Or Aren't France And China Plotting An Alternative To The Dollar?

from there: "...China's desire to engage in a currency axis away from the US is no secret, and many have alleged that Beijing has approached both Russia and Germany in the past about a USD substitute..."

The background was the same: a G20 meeting. The possible result: a grand currency bargain like in the 80's

-----

edit: now I feel very, very foolish after noticing that ZH has (new?) a sidebar on the right that sports the same link under "You might also enjoy reading"

anyway, this should be worth reading (again): Jim Rickards: On the Reserve Currency etc...

Wed, 01/16/2013 - 13:29 | 3158228 mick68
mick68's picture

Its coming is it Russia?

Welcome to 2011, when the largest economy was actively engaged in the battle.

Why is it that nobody sees anything until its years old these days?

Wed, 01/16/2013 - 14:48 | 3158797 Matt
Matt's picture

Thanks for the link. Don't feel foolish, my "You may also enjoy reading" does not have that link, so it must be different per user or per visit.

Wed, 01/16/2013 - 16:11 | 3159278 Rentenmark
Rentenmark's picture

See also Rickard's book "Currency Wars".  His analysis has been pretty sound the past few years so I think it is worth while to listen to him.

Wed, 01/16/2013 - 14:50 | 3158810 foodstampbarry
foodstampbarry's picture

No more obozo as prez? I'm in, bring it on.

Thu, 01/17/2013 - 00:40 | 3161208 13thWarrior
13thWarrior's picture

Yes that is the plan to end US reign as a ruling state. Guess who will be replacing the US? Yes you are correct Zionist State of Israel expanded borders to encompass MIddle Eastern sweet crude.

Wed, 01/16/2013 - 12:42 | 3157824 EscapeKey
EscapeKey's picture

I think you're right. I predict Target will declare an all-out price war vs Walmart.

Wed, 01/16/2013 - 14:26 | 3158652 DaveyJones
DaveyJones's picture

Then like Iran and the US, Amazon will try to take them down with cyber warfare

Wed, 01/16/2013 - 13:32 | 3158255 Canadian Dirtlump
Canadian Dirtlump's picture

that is the scary reality, and the problem is, who the fuck will be fighting who. On one hand one would expect it to be the "west" versus Iran, Russia, China.. but...

 

given that Iran is lumbering along despite the west's best efforts, and neither russia nor china are anywhere near the dirtiest shirts in the laundry..

 

A more scary proposition is that we have in fighting betwee the developed mongoloid western countries at which point you're in a bar fight full of strangers all or most of whom have nuclear weapons... I'm glad I have some booze in my office.

Wed, 01/16/2013 - 16:58 | 3159515 zerozulu
zerozulu's picture

Its like 7-Eleven's graveyard shift. first peaceful robbery and if any one resists, shoot.

Wed, 01/16/2013 - 17:14 | 3159591 Chupacabra-322
Chupacabra-322's picture

@ sbenard,

The Dept. of Defense runs war game scenarios regarding Currency Wars.

Global currency war escalates over Euro: The Pentagon has undertaken war games on currency and finance as countries jostle for survival and position with the Euro in danger of collapse.

http://maxkeiser.com/2011/12/10/global-currency-war-escalates-over-euro-the-pentagon-has-undertaken-war-games-on-currency-and-finance-as-countries-jostle-for-survival-and-position-with-the-euro-in-danger-of-collapse/

Wed, 01/16/2013 - 17:17 | 3159604 sessinpo
sessinpo's picture

Where in the article or thread is it suggested that the coming "world war" would be restricted to currencies?

 

Point of this reply is to allow you to enhance your reasoning and comprehension skills.

Wed, 01/16/2013 - 12:31 | 3157776 SheepDog-One
SheepDog-One's picture

Gee, and here I thought we were clearly already in a world currency war for the last 3-4 years at least...WTF?

Wed, 01/16/2013 - 12:31 | 3157777 kliguy38
kliguy38's picture

Quit crying and just give us your oil for our fiat you pussies

Wed, 01/16/2013 - 12:36 | 3157793 otto skorzeny
otto skorzeny's picture

europe freezes to death if Putin turns off the NatGas spicket. that and Russia will once again take advantage of an enemies(US?) extended supply lines like they have before to devastating effect

Wed, 01/16/2013 - 12:37 | 3157811 kliguy38
kliguy38's picture

Checkmate to the paper monkies

Wed, 01/16/2013 - 12:42 | 3157825 Gazooks
Gazooks's picture

likely why the Germans want some phys on hand

Wed, 01/16/2013 - 14:29 | 3158659 DaveyJones
DaveyJones's picture

even pussies, especially pussies, want cash that can buy things

Wed, 01/16/2013 - 12:32 | 3157785 SheepDog-One
SheepDog-One's picture

'We feel sad for the central banks'...well, I sure don't.

Wed, 01/16/2013 - 12:33 | 3157787 A Lunatic
A Lunatic's picture

We win. The winnings will look a lot like carnage, but hey, who cares right................?

Wed, 01/16/2013 - 13:39 | 3158302 Shell Game
Shell Game's picture

When in doubt simply apply more lipstick to the carnage..

Wed, 01/16/2013 - 12:35 | 3157794 scatterbrains
scatterbrains's picture

mean while looks like a bunch of sand niggas getting tired of trading fiat for oil ?

http://news.yahoo.com/islamists-seize-japanese-french-nationals-algeria-...

Wed, 01/16/2013 - 12:38 | 3157812 otto skorzeny
otto skorzeny's picture

MoMar in Libya was a big stabilizing effect in the region as the local strongman- but once again "those meddling kids"(CIA,Mossad,Nato,et al) fucked things up and made it worse

Wed, 01/16/2013 - 14:49 | 3158800 donsluck
donsluck's picture

Didn't bother to read the link do to the racist baiting. -1 for you!

Wed, 01/16/2013 - 12:35 | 3157796 Son of Loki
Son of Loki's picture
Dozens held after Islamists attack Algerian gas field

 

http://news.yahoo.com/islamists-seize-japanese-french-nationals-algeria-...

Wed, 01/16/2013 - 13:18 | 3158051 Jack Burton
Jack Burton's picture

Good find Loki! Most people are not paying attention, but the istability in Libya and Mali are spilling over into Algeria which was already very tense. Arab Spring is not a term I like, but Algeria is primed for much of what we call the Arab Spring.
Libya's arms depots were quickly looted by all groups looking to rearm with better more modern versions of Russian and western infantry wepapons. The most dangerous being the hand held AA missiles, thousands of them, the infantry mobile anti tank missiles and modern unguided RPGS.
Algeria will light up into conflict, any battle in Mali or tribal battles in Libya will just push the losers onto Algerian soil where they can join forces with anti government groups.
NATO was happy to light the fuse in Libya, now the whole thing is blowing up in their faces. Syria is not turning ut to be the quick victory NATO planned, as Russia will not allow an air war against Assad's forces. To back this up, Russia delivered some Iskander Surface to surface missiles that can kill the Patriot Batteries in Turkey or Israel's Iron Dome radar sights. Syria has no plan to use these missiles, but they act as a counter weight to Turkey and Israel feeling free from retaliation should they begin to bomb Syria. Rumors are that the recent arival of Russian landing ship in Tartus is that they brought some mobile S-300 anti aircraft batteries. These are able to kill even the most modern Israeli aircraft and missiles. So again, Syria would have a real defense ability.
NATO and the USA have thought they could start and then control the Arab Spring as a force to deliever many nations into the NATO orbit. This is not working out. Algeria is primed to blow, keep an eye on it as the Mali fight expands!

Wed, 01/16/2013 - 13:27 | 3158214 Sandmann
Sandmann's picture

Ghadaffi should never have given Sarkozy that $50 million and opposing French Plans for North Africa was suicidal ......http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/reg...............

Wed, 01/16/2013 - 13:32 | 3158249 NooooB
NooooB's picture

Yeah Loki and Jack! Except the Tuareg region that is under dispute by the French, AGAIN, is in Mali, Algeria, and Libya. So... God job having any sense of history, geography, and your own ignorance...

Wed, 01/16/2013 - 14:31 | 3158667 reload
reload's picture

Consider the number of Algerians domiciled within France. Still think whats happening in Algeria is irrelevant, and not connected to Frances current and recent North African adventures?

Wed, 01/16/2013 - 21:53 | 3160726 dunce
dunce's picture

I was in France in the late 50s to the early 60s and it seemed that then most of their muslims were from Algeria, i doubt if that is still true because of open borders, generous social programs, stupidity, and the muslim aim of converting the world to islam whether they want it or not. It is a case of assisted cultural suicide.

Wed, 01/16/2013 - 17:46 | 3159746 DaveyJones
DaveyJones's picture

follow the uranium

Wed, 01/16/2013 - 13:37 | 3158288 Shell Game
Shell Game's picture

The 4GW contiues, as does the collapse of globalism, central planning and empire.  

Wed, 01/16/2013 - 12:36 | 3157799 Say What Again
Say What Again's picture

If everyone bartered in "units of gold," instead of fiat bullshit, this would not be an issue.

Wed, 01/16/2013 - 12:37 | 3157802 Falconsixone
Falconsixone's picture

"I love the smell of currency in the morning"

Wed, 01/16/2013 - 12:38 | 3157814 Gazooks
Gazooks's picture

burning

Wed, 01/16/2013 - 14:02 | 3158487 A Nanny Moose
A Nanny Moose's picture

Charlie doesn't surf.

Wed, 01/16/2013 - 15:07 | 3158923 Argentbilly
Argentbilly's picture

I love the smell of 90% in the morning.

Wed, 01/16/2013 - 12:38 | 3157813 ziggy59
ziggy59's picture

Gonna get jiggy with it...
First fiat wars, then real wars for real assets...

Wed, 01/16/2013 - 12:43 | 3157829 madcows
madcows's picture

Um, correct me if I'm wrong, but haven't the Central Banks of the World been printing like mad for the last 5 years?  Doesn't that constitute a currency war of who can devalue the best-est?  Note to author:  They've been waging a currency war for the last half a decade.

Wed, 01/16/2013 - 12:45 | 3157833 adr
adr's picture

Wait, I know what will fix all of this, a ONE WORLD CURRENCY!!!!

Has someone thought of that before? Wow, solves everything.

/sarc even tough it shouldn't be needed.

Wed, 01/16/2013 - 12:58 | 3157912 Ghordius
Ghordius's picture

arguably we had once one world currency: gold 

and yet even gold was nearly everywhere engaged in a chronic currency war with... silver

Wed, 01/16/2013 - 13:25 | 3158196 Sandmann
Sandmann's picture

Gold Standard worked because the British Empire had the raw materials and gold. Once the British Empire weakened the Gold Standard weakened. The Bimetallism Debate was the US wanting to use Silver to escape the London Gold Standard. War destroyed the Gold Standard for the British Empire as Vietnam did for the US

Wed, 01/16/2013 - 13:31 | 3158245 Ghordius
Ghordius's picture

interesting, I thought that the Bimetallism Debate was mainly fuelled by US Farmers having too heavy debts in gold - particularly in the 20 years in the 19th century where all prices went down

Thu, 01/17/2013 - 10:54 | 3162141 e-recep
e-recep's picture

the us dollar has been the one world currency for quite some time actually. other fiats were pretty insignificant when compared. it has run its course, though. it is dying a long death. soon the new world order planners will be strangling each other for money and pms.

Wed, 01/16/2013 - 12:47 | 3157835 Fix It Again Timmy
Fix It Again Timmy's picture

Currency wars began when the first goldsmith handed out more gold receipts than he had gold.  A good scam can run a long time....

Wed, 01/16/2013 - 12:47 | 3157837 The Proletariat
The Proletariat's picture

If Russia is just figuring out there is an currency war, then they already lost.

Wed, 01/16/2013 - 13:02 | 3157938 A. Magnus
A. Magnus's picture

Putin's been stacking gold for years now...if anything he's just jawboning for leverage...

Wed, 01/16/2013 - 12:56 | 3157890 Bam_Man
Bam_Man's picture

It is not to "boost exports". Currencies are being de-valued in an attempt to inflate away unsustainable and unpayable debts.

Wed, 01/16/2013 - 12:56 | 3157898 yogibear
yogibear's picture

Bernanke and the Federal Reserve along with people like Krugman won't be able to handle a world that reverts back to physical when the fiat is destroyed.

Wed, 01/16/2013 - 13:05 | 3157962 orangegeek
orangegeek's picture

Whether you agree or not, US fiat is backed by its own military.  Going back to a gold standard won't be happening anytime too soon - unless you know of a way to dismantle the US military.

Wed, 01/16/2013 - 13:27 | 3158207 koder
koder's picture

what makes you think the orders would be followed? =0

Wed, 01/16/2013 - 13:29 | 3158226 farmerjohn2112
farmerjohn2112's picture

You could also turn that around - 'the US military is backed by fiat'...

Wed, 01/16/2013 - 17:28 | 3159659 supermaxedout
supermaxedout's picture

Yes the bloathed fiat Dollar is  the achilles heel of the US empire.

And this is the fault of the US itself. They should not blame others for their mistakes. But its not everything lost for the US. The Dollar is continuing to have a value as long as at least the Saudis do accept Dollars and as long as the US military secures that raw materials in Africa and other territories are paid in Dollars. The problem is only these supplier countries of commodities have something in common with the US. They do not produce much beside these raw materials. While the US is not producing much anymore besides newly printed Dollars.

So the supplier countries have to buy manufactured goods in China, Euroland etc. That means the Dollar needs to have a value also in China and the EU and other industrial countries. Then everyting is fine. These permanently printed Dollars (Petro/commodities Dollars) are needed and used to buy manufactured goods thus fueling the economies of the manufacturers.So far so good.

The problem arises because the US is printing far too many dollars. The manufacturers of this world combined can not produce the amount of goods needed to match the present face value at todays exchange rates. 

The solution for the US is simple: Devalue the Dollar so that it matches again with the worldwide manufactured goods.  Have in mind, that the Dollar is the money of the whole world till now more or less. All other currencies are just derivatives of the Dollar. Only the Euro and the Renmimbi are not anymore totally dependend on the Dollar. Euroland and China do cooperate and together they managed that the exchange rate of the Euro and the Renmimbi is pegged to the Dollar at its present value. And they are not moving much besides the US tries all it can do.  Therefore it is a fact, that Euroland and China with the help of Russia and others have broken the US monopol to rigg exchange rates.

The reason why Euroland especially Northern Europe and China, but also North Korea and other countries  do not like that the Dollar is loosing value is clear.  In case of a devaluation of the Dollar by lets say 20% the potential to buy manufactured goods sinks exactly by 20%.  That means brutal recession because the clients suddenly have 20% less money. In addition such a move is triggering strong inflation all over the world in all currencies dealing with the Dollar (= all) . And that means, that all the savings of the Chinese and European population is loosing also suddenly a whopping 20%. Europe, China and many other countries have a "saver" culture.  They need this money for their old age, bad times etc. .

The US and UK are just the opposite they have a "credit" culture. However, the US and UK pensioners or soon to be pensioners (baby boomers) will be hit hard too by a devaluation of the Dollar. But and this is decisive, the US and the UK military occupy and control huge parts of the commodities of this world. These untapped commodities have always their value no matter what happens to the Dollar.  One can find such untapped commodities in areas like Afghanistan, Pakistan, North Africa (Lybia, Mali etc). South Africa is soon depleted but Zimbabwe and many other African countries are still full of precious raw materials. Plus the US and UK have very strong allies when it comes to controlling the commodities of this world: Australia and Canada 

This thing can not end good.  The opponents of US/UK do not want to accept the "Inflation Diktat" because it throws them back economically and their subordination would be complete. A complete defeat without hope that this system (Dollar System) would ever change to the better, to say that the UA would ever stop their imperialistic behaviour

That means, the opponents of the US/Uk want to crash the Dollar system because this is their only alternative.  Such a crash would harm the world economy by no doubt but the Dollar system would be in ruins and a more leveled playing field can arise from the ruins. 

My opinion, the "Dollar Wall" is going to fall like the "Berlin Wall" did. Out of a sudden from one day to the other. Maybe this year, maybe in 5  years or 10 years. But its inevitable. The US economy is to weak to defend the Dollar system. And the US military has only one option if they want to avoid the final Dollar collapse, which is : "Set the whole world on fire" . But this means  the US would loose also all and everything. Therefore this is not going to happen.  Except in case some " mistake " happens on one side or the other and the nuclear armageddon is breaking loose. This is a real possibility because in principle the world is again in a situation comparable to the hottest times of the Cold War. 

In case such a ""mistake" happens and mankind is erased from this planet it would then be proven, that greed and power addiction are the worst of all evil within mankind. It kills us all in the end including the so called elite of mankind. It clearly proves that there exists not the slightest difference between the dumbest man on earth and the smartest one. Both behave completely idiotic only the consequences are different. 

All man are equal. This is then undeniable proven but then its to late.

Wed, 01/16/2013 - 17:53 | 3159780 falak pema
falak pema's picture

its the strength and its the weakness. Thats what being an empire does.

Wed, 01/16/2013 - 17:09 | 3159563 Hubbs
Hubbs's picture

This is almost like a chicken or the egg conundrum. The military preserves the facade of fiat but fiat supports the facade of the military.

 

Off topic, sort of....but still has something to do with chickens....

 

Re: hyperinflation the chicken guy on you tube "the silverfuturist"  Martin Armstrong

http://www.youtube.com/watch?v=VkuAimUTp-Q&list=UUBgYfi5EKCfD7ZJiIBDArSQ...

 

made a point that the bond markets in developed western countries are too big to let  hyperinflation occur, short of WWWIII. Zimbabwe can have hyperinflation because it has no bond market to buffer or protect.

 

What gives with this "splanation?"

 

Wed, 01/16/2013 - 13:08 | 3157980 Josh Randall
Josh Randall's picture

The next G-20 Finance Ministers meeting sounds akin to a Murph and the Magictones reunion...looks good on paper until you sit through it

Wed, 01/16/2013 - 13:24 | 3158179 Jack Burton
Jack Burton's picture

Russia has also stepped up their gold mining and exploration for new gold mining sites. Putin see gold as a hedge against the almost certain currency wars followed by major currency crisis in the EU, Britain and perhaps the USA. Russia is corrupt, a very big problem, but they also now have a strong leader who is certain that tangible things, oil, gas and gold, along with other resources are what is going to count going forward. China needs what Russia has, and Russia is a market that is not saturated for consumer goods. Russia's problem is it needs to expand the wealth across a wider range of it's people. This will spur market growth and consumption. But the very corruption that is so visible in Russia is likely to keep the income growth inside a small circle of Kremlin connects businessmen and the vast mafia that is everywhere in Russia.
You simply can't even grow some potatoes in your back field and sell them in the local town without much of the profit being skimmed off by local mafia, protection racket is everywhere. Private security against other mafia costs money and loots most small business profits.

Wed, 01/16/2013 - 13:27 | 3158215 SmallerGovNow2
SmallerGovNow2's picture

Corrupt?  Sounds like the USSA...

Wed, 01/16/2013 - 13:41 | 3158322 theprofromdover
theprofromdover's picture

Yup, folks would do well to download a bucket of westerns, where the homesteaders and townsfolk are bullied by the local heavy.

Randolph Scott isn't just round the corner waiting for the call to protect us, we are going to have to learn how to get tough for ourselves.

Wed, 01/16/2013 - 14:41 | 3158739 reload
reload's picture

I am wondering where the SDR fits in with the currency conflicts. Lets say you are an exporter and recieve $.GBP.Yen.euros etc for your sales. Do you keep reserves of foreign currency roughly in line with the SDR compilation ... to keep the IMF happy etc? I dont know the answer, but I do know the SDR composition is due a reset in 2015. Currently the GBP makes up 11% of one SDR - but the UK has only 3% of the world ecconomy. Does this imballance make some currencies stronger/better bid than they deserve?

I have no idea - but could a re ballancing of the SDR be used in an attempt to de pressurise the FX markets? 

Wed, 01/16/2013 - 13:37 | 3158290 XtraBullish
XtraBullish's picture

This why we now have a GENERATIONAL SHORTING OPPORTUNITY in one asset class: CASH and CASH EQUIVALENTS. (Which is why the S&P is going to 3,500 in the next three years.)

Wed, 01/16/2013 - 14:54 | 3158848 donsluck
donsluck's picture

I don't agree. I think that the tug-o-war between cash and PMs means that cash and PMs are the only safe havens. The authorities can TRY to inflate debt away, but the (natural) forces of deflation cannot be stopped. So...cash for the deflation...PMs for the eventual reset.

Wed, 01/16/2013 - 13:38 | 3158292 theprofromdover
theprofromdover's picture

Merv says "we'll see the growth of actively managed exchange rates,"

in the same way as he says "excuse me, could you pass the cucumber sandwiches?"

FFS Merv!!!!!!!!!!

Wed, 01/16/2013 - 13:51 | 3158416 busted by the b...
busted by the bailout's picture

They are all pushing out paper, but pulling in gold.

The era of fiat will end, painfully, imo.  But how much longer it can hang on is unknown. 

There is no easy alternative, and as we know, no one can tolerate the discomfort of anything that is difficult.  So "they" will ride this horse until it dies.

Wed, 01/16/2013 - 14:03 | 3158497 joego1
joego1's picture

Live webcast, President Obama to announce 23 executive orders on his Currency Control Policies. New controls will include a national database of those who are deemed to dangerous to print money.

Wed, 01/16/2013 - 14:09 | 3158537 robnume
robnume's picture

Oh boy!! Fight! Fight! Again, I have a Fiat (currency) for sale. Wanna buy it? I'll sell cheap.

Wed, 01/16/2013 - 14:09 | 3158545 Freddy
Freddy's picture

Will this cause the price of adoption to fluctuate?

Wed, 01/16/2013 - 14:12 | 3158557 Silvertrader
Silvertrader's picture

A currencywar will be good trading material for forex traders. more volatility means more potential for profit, but also higher risk. I myself am not a very good currency trader. For that I make use of copy trading. With that you copy the best forextraders in the world. Let the currency war begin!!!

Wed, 01/16/2013 - 14:26 | 3158644 AnAnonymous
AnAnonymous's picture

Again?

Man, 'americans', they love their wars.

One could have thought 'americans' had already pushed the world into several ongoing currency wars.

But as war is consumption, and that consumption is an 'american' duty...

You are never one war too many in an 'american' world.

Wed, 01/16/2013 - 14:27 | 3158648 DutchR
DutchR's picture

War! huh-yeah
What is it good for?
Absolutely nothing
Uh-huh

War! huh-yeah
What is it good for?
Absolutely nothing
Say it again y'all

War! huh good God
What is it good for?
Absolutely nothing
Listen to me?

Ohhh? War! I despise
Because it means destruction?
Of innocent lives

War means tears
to thousands of mothers eyes
When their sons go to fight
and lose their lives

I said - War! Huh Good God y'all
What is it good for?
Absolutely nothing
Say it again

War! Whoa, Lord ...
What is it good for
Absolutely nothing
Listen to me?

War! It ain't nothing but a heartbreaker
War! Friend only to the undertaker
War! It's an enemy to all mankind
The thought of war blows my mind

War has caused unrest in the younger generation
Induction then destruction-
Who wants to die?

Ohhh? War Good God y'all
What is it good for?
Absolutely nothing
Say it, Say it, Say it

War! Uh-huh Yeah - Huh!
What is it good for?
Absolutely nothing
Listen to me?

War! It ain't nothing but a heartbreaker
War! It's got one friend, that's the undertaker
War has shattered many a young mans dreams
Made him disabled bitter and mean
Life is much to precious to spend fighting wars these days
War can't give life, it can only take it away

War! Huh Good God y'all
What is it good for?
Absolutely nothing
Say it again

War! Whoa, Lord ...
What is it good for
Absolutely nothing
Listen to me?

War! It ain't nothing but a heartbreaker
War! Friend only to the undertaker
Peace Love and Understanding;
tell me, is there no place for them today?
They say we must fight to keep our freedom
But Lord knows there's got to be a better way

War! Huh Good God y'all
What is it good for?
You tell me
Say it, Say it, Say it

War! Huh Good God y'all
What is it good for?
Stand up and shout it.
Nothing!

 

Dinosaurs, Home sapiens , ????

Wed, 01/16/2013 - 14:32 | 3158678 From Germany Wi...
From Germany With Love's picture

I hope Europe doesn't respond with currency debasement. I hope instead they make use of trade tariffs as an offset. Easier to reverse. It'll be the Great Depression all over again.

Wed, 01/16/2013 - 15:13 | 3158960 KnightTakesKing
KnightTakesKing's picture

Did you know that the signature of Timothy Geithner on US currency is fake? Does that mean that the federal reserve notes are also fake?

http://www.marketplace.org/topics/economy/geithner-interviews/timothy-geithners-signature-not-fit-print

 

Wed, 01/16/2013 - 17:26 | 3159623 sessinpo
sessinpo's picture

Of course I posted a long that a currency war has been going on for years a long time ago. This currency war isn't fresh. In fact, if you really think about it, all economics, all competition can be defined as war. Each individual, each city, each state, each nation is trying to get a leg up against others. It exist even in brief peace times. It just isn't considered war when things are going well economically for most. Little late for this thread, as we know historically, in the the late 1920s through the 1930s, massive amounts of gold were moved (shifted), prior and during WWII. And we see that now.

 

BTW, those massive amounts of gold stored in various places and repatriated in bad times, that wealth was never distributed to the citizens. It was kept at the banks, government and wealthy. So much for revolution and punishing the rich, eh?

Wed, 01/16/2013 - 17:26 | 3159652 falak pema
falak pema's picture

coming ? Coming?

Lol, that's a late call! 

Wed, 01/16/2013 - 18:19 | 3159864 Positive Dennis
Positive Dennis's picture

Russia has been printing a lot of money, just like everyone else. If they don't like what s going on, don't print money yourself.

Wed, 01/16/2013 - 18:48 | 3160019 falak pema
falak pema's picture

slight difference with USA : russia prints money and EXORTS oil n gas. Not the USA or EUro zone. 

Wed, 01/16/2013 - 21:24 | 3160613 hairball48
hairball48's picture

Currency War-->Trade War-->Shooting War

Thu, 01/17/2013 - 12:54 | 3162687 jerry685
jerry685's picture

The US dollar has taken a beating for sure....and that probably will continue..

 

So how does all the new fields of shale oil play in to all this...20 fields I believe with 100 billion barrels in the ground...

Horizantal drilling and fracking has opened up huge new reserves...

1500 drilling rigs turning to the right ...now ...more to come

It will take a few years for all this production to come on line...then what ?

 

Does this make the petro dollar more or less secure ?

As the US replaces other countries as the biggest global producer...with the largest reserves

Does this not mean oil importing countries will need to be in the US dollar and the good graces of America....?

 

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