There Is A Winner In The Currency War

Tyler Durden's picture

With the G-20 (and G-7) concluding with what appears to be a slap on the wrist and a wink-and-a-nod to Japan, it seems the game of competitive devaluation will continue. Much pixel and ink has been spilled the 'potential' winners and losers in such an evolving game, but as Bloomberg notes, there has been one winner in the last 10 years each time the world has fretted over "currency wars". As fear (and actuality) of currency wars flares, the USD has borne the brunt of the buying. From 2004's JPYtervention to Mantega's 2010 comments and each time in between, when competitive devaluation is on the world's lips, then the USD is implicitly bid as the currency du jour is offered to any and every willing carry trade riderthere is. The trouble is - for the lowly US investor - each time the USD is bid, so the US equity market has hit an FX-translated earnings hump and fallen back. So while talking heads will exaggerate the nominal performance of Japanese and British equity markets as their currencies free-fall, perhaps the US investor should be careful what they wish for.

As the world's reserve currency, the effect of a devaluation of a non-reserve currency (i.e. everything else) is implicitly to put upward buying pressure on the USD...


and each time the "currency war" flare has occurred, this USD strength has led to notable US equity weakness...


so perhaps, all those 'interventionist' hopers should be a little more nervous about the apparent decoupling of the US market - as its rotation unwinds...


Charts: Bloomberg

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mercy's picture

On a long enough timeline...


Nature will win the currency wars.

Atomizer's picture

The market correction has just been called. Blows dog whistle.

spinone's picture

The first graph shows a weak though significant correlation.  The second shows some correlation, but not a strong one.  So A=B and B=C so A=C is not a sure thing.  I think there is more to this than the simple two graphs show.

Don't let your need for a simple narritive mislead you.  Humans are suckers for a good, but misleading, narritive.

RockyRacoon's picture

It's all of the need for humans to look for patterns and confirmations.   The whole theorem looks weak to me.

But what do I know....   I just buy silver.

Yen Cross's picture

 Next week is going to be U-G-L-Y. All the charts are doji shorts.  Oh,... forgive the ( geriatriac feuds)

Golden_Rule's picture

Its only logical that when people (re:banks) sell their stocks and "buy" dollars stocks will go down and dollars will go up...

steveo77's picture

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dunce's picture

There are no winners in a piss fight.

sessinpo's picture

I beg to differ.


The bookies (bankers) make out just fine.

Darth Mul's picture

You guys see this?:

Now - let me ask you guys also - what, exactly, would it take for you to begin to suspect that the United States government is controlled by inter-related groups which are mainly foreign in origin?

What level of ass-kissing would suffice for you to entertain the premise that international banks, and Likudnik Jews have got control of the United States political branches, and much of the intelligence services?

Keep chatting about what you'll do when they come for your guns in the meantime - you fucking idiots already lost.  You lost when you let them get away with 9/11, and you'll keep losing if you keep worrying about symptoms rather than disease.

By the way, Fischer gets in, the Israelis use the Americans to roll back Iran while they expel the Pals, grab some Lebanon, Syria and maybe Sinai  {"living space" you know}, then they pivot to China because we're on the right hand side of the curve and Iranian petrodollars don't matter - even if the central banks really intended anything other than consolidation and acquisition of real assets.


Yep - look for the Zionists to ramp up stealing tech and secrets to give to the Chinese very soon -  indeed, I suspect they have already...  any of you low level spook sell-out priorities-all-fucked-up-cunts recall those US missiles discovered in Finland being shipped to 'Korea'?   Awww, now you know that was Israel sending their future host some of those nice semi-effective missiles Uncle Same gave them, don't ye?  Yep - Israel can't wait to sell out the US to China, but first, it needs goyim blood and treasure to kill some more Muslim kids as the governments of the US, Canada, France, Britain, and myriad other lands become further enmeshed in the webs spun by the 5 largest banks, and "The Jews".


Iran and the false flag leading thereto....  whad do you guys think?


I think May.

Totentänzerlied's picture

I think Iran isn't being very grateful to the US after the US handed Iran Iraq on a silver platter.

are we there yet's picture

Did you know it is illegal in Iran to import any barbie dolls or accessory products, or Simpson cartoon franchise toys? The middle east is carzier than a bag of cats rolling down a hill.

MedTechEntrepreneur's picture

Gee...another anti-Jew rant on a goy who didnt get the grades the Jew did...pftpfttttt

Wilcat Dafoe's picture

Khazar, I'm sure you mean anti-Khazar - no really, a leading scientician essentially proved this:

I think it's cute that your response to a perceived racist post dealing in stereotypes is to assume that the guy is "another" non-Jew who didn't get the grades Jews do...   Sionce the irony escaped you, you're not that smart, therefore not a Jew.  Perhaps you're a Semite though - you know, like the Palestinians, who are the direct descendents of people who lived in 'Judea and Samaria' at the time of the First Kingdom  {that's a reference to Egypt, not to the mythical Israelite kingdoms}.

By the way, did you know that there were more Jews [Judeans] in Alexandria than in Jerusalem by as early as 400 BC?  How is it, exactly, you folks claim that 'Eretz Israel' - which was home to a great number of more advanced civilizations [see Joshua and Leviticus for a taste of how the Jewish god dispensed his "love"] - is your ancient home, and should properly be for Jews [Khazars] alone.. when Jews now claim, and have claimed the right to live anywhere they please for 2,500 years?

How.... is the gross ethnocentrism and double ethical standard in the Talmud - which I'm sure your playbook calls for you to 1] never actually read; 2] deflect any all criticism of the racism and hate therein as racist hate.  Hey, man - it's in there.  Some nasty shit is in the Koran, too, but no one calls you a "racist" for pointing it out.  For you and your ilk - criticism of Jewish hate, dual loyalty, or seeming penchant for dominating finance and media is not exactly 'false' {b/c, while overly-simplistic, it ain't} - it's just that you guys love having all this money and power yet still having the role of victim.  For fuck's sake, Hollywood has long been virtually a Jewish closed shop, and yet its always Jewish liberals praising multiculturalism and diversity.... but not in movies, and certainly not in leading federal agencies having to do with banking or finance  [SEC, CBO, CFTC, FDIC, etc etc etc].

Double ethical standards are the whole thing about Judaism as a religion, baby {I don't mean "secular" people who had a religious granny from Poland} - for truth, for justice, for mercy, and for loyalty. This is the thread running through the self-declared "chosenness".  The ethnocentrism precedes the anti-semitism, pal....  but the selectively sensitive hoi polloi let da teevee do their thinking for them, and the whole god-choo-choo-choosing-joos thing and making a contract of foreskin for {already settled} land - three times now -


It's like whining about the term 'Jewish Lobby' - Bill Kristol was so angered by this suggestion that mostly Jewish Israel Firsters dominate the US government that he orchestrated a giant smear campaign using the power of the ... Jewish lobby.. which ... doesn't exist.


And no media control either, eh?  Funny how the Hagel thing went from being about the Israel Firsters to the eee-vil Republicans  [who are, it seems, even to Bill Maher, controlled by Israel and its 5th column] versus Dems.  This way, the Jewish Lobby and its malignant power to warp US policy against US interests by conflating the two.. can exercise its vast and sinister power all while claiming it doesn't exist.. all while proving it exists over and over ad nauseam.

I mean - you're only fooling the already-fooled and your fellow brainwashed Jewish supremacist trolls.  So why bother with the lazy 'you're a nazi' stuff - particularly when you seemingly lack the wits to avoid being a fucking racist troll yourself, ya dumb racist troll!

By the way, you've been living a lie [so have the Xian Zio quislings...} 

This is short, and worth reading - and despite your limited faculties for gauging the varacity of claims, I daresay you'll find it hard to sleep well when you realize that the Jewish self-concept {like the self concept of many, and probably most groups} is, more or less, complete horseshit....  

The Way of the Rabbi -   Racism, intolerance and the Jews

You are brainwashed, but you can wake up, if you're willing to try, but you may be too brainwashed to be willing at all.  It's no skin off my ass, bro, but pardon me if I don't believe your happy horseshit nonsense about Jewish intelligence, history, or accept the notion that something is "false" or necessarily racist if it reflects poorly on the Jewish religion, or a {significant} minority of Jewish people, going back to and referenced by the Greeks and Romans, for fuck's sake.

At some point, jackass, it's not just that everyone hates you for no reason...  you just stopped seeing, or never saw the reasons...  perhaps made blind by holy scriptures that purport to make your particular tribe cosmic besties with a creator, and who gave you one set of rules for each other, and another for the 'goyim' you so clearly despise.


p.s.  I'm a 'halfsie' but prefer to consider myself Scottish.  The history is far less barbaric and the philosophers far less, well, obtuse, ethnocentric, and inane.

HeatMiser's picture

Thats how you try to explain it a goy who didn't get the grades a jew did. Jews aren't smarter or better. They have to rig the playing field to win. And by the way its not the JEWS its the ZIONIST. Try listening to Milo Peled he may help.

sessinpo's picture

Darth Mul:    "Now - let me ask you guys also - what, exactly, would it take for you to begin to suspect that the United States government is controlled by inter-related groups which are mainly foreign in origin?"



And I say to you, why would I, or you, or any US citizen need groups of foreign origin to be causing such havoc against the American citizen? In other words, even without such foreign groups, the American citizen should be worried about American groups (ie the government) to control and do horrific actions against its own people.


The idea of foreign groups is sensationalizing a situation to create fear. And my point is that it is irrelevant because you should already have such fear of your government because of the actions and events occurring. And those actions and events do not need a foreign group.






lickspitler's picture

listening to king world and zh it's like the  last days  in hitlers bunker.yes leader the jpm will be crushed and the gold price will rule again. unstack bitchez it's over

falak pema's picture

the G20 believes in QE all over, as solution, + corporate Tax increases.

The effect of "currency adjustments" subsequent to QE moves by CBs is considered as side effect of MAIN CAUSE : CB QE to generate worldwide growth by throwing liquidity into pot.

We will see how this CB central planning based on unlimited central bank liquidity works out. US being vortex of this global play as home of reserve, maybe of the desperate "brave new unlimited fiat world".

sessinpo's picture

Article: "As the world's reserve currency, the effect of a devaluation of a non-reserve currency (i.e. everything else) is implicitly to put upward buying pressure on the USD.."

Yep, and this is something I have suggested for months now and a major reason why PMs won't go ballistically high. It's because debts (debts and obligations worldwide are unpayable and exceed all the trillions printed), are US dollar denominated. And again, as disclosure, I do hold some PMs for the brief period of time I anticipate when the US dollar fails as the world's currency reserve.

What this means is that as debts need to be settled, it puts downward pressure on all other currencies and commodities while it puts upward pressure on US dollars. You have to have US dollars to pay your debts so you sell other things of value which include the goods you produce, your own currency and even commodities such as PMs.


Now we may see a few examples of localized inflation with nations that have done more to remove themselves from the global US dollar regime. But most nations play the global US fiat craps game. Thus they end up having to devalue their own currency as we saw in Venezuela. Or when they don't, the locals major companies go looking for US dollars instead of the local currency, as we are seeing in Egypt.

Both of those situations strengthens the dollar up until the point when nations get so heated in a currency (trade) war, that nations give up on the dollar. At that point, we might see a single currency backed by commodities of some sort.


Smuckers's picture

The only thing of value with all these currencies, is the basket.


are we there yet's picture

The Sigapore dollar is perhaps a long term hedge for value.