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"Livid" Top Chinese Economists Call BOJ Decision "Monetary Blackmail", Demand "Currency War" Retaliation

Tyler Durden's picture


The Chinese Central Bank has so far stoically endured the monthly injection of $85 billion in boiling hot money for the past seven months, lovingly delivered by the inhabitants of the Marriner Eccles building, even if it meant a proportionate hawkish response which has pushed the Shanghai Composite red for the year, and having to deal with a property market that is on the verge of another inflationary blow off top. But while the PBOC will grudgingly take this kind of monetary abuse from Bernanke, now that it has to deal with another de novo created $70+ billion in monthly central bank liquidity (poetically called Carry-O-QE by Deutsche's Jim Reid), this time coming from that loathed neighbor and one time invader across the East China Sea, China won't take it any more. As the SCMP reports, "Many of China's top economists are livid at what they view as an effective currency devaluation by Japan and are calling on the People's Bank of China to retaliate by weakening the yuan to defend itself in what they see as a new currency war." 

Of course, calling on the PBOC to "do something about it" is one thing, and certainly China whose GDP is still extremely reliant on net exports for economic growth would like nothing more than to crush the CNY, boost its exports and hurt Japan in the process. However, if it does that, it will merely accelerate already rampant home price inflation, which in the aftermath of the recent chicken culling birdflu outbreak and what is already a scracity of pork meat after last year's corn drought, will then spread to food prices and lead to mass social instability (something Japan, and its docile, irradiated population apparently has little to worry about).

More from South China Morning Post:

These economists, including Tsinghua University professor Li Daokui and ANZ Bank's Liu Ligang, see Japan's plan to double its monetary base within two years as "blackmail" and have criticised the Japanese central bank's decision to open the liquidity floodgates to bump up the economy.


Liu said Japan's unprecedented easing programme, aimed at ending more than two decades of deflation, was "a monetary blackmail" targeted at other export-driven Asian countries such as China and that the central bank should sell more yuan and buy the US dollar to push down the yuan.


He also called on authorities to guard against a fresh wave of hot money into China's fragile financial markets, warning that Japan's move would reignite the so-called carry trade, under which investors borrow in low-interest yen and invest in high- interest markets.


"The massive monetary stimulus by the Japanese central bank could spell doom for other nations in the region," said Tsinghua's Li, a former adviser to the People's Bank of China.

All spot on, and all well-known in advance, but apparently all the brilliant minds in the world forget that trade is a zero-sum game, and that Japan's current account and trade surplus gain (if any, recall both hit record lows recently) facilitated by a plunging yen, will come at the expense of other very angry exporting nations. This also ignores what happens to Japanese import energy and food prices, already exploding as has been documented here previously. The BOJ's hope: companies will promptly hike wages to make up for rising staples costs. We hope the central banker often confused with a Yankees pitcher is not holding his breath on that one...

As for countries hating Japan's guts right now, China may have to wait in line: if there is one country that has to be truly livid at Japan it is South Korea, whose net exports account for nearly 60% of its GDP. So yes: the next currency war salvo will come most likely not from China, which is already caught between a rock and a hard place, but from Seoul, where the perfect storm of a totally nutjob neighbor to the north has emerged just in time for Japan to do everything in its power to crush its economy.

In conclusion, if there is one thing Japan has done, is to make sure all the overnight angst so carefully focused on Europe in 2011 and 2012 (and where it is pretty much game over now following news that "success-story" Portugal will pay public workers in bonds not in cash, all it takes is someone to put down the time of death) shift forward, with the attention now focused not on the 3 am European open, but on what promises to be a daily 8 pm Eastern JGB volatity explosion each and every day.


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Sun, 04/07/2013 - 14:27 | 3418889 Uber Vandal
Uber Vandal's picture

I wonder how long before the BitCoin to gold ratio is 1:1 before the Dow to gold ratio is?

Sun, 04/07/2013 - 14:29 | 3418895 amusedobserver
amusedobserver's picture

China is choosing the wrong retaliation.  It should demand gold in payment for trade debts.

Sun, 04/07/2013 - 14:33 | 3418902 The Abstraction...
The Abstraction of Justice's picture

They will turn around and give them an IOU gold instrument.

Sun, 04/07/2013 - 15:01 | 3419013 ACP
ACP's picture

Whever they do, these top Chicom "economists" and other policy-makers better get on the ball before the money they worked so hard to steal is devalued.

When the time comes to finally flee to Vanouver, they'll need enough money to live out the rest of their lives there and bribe Ivy League admissions officials to get their children into the best colleges illicit money can buy.

Sun, 04/07/2013 - 15:28 | 3419093 DoChenRollingBearing
DoChenRollingBearing's picture

Speaking strictly my book here, I would encourage China S. Korea and Japan to ALL start lowering their currencies as quickly and deeply as possible...

Cheaper bearings for us...


Of course, that might do all all of those countries grave harm in the longer term.

Sun, 04/07/2013 - 15:45 | 3419158 knukles
knukles's picture

Don't print till you see the whites of their eyes.

Sun, 04/07/2013 - 16:02 | 3419210 markmotive
markmotive's picture

China doesn't have to do go to war with Japan. Fukushima is doing China's dirty work already.

2 years later...the nuclear disaster rages on.

Sun, 04/07/2013 - 16:37 | 3419298 Supernova Born
Supernova Born's picture

Currency manipulators livid about currency manipulation.

China is letting their proxy North Korea set the tone.

War will be currency manipulation by other means.

The world is a poker table full of well-armed cheating bastards. This ends in blood.

Sun, 04/07/2013 - 23:54 | 3420759 Parisnights
Parisnights's picture

Wondering if the missle N.korea tests fire next week will be aimed over Japan.

Sun, 04/07/2013 - 23:54 | 3420760 Parisnights
Parisnights's picture

Wondering if the missle N.korea tests fire next week will be aimed over Japan.  And  will we shoot it down?

Sun, 04/07/2013 - 23:55 | 3420761 Parisnights
Parisnights's picture

Wondering if the missle N.korea tests fire next week will be aimed over Japan.

Sun, 04/07/2013 - 21:21 | 3420344 Mugatu
Mugatu's picture

Just hilarious!  The world's greatest currency manipulator is mad because someone else is artifically moving their currency lower.  Oh this is going to be delicious!  How dare you  steal the money that we stole through an artificially low currency.

No tears here!

Sun, 04/07/2013 - 19:05 | 3419916 Mr. Magniloquent
Mr. Magniloquent's picture

Germany is currently on the 8/0 year payment plan. I'm sure that the Federal Reserve would be more than happy to offer the Chinese the speed and convenience of a 1/0 year plan as an act of good faith.

Sun, 04/07/2013 - 14:33 | 3418910 Sudden Debt
Sudden Debt's picture

They're already buying half of Azia and Africa for something much more precious for the Chinese... Food and Water.
And water will be the nexr Azian war.

Sun, 04/07/2013 - 14:48 | 3418959 Rustysilver
Rustysilver's picture

Sudden Debt,

Kashmir "conflict" is all about water.

Sun, 04/07/2013 - 14:52 | 3418972 ihedgemyhedges
ihedgemyhedges's picture

Reply from Japanese official:

"Prease do not retariarate. Here, flee sushi fo you.  It grows in dark, but prease not to woly.  Very ediber"

Sun, 04/07/2013 - 14:54 | 3418973 ihedgemyhedges
ihedgemyhedges's picture

dp.  meaning double post, not something else you sickos......

Sun, 04/07/2013 - 14:53 | 3418975 tbd108
tbd108's picture

And so is the invasion of Tibet.

Sun, 04/07/2013 - 14:55 | 3418989 Sudden Debt
Sudden Debt's picture

So is India/Tibet conflict for the Himalaya glacier waters

So is the Laos and Vietnam conflict over the damming of the Mekong

And Russia and China also have conflicts over the Siberia forest and water. This is also where China and Russia had a meeting over 2 weeks ago.

Sun, 04/07/2013 - 15:33 | 3419113 Rustysilver
Rustysilver's picture

Sudden Debt,

That's why looking at wider picture is better.  You won't miss stuff that's all ready there.

Sun, 04/07/2013 - 15:54 | 3419187 Deacon Frost
Deacon Frost's picture

Right SD, and this is also part of the reason they annexed Tibet, for the water sources coming from the Himalayas.

Sun, 04/07/2013 - 19:06 | 3419895 booboo
booboo's picture

Ask MF Global clients about the difference between buying and keeping. China (and the U.S.) can buy all the foreign dirt they want but keeping it from looting armies is another thing. If you think Asia and Africa have too many Kalashnikov's now, wait till thing really get going. Neutron bombs were made for this type of conflict. "Don't fuck up the natural resources or the infrastructure General McDipshit"

Sun, 04/07/2013 - 14:58 | 3418998 Cyrano de Bivouac
Cyrano de Bivouac's picture

If they do that they can expect a flood of opium in return.


Sun, 04/07/2013 - 14:59 | 3419006 edwardo1
Sun, 04/07/2013 - 15:23 | 3419080 dick cheneys ghost
dick cheneys ghost's picture

Been following Victor for a couple of yrs now..........He is an interesting fellow.........Nobody presents the dollar v euro argument better than Victor........

Sun, 04/07/2013 - 15:39 | 3419129 Bay of Pigs
Bay of Pigs's picture

But he is terrible on gold and silver issues. 

Sun, 04/07/2013 - 15:43 | 3419154 dick cheneys ghost
dick cheneys ghost's picture

He is a 'freegolder' so he loves Gold........and hates silver......

Sun, 04/07/2013 - 17:01 | 3419384 Bay of Pigs
Bay of Pigs's picture

Thx. I stand corrected. 

Sun, 04/07/2013 - 15:01 | 3419008 Cyrano de Bivouac
Cyrano de Bivouac's picture

If the Chinese demand gold in payment for trade debts  they can expect a flood of opium in return.

Sun, 04/07/2013 - 15:39 | 3419130 kliguy38
kliguy38's picture

Wait until one of them says Fuck it and starts printing and just buys the SHTF......and of course the War soon to follow

Sun, 04/07/2013 - 22:31 | 3420562 honestann
honestann's picture

They ALL know they should do this.  But they all know what would happen --- exactly what you say: WAR.

Sun, 04/07/2013 - 22:35 | 3420574 honestann
honestann's picture

Absolutely.  And you know what?  They could let people buy $3000 worth of goods for 1 troy ounce of gold... and everyone would continue to pay in fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-note toilet-paper.  But if a few folks started to convert their fiat into gold to pay the Chinese, gold would exceed $3000 per ounce in roughly 20 minutes.

So hell, make that $10,000 worth of goods for 1 troy ounce of gold.  Why not?

Sun, 04/07/2013 - 14:31 | 3418897 Sudden Debt
Sudden Debt's picture

The Bitcoin has been hacked. Game is over.

Sun, 04/07/2013 - 14:33 | 3418906 JackT
JackT's picture

2 or 3 times now(known)

Sun, 04/07/2013 - 14:45 | 3418945 css1971
css1971's picture

I very much doubt it.

Sun, 04/07/2013 - 14:53 | 3418969 dark pools of soros
dark pools of soros's picture

the 'bitcoin' hasn't been hacked, just some exchanges and online wallets.. 

like no one ever robbed banks right?  Or banks robbed customers?  Or Corzined a country's GDP?

I can get 6oz of silver for 1 bitcoin right now


Sun, 04/07/2013 - 14:55 | 3418987 hmmtellmemore
hmmtellmemore's picture

I'll accept a bit of hacking of bitcoin exchanges and wallets (which actually hardens the system quite well) over the wholesale theft of hundreds of billions of dollars that central banks perform every year.

Sun, 04/07/2013 - 15:34 | 3419117 EINSILVERGUY

Modified adage

Put a ounce of silver in one hand and a bit coin in the other and see which one fills up first

If you can hold it, you don't ultimately own it


Sun, 04/07/2013 - 15:42 | 3419146 debtor of last ...
debtor of last resort's picture

Nsa knows the code of course, just like many other agencies. And the establishment welcomes btc as another distraction, away from the precious metals. As long as it is a small digital playground, they will not call the plumber to close it down. Next week can be confiscation time, with a little help from anonymous, in return for not going to jail.

Sun, 04/07/2013 - 20:21 | 3420161 StychoKiller
StychoKiller's picture

Knowing the algorithms is NOT the same as knowing the (private) keys.

Sun, 04/07/2013 - 16:10 | 3419232 orez65
orez65's picture

Exchange your Bitcoins for silver as soon as you can because that Ponzi Scheme is going to crash real hard.

Sun, 04/07/2013 - 17:40 | 3419553 GMadScientist
GMadScientist's picture

Sure you can.

Sun, 04/07/2013 - 14:58 | 3419001 TraderTimm
TraderTimm's picture

@Sudden Debt

Honestly, you've had some great one-liners over the years - but you're acting like a complete muppet this time.

The only thing getting 'hacked' is every sovereign currency around the globe.

Sun, 04/07/2013 - 15:10 | 3419038 Bingfa
Bingfa's picture

Already in the US, regulators have taken note of the currency and moved to make firms report transactions worth $10,000 or more, according to the Wall Street Journal.

Just wait....

Sun, 04/07/2013 - 15:36 | 3419124 Rustysilver
Rustysilver's picture


Fed wire triggers 10k threshold since forever. WSJ is on the case 20 years too late.

Sun, 04/07/2013 - 16:29 | 3419285 Bingfa
Bingfa's picture

Very true but.....Bitcoin users thought profits on their currency was tax free.

The IRS is going to be using different tactics this year....

"The Internal Revenue Service is collecting a lot more than taxes this year–it’s also acquiring a huge volume of personal information on taxpayers’ digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it’s never gone before."

Sun, 04/07/2013 - 15:19 | 3419061 seek
seek's picture

A bitcoin exchange was hacked. Not bitcoin itself. This has happened a few times in the past, and is because of the increaase in value. Don't leave your bitcoins on exchanges.

It caused a momentary decline in bitcoin last week. Pricing has already recovered, and is pushing $160 now -- higher than when the exchange hack happened.

Sun, 04/07/2013 - 15:28 | 3419095 MrNude
MrNude's picture

He has got a point though I wouldn't trust Helicopter Ben, Paulie 'UFO WATCHER' Krugs or any other of the banking or central planning ilk to let Bitcoin stick around when the shit hits the fan it'll either get hacked by the DOD or outlawed. Can't have loose ends being a thorn in their sides and disrupting the narrative after all. 

Sun, 04/07/2013 - 16:23 | 3419268 Quinvarius
Quinvarius's picture

It will be eventually.  There is instant payoff in it.  Reminds of when everyone said only MSFT products were hackable and you had to use AAPL or LINUX.  Eventually, someone is going to find a way to credit their account. 

Sun, 04/07/2013 - 14:37 | 3418914 useless_fact
useless_fact's picture

Any program that runs right is obsolete.

Sun, 04/07/2013 - 15:03 | 3419017 Banksters
Banksters's picture


Christine Lagarde: BoJ's monetary blitz will help growth



Growth of what, monetary cancer, poverty, desperation?

Sun, 04/07/2013 - 15:50 | 3419170 knukles
knukles's picture


Mon, 04/08/2013 - 05:55 | 3421090 MFLTucson
MFLTucson's picture

Can you expalin to all of us the value of the Britcoin? Before I tell you you are and idiot, I wanted to allow you to prove it to all of us.

Sun, 04/07/2013 - 14:29 | 3418894 Sudden Debt
Sudden Debt's picture



Sun, 04/07/2013 - 14:40 | 3418928 Joebloinvestor
Joebloinvestor's picture



Sounds like a typical Los Angeles riot.


Actually it is called,"I'll show me!"

Sun, 04/07/2013 - 15:46 | 3419166 Tall Tom
Tall Tom's picture

I cannot figure why someone will burn down their own section of town.


Now if they had just moved it over to Beverly Hills, coincidentally very close, then it would have made a better impact on their cause.


Of course then the LAPD would have set fire to all of Watts in retaliation. They'd have been Waco'ed


La Jolla, Del Mar and Carlsbad in San Diego County are where riots might be affective.


You know that Mitt Romney lives in La Jolla?


Not that it is being planned...But that is where riots might make an impact...if it needs to progress to that point.

Sun, 04/07/2013 - 14:44 | 3418943 css1971
css1971's picture

Japan would have to devalue what, 70% or something like that to be competitive with China, while they only have to devalue about 10-20 % to compete with Korea...

i.e. Korea is Japan's target not China.

Sun, 04/07/2013 - 15:04 | 3419016 One World Mafia
One World Mafia's picture

China and Japan are helping the US keep the dollar from crashing by devaluing their currency. China has a huge base of consumers within China that could afford to buy the fruits of their labor if their currency was strong.

Sun, 04/07/2013 - 15:27 | 3419091 WmMcK
WmMcK's picture

"Watch out, you might get what you're after"

-- D. Byrnes, but no relation to Fat

Sun, 04/07/2013 - 14:32 | 3418896 The Abstraction...
The Abstraction of Justice's picture

Bitcoin 1, Bitcoin critics 0

Sun, 04/07/2013 - 14:58 | 3418996 hmmtellmemore
hmmtellmemore's picture

But it isn't gold/silver, so how can it be worth anything?

(stacker "logic")

Sun, 04/07/2013 - 15:05 | 3419018 The Abstraction...
The Abstraction of Justice's picture

They say the dollar is not worth anything, and yet people will slave for 100 hours a week to make the stuff.

Sun, 04/07/2013 - 15:22 | 3419072 edb5s
edb5s's picture

And promptly convert those earnings into real money.

Sun, 04/07/2013 - 19:58 | 3420083 Croesus
Croesus's picture


Sun, 04/07/2013 - 14:32 | 3418901 savagegoose
savagegoose's picture

i have good feeling about gold come market open.

Sun, 04/07/2013 - 14:55 | 3418986 dark pools of soros
dark pools of soros's picture

I got a boner for bitcoins... and the market never closes



Sun, 04/07/2013 - 15:02 | 3419012 wee-weed up
wee-weed up's picture

Uh, it clearly states on the package...

"Seek immediate medical help if you experience an erection lasting more than 4 hours."

Sun, 04/07/2013 - 15:22 | 3419070 Birddog
Birddog's picture

if it last more than 4 hrs...Im going downtown!!!

Sun, 04/07/2013 - 15:24 | 3419071 Birddog
Birddog's picture


Sun, 04/07/2013 - 15:25 | 3419081 WmMcK
WmMcK's picture

Priapism, bitchez.

Sun, 04/07/2013 - 16:16 | 3419249 llbutterfat
llbutterfat's picture

If I get a boner that lasts longer than 4 hours. I"m taking a video.

Sun, 04/07/2013 - 17:45 | 3419586 Bicycle Repairman
Bicycle Repairman's picture

If mine lasts longer than 4 hours, it's my wife that's going to the hospital.

Sun, 04/07/2013 - 18:11 | 3419722 post turtle saver
post turtle saver's picture

+1, that's the spirit!

Sun, 04/07/2013 - 15:58 | 3419190 wee-weed up
wee-weed up's picture

Typical BitCoiner...

fap...fap... fap...

Sun, 04/07/2013 - 20:12 | 3420133 Croesus
Croesus's picture

Come on now, let's be nice and not "Burst their Bitcoin"....I mean, "burst their BUBBLE".


Sun, 04/07/2013 - 18:09 | 3419712 Lost Wages
Lost Wages's picture

"the market never closes" except when an exchange or cloud wallet service gets hacked or DDOS'd. but as long as you never want to get your money back out of the system, bitcoins are great.

Sun, 04/07/2013 - 14:33 | 3418907 cherry picker
cherry picker's picture

China to Fat Boy.  "Go ahead, the Nips have it coming."

Fat Boy replies, "If I do, they'll take me out!"

China says, "Don't worry, we have your back."

Meanwhile there are those in "developed" countries who need a diversion to fill wallets who are itching to "correct" this problem and show everyone who is morally true and great, are watching.

"Should we show them?"

Obama smiles, "let us wait just a little bit, we'll get them as we are great."

Goldman Sachs is making plans to do God's work throughout this as fortunes must be created and destroyed and Gods work must be done.

Sun, 04/07/2013 - 15:53 | 3419179 Tall Tom
Tall Tom's picture

Yeah...You have a point...It is not a good time to piss off the Chinese. (Of course then they DO IT. Are they NUTS???)

Sun, 04/07/2013 - 14:36 | 3418913 americanspirit
americanspirit's picture

"We hope the central banker often confused with a Yankees pitcher does not hold his breath. "

Actually there is a very rare form of suicide in Japan that consists of holding your breath until you die. Only the most disciplined samurai know the technique. So in reality, let's all hope that the BOJ chief, Samurai that he no doubt is, does hold his breath until employers raise wages to offset inflation. Sayonara, bozo-san.

Sun, 04/07/2013 - 14:53 | 3418967 it aint paranoi...
it aint paranoia if they really are out too harm you's picture

Can you provide documentation?

Sun, 04/07/2013 - 15:54 | 3419186 Tall Tom
Tall Tom's picture

Not only the bait but...Hook...Line...Sinker...



Sun, 04/07/2013 - 15:58 | 3419197 knukles
knukles's picture

Many medical sites contend that one cannot hold ones breath until they die, for one passes out first and the natural reptilian survival emotion takes over and one begins breathing again.
However, the prolonged holding of ones breath can cause serious brain damage as exemplified by the famous "Notably once a Consultant to Enron", Paul Krugman

Sun, 04/07/2013 - 16:22 | 3419263 americanspirit
americanspirit's picture

I was trying to hold my breath but all I accomplished was getting my tongue stuck in my cheek

Sun, 04/07/2013 - 14:35 | 3418915 swissaustrian
swissaustrian's picture

If the Chicoms devalue against USD, Ben is gonna be forced to increase QE, because that's gonna create domestic inflation in China.

Sun, 04/07/2013 - 16:00 | 3419201 Tall Tom
Tall Tom's picture

So what do you think will happen to the Price of Gold, Oil, and Commodities as a result of the Japanese annoncement???


They will increase. Could Friday's Price Action in Gold have reflected this development?

Sun, 04/07/2013 - 17:46 | 3419578 robertocarlos
robertocarlos's picture

Send every (non terrorist) American 600 dollars.

Sun, 04/07/2013 - 14:36 | 3418919 css1971
css1971's picture

Just ignore the Chinese, they've been pegged to the USD for a year and barely coping with the inflation as it is, there's no way they are going to devalue to compete with Japan & Korea.

Sun, 04/07/2013 - 14:39 | 3418926 Bingfa
Bingfa's picture

Feds Identify 300,000 Americans as Terrorists.....

"Do you hate paying taxes? Are you fighting foreclosure? Do you feel like no one should be allowed to commit violence against you and don't always blindly follow the commands of the authorities? Do you film encounters with police or believe gold makes better currency than Federal Reserve Notes? Well you might be part of a domestic terrorism movement and not even know it."

300K are you kidding me.....maybe more like 30M+

Sun, 04/07/2013 - 14:55 | 3418981 noless
noless's picture


this comment thread made me cringe on several occassions:


"They teach police to recognize sovereigns by their convoluted legal jargon and "mouthy" defiance. "


articles like this are 100% Niemöller moments for me.

Sun, 04/07/2013 - 15:28 | 3419097 short screwed
short screwed's picture

luckily there aren't any of these types of charecters in zero hedge.

Sun, 04/07/2013 - 14:41 | 3418931 Satan
Satan's picture

From a country whose currency is pegged to the dollar...

Sun, 04/07/2013 - 14:52 | 3418971 hmmtellmemore
hmmtellmemore's picture

Yes, I'm not sure the Chinese are that angry when the Fed prints money as it "forces" them to do the same to keep up.  "Oh if I must..."

Sun, 04/07/2013 - 19:26 | 3419977 Quaderratic Probing
Quaderratic Probing's picture

Only PEGGED to stop rise, 6 to 1 can be 8 to 1 to help sell products

Sun, 04/07/2013 - 14:41 | 3418932 Room 101
Room 101's picture

Paging Archduke Ferdinand....paging Archduke Ferdinand, please pick up the white courtesy phone....

Sun, 04/07/2013 - 14:47 | 3418953 wee-weed up
wee-weed up's picture



Sun, 04/07/2013 - 18:00 | 3419661 Wakanda
Wakanda's picture

Ferdinand, don't turn your back on Gavrilo Princip.

Sun, 04/07/2013 - 14:43 | 3418934 jldpc
jldpc's picture

Funny thing about planned economies, the planning never seems to work out like you think it should. But don't worry, your new realization will soon materialize. The USD will soon be the strongest currency in the world by a factor of 2 times where we are now. Yeah, the rest of them will be about 50% lower versus us. So who will be the debt bubble king of the road - the man in charge- then? The debtor or the creditor? Us or them? Will they unite after failed efforts to outdo themselves on the way down? Not likely - old hatreds and all of that. Will they keep up the devaluations to absurd levels? Do they have a choice? Not unless you undo global trade - the great peace maker - don't shoot-up your customer nor your supplier. But how can that happen? They all depend on exports. So absurdity will reign.... until the world conference on relative valuation. You heard it here first - they are stupid enough to try anything - including fixed currency relationships. It is like a fixed/arranged marriage. Some get lucky; some don't. You heard it here first.

Sun, 04/07/2013 - 15:10 | 3419034 hmmtellmemore
hmmtellmemore's picture

Smells like truth.  By the way, keep this in mind: currency devaluations may increase exports, but it impoverishes the exporters.  Wait, what?  Yes.  The grand belief that devaluing one's currency helps one's exporters is a lie.  It is straight up pre & neo Keynesian garbage.  It is simply another excuse that pharoahs and their viziers use to convince the fellahs to allow money printing.

Let me repeat please: devaluations impoverish ones own exporters, which is not what you will hear from 99% of economists including most contrarian economists.  Due to sticky wages & relationships, an exporter will ship more product, for sure, but the gold that will be obtained in the end will be less.  Think of it as a forced national "liquidation sale".  Do companies gain profit from liquation sales?  No, they do not.  Then who gains?  The State.  The State gains from devalutions, not its exporters.  Period.  One should not buy into pharoah's bullshit.

The ongoing currency devaluations will not help any Japanese or Korean exporter--ever.  They might ask for it, as increased sales make a person think they are gaining more wealth, but keep in mind things like this: if you are losing money on each sale then more sales is a bad thing.

Sun, 04/07/2013 - 14:43 | 3418937 maskone909
maskone909's picture

I own gold, silver, and bitcoins. Bitcoins actually carries with it more liberty than PM's as much as it is painfull to admit. Bitcoins combined with crowdsource funding will bring an end to central banking. It will also limit power to governments. Makes me all tingally when i think about it

Sun, 04/07/2013 - 15:12 | 3419044 hmmtellmemore
hmmtellmemore's picture

Bitcoin would have helped Cypriots get their gold out.  Gold and bitcoin are friends for life.

Of course, I don't invest in bitcoin, I only buy them when I need to move funds.

Sun, 04/07/2013 - 15:18 | 3419062 WmMcK
WmMcK's picture

GoldMoney would work, too.

Sun, 04/07/2013 - 15:39 | 3419134 MrSteve
MrSteve's picture

Bitcoin will not survive the first EMP blast, let alone several pops of retalitation that knocks down the net, etc; (civilization, mostly). Then WOT?

Think local, physical, real wealth and production of valuable resources (food!) and you will be tracking real wealth, not another wet dream in cyberspace. Look for a single point of failure and with Bitcoin, it is the electronic construct of the web.

Bitcoin is very similar to the security we all imbue to the money market fund and Federal Deposit Guarantee system; they are all "constructs" of the mind.

Sun, 04/07/2013 - 16:12 | 3419200 maskone909
maskone909's picture

EMP's dont happen everyday, if at all. In the event of an EMP our infrastructure would be fucked any way so it doesnt really matter. Even if we went to a PM backed standard, it would eventually have an electronically integrated aspect. So in theory the EMP argument would apply to PM's too. If you really think about it, the concept of "money" is fiat in itself.

Oh, and btw isnt bitcion peer-to-peer? So as far as "the web" being down....

Sun, 04/07/2013 - 14:45 | 3418940 Zola
Zola's picture

Ok lets think for a second. China annouces gold backed RMB, what will happen to the capital sitting in JGB. Hint : this is a trick question. 

Sun, 04/07/2013 - 15:13 | 3419036 earleflorida
earleflorida's picture

when all paper... defined as fiat, becomes just that, paper.  well, ya know paper is just compressed pulp that's rehypothecated at 1000 degrees celsius, bleached, and sterilized... is truly outed as just 'pulp fiction'? buyer's should be... beware?!

but, as the roman's found out the hard way, their silver was worthless, and yet with another bigger but, the wealthy roman's per usual, still had all the gold, which never lost its value... nor, will it ever lose that value today in roman`esque amerikana

Sun, 04/07/2013 - 15:17 | 3419058 hmmtellmemore
hmmtellmemore's picture

What if the Japanese will tie their JGB to a physical landmark, such as a park or beach.  Then when the time comes that the land is either given (due to inability to pay) to a foreigner or defaulted on, what do you think the Japanese will demand happens?

Sun, 04/07/2013 - 15:35 | 3419112 Debugas
Debugas's picture

if china announces gold backed RMB it will get high unemployment and a revolution.

The trick is to teach people to keep their savings in gold but to pay them wages in paper and keep devaluing the paper

Sun, 04/07/2013 - 14:46 | 3418950 FieldingMellish
FieldingMellish's picture

Bitcoin going mental. The Austrians were right.

Sun, 04/07/2013 - 14:48 | 3418957 doggis
doggis's picture

why does this all smell of good ole "American apple pie" fingers.

stirring up a hornets nest is the American Art - perfected.

North korea = china

japan = usa

there is an empire war being waged and good ole APPLE PIE FINGERS is doing her best to stir the pot...


why NOW!  N. KOREA - why NOW....???why NOW- JAPAN KOMA"qe"KASI - WHY NOW.....???


Sun, 04/07/2013 - 14:56 | 3418984 Freddie
Freddie's picture

Poor Japan.  The only thing that may be left is Mt. Fuji, Mt. Debt and those robots they built.  I would like to get one of those girly robots if she was not irradiated.

Sun, 04/07/2013 - 15:15 | 3419054 WmMcK
WmMcK's picture

+ Mt. Gox?

Sun, 04/07/2013 - 16:25 | 3419274 americanspirit
americanspirit's picture

You mean the one that doubles as a suction device for sperm donors?

Sun, 04/07/2013 - 15:00 | 3419002 optionsman
optionsman's picture

so the Chinese did not think the Fed would succeed in dollar devaluation- they were right. now they think that BOJ would succeed in JPY deval? perhaps they are right. However if Chinese want free market price discovery for currencies etc, why wouldnt they let CNY float? is it because they fear CNY would strengthen? or weaken vs the trade-weighted basket? ;)

just saying.....

Sun, 04/07/2013 - 15:11 | 3419035 One of We
One of We's picture

Screw PM, bullish KIO3. When the fat lady sings this ends ugly...

Sun, 04/07/2013 - 15:13 | 3419042 Poofter Priest
Poofter Priest's picture

This mostly sounds like one nation building up 'justifiable rage' against another nation for doing a land grab.

"HEY!  About those islands YOU say you own..."

Sun, 04/07/2013 - 15:15 | 3419053 news printer
news printer's picture

What we owe the Germans ...

The conclusion of the Ministry of Finance and the historical responsibility of the government


Sun, 04/07/2013 - 15:16 | 3419056 Debugas
Debugas's picture

imagine a world where to satisfy total world demand it is enough to employ only 10% of the population.

Those 10% can all be in china or

5% in germany and 5% in china

or 1% in 5 counties each

one can easily imagine the rest of the countries having 100% unemployment (simply because they are uncompetitive in everything) - a bunch of failed states

Sun, 04/07/2013 - 17:43 | 3419566 robertocarlos
robertocarlos's picture

Could be heaven on Earth.

Sun, 04/07/2013 - 18:20 | 3419765 gatorengineer
gatorengineer's picture

you absolutely NAILED it.

Sun, 04/07/2013 - 15:58 | 3419193 buzzsaw99
buzzsaw99's picture

me raff out roud at the outspoken US-T shorts on here

Sun, 04/07/2013 - 16:00 | 3419198 quasimodo
quasimodo's picture

"No ticky, no wraundry, brossman!"

Sun, 04/07/2013 - 16:03 | 3419208 U4 eee aaa
U4 eee aaa's picture

For every action there is an equal and opposite reaction

Sun, 04/07/2013 - 16:27 | 3419277 pragmatic hobo
pragmatic hobo's picture

pot, kettle ... kettle, pot.

Sun, 04/07/2013 - 16:43 | 3419320 Cycle
Cycle's picture

Right. The Chinese CB scheme of 20 years of lending money so countries with failing manufacturing bases and increasing current account deficits not due to foreign direct investment can buy your products falls apart when the money paid back has less and less value.

Sun, 04/07/2013 - 16:27 | 3419278 palmereldritch
palmereldritch's picture

Yuan what army?

Sun, 04/07/2013 - 16:59 | 3419376 kevinearick
kevinearick's picture


Lose-Lose Equal Government, Assigned Rights to Bankruptcy

Dialing, Mr. Kissinger: this is an anti-missile calling. Is your Silo home?

One third of Bay Area residents were born outside of the United States...

US Senator Harry Reid is inclined to recommend more relaxed provisions for family-based visas...


Business and labor groups met over the Easter weekend and reached an agreement on a new guest worker program that will bring thousands of low skilled workers to the US...


It reveals that these groups' once formidable opponents against each other are now banding together to see a comprehensive immigration bill being passed...


The next picket line demanding immigration reform may not just be farm workers and health care providers. Engineers, techs, and start-up business owners may join in. This 'capital of Silicon Valley' has an important stake in easing the burden of acquiring permanent residency for its high tech work force...


Holders of the biggest portion of Stockton's Debt insured $165 million in bonds the city issued in 2007 to keep up with the payments to the California Public Employes Retirement System as property taxes plummeted...


Stockton now owes CalPERS about $900 million to cover pension promises, for the city's largest financial obligation. Many struggling cities across California [and the nation] are in the same situation...


Legal observers of the first-ever Chapter 9 bankruptcy case questioning state pension obligations expect an appeal to decide whether the 10th Amendment that gives rights to states is more powerful than federal bankruptcy law...


'There's going to be a tsunami of retirees in the next couple of years,' said Eric Lachia, Interim Organizer and Incorporator for US Medicare PH. Our goal this year is to promote and expand the current policy of [T]emporary 'emergency/urgent care' coverage..


Supreme Court hears same-sex marriage cases; huge potential for benefits...


With business and labor now in agreement, Congress is now more comfortable in moving forward with legislation...


Crack me the f- up; it's like listening to the preacher sermonize about his own stupidity as an example to the flock, every Sunday, in perpetuity, the we-are-all-sinners-so-we-should-have-infinite-do-overs speech, and then blame Act of God for 'black' swan events. Careful who you hop in bed with. Real labor doesn't negotiate. After the first quote, penalties and interest begin.

It's not a negotiation. Do you negotiate with your children (don't answer if you do)? DNA is DNA, and life/health is no accident, despite the best effort of 45x leveraged self-insurers with government guaranteed income to persuade you that is. The old man isn't passive; he just has much better things to do than negotiate with stupid. Humanity, much less the legacy family bank, is not the center of the universe.

Congress guarantees the outcome with consent of its manufactured, self-reinforcing majority, the Fed digitizes the debt money, the police come after your children, and you get martial law, with soft digital power, and then hard power if you are found to resist. War is not BLOODY complicates. I don't need a slide rule, or an IBM smartcontroller, to deliver the appropriate response. How do you suppose a guy gets run off from 7 different unions, in a row, for speaking his mind?

There is always a mob and it is always going over the cliff, chasing labor, which is the only entity capable of building a bridge to the future. Careful upon which bridge you choose to build your home. The self-fulfilling foundation of the corporation – public, private and nonprofit, is poverty, which is why it crumbles every time, as designed. A derivative is a derivative is a derivative, and contrary to his admonishment to you, Buffet is a derivative, as is his organization of feminists, and their mutual puppet in the White House. Cool is a fad/facade for the ignorant. How much of a tell do you need?

I am not going to be responsible for giving you an aneurism, by telling you what all is going on here in 'frisco, but I will relay this: so, I'm listening to the anxiety-ridden kid telling his story about getting a pad for giving up alcohol, wearing designer clothing brought down by young feminists from Seattle for the 'homeless,' before telling the homeless to go down and pick from amongst the clothes he was wearing when he was on the street.. It never ceases to amaze me how much of the economy is modeled after the Salvation Army.

Nothing, I repeat, nothing in this life is free, but if you consistently work intelligently, sooner or later, you are going to get your shot to jump that bridge. Just say no to stupid. It's a sequencing operation.

Sun, 04/07/2013 - 17:27 | 3419481 Lost Wages
Lost Wages's picture

Bit Trolls are everywhere these days. Seems perhaps they need to be taught a lesson. :)

Sun, 04/07/2013 - 17:54 | 3419631 jimmyjames
jimmyjames's picture

Bit Trolls are everywhere these days. Seems perhaps they need to be taught a lesson. :)


They're fine with me...takes some of the heat off us lowlife goldbugs-

Sun, 04/07/2013 - 17:59 | 3419662 besnook
besnook's picture

china doesn't need to do anything. the euros are trying to buy as many dollars as they can and so are the japanese. the dollar will go through the roof because of the momentary perception that it is actually worth something. south korea was/is the principle competitor of japan. they have been splattered by the old three wheeled japanese human shit fertilizer truck and they really can't do a damn thing except let north korea run over them so everything can be built from scratch with north korean slave labor. the new unified korea will exist as a psuedo province of china.


the japanese pearl harbor strategy may work this time, the greater asian prosperity sphere, 21st century model.

Sun, 04/07/2013 - 18:13 | 3419724 mendigo
mendigo's picture

Things are progressing nicely.
I picture Ben and Paul packing suitcases getting ready to disappear shortly.

Sun, 04/07/2013 - 19:11 | 3419933 chump666
chump666's picture

China is currently the most dangerous country on the planet as that is point in time: bird flu, pollution, economic/credit/shadow banking collapse, property bubble that is death personified, using North Korea (nuclear armed - thanks to China) to tell America to back off as it plans a full blown skirmish with Japan (any-day now), messing with Japan's bond markets/FX markets, attacking servers globally on a daily basis etc etc etc

And we worried about the middle east?



Sun, 04/07/2013 - 19:34 | 3420009 exartizo
exartizo's picture

The Bigger Picture:

Gold and fiat currencies are being deliberately devalued and manipulated world wide as a means of controlling and inciting war.

Sun, 04/07/2013 - 22:27 | 3420550 honestann
honestann's picture

Multiple choice question:

When the Japan economy bursts into flames, Paul Krugman will say:

A:  They didn't print enough.
B:  They didn't print enough.
C:  They didn't print enough.
D:  They didn't print enough.
E:  All the above in spades.

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