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Saxobank CIO Warns We're About To See A Full-Scale Currency War
There's increasing risk we'll soon see a "significant paradigm shift" from China in its attitude to the strength of its currency, warns Saxobank CIO and Chief Economist Steen Jakobsen. He says we're about to see a full-scale currency war, notably between China and Japan, two of the world's greatest exporting countries.
There are a number of important world meetings over the coming few weeks and the Chinese will be "very vocal", says Steen, as it's getting increasingly worried about its loss of growth momentum. The yuan has strengthened significantly in recent weeks while the yen has declined substantially. The country's determined, he says, to refocus and maintain its export share of total growth.
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About to see a currency war?
Has he seen the RUB/USD?
it's still only the beginning.
Everyone into the pool!
Two largest US debt holders facing off, one currency pegged against the USD, the other printing like mad and hot-swapping for USD, both of which count Europe as a top export market, one standing with the BRICS, the other with hanging out with NATO, more than a little bad blood between them and both sharing a deep fascination with warfare. We're certainly all in the pool, flailing about between the double-flushers, comprehensively rubber ducked. Pass the paper.
Nah, what we've been experiencing is the major currency countries each taking its turn debasing its currency. You'd almost think the G7 were colluding or something.
Just trying to add a little spice, jeez. Who wants to hear a story about everyone just doing the same stupid shit since the war? Zzzzz...
'The Alarmist'. Pfft...... Here, have a clipboard.
yellow metal, yellow metal, mello yellow
The petrodollar has already lost.
An American, not US subject.
"Guillotine the Fed!"
pshycho tower of babble, fiat debt based currency, was born to ashes at birth. Now the flaming burn down from the psycho babbling central banksters, illuminates fiancial hell for global rank'n file citizens who haven't a clue what real money is.
duh! where's he been the last 3 years? it's been on like donkey kong for a while now
As opposed to the currency war we are already in?
we are at inflation/deflation spiral... war is coming
We are only in the very beginning stages of a full blown Yen collapse; USDJPY = 300 sooner rather than later. How else do you repay 1 QUADRILLION Yen debt and growing larger by the day? Japan is a basket case, but they will do whatever is necessary to make sure they have the export edge; ergo cheaper currency.
www.traderzoo.mobi
The "Brussels Team" should be able to handle more than one Central Bank at a time. I'm sure they are more than capable of crushing savers in multiple nations.
The longer this continues the more contrary I become.
War ist pointless if all the warring parties have unlimited supplies in real time. So what should a currency war look like in a globalized, interconnected world? Whoever wins the war is going to die once the first loser dies.
China has reluctantly allowed its yuan exchange rate vs. the US dollar to appreciate. Japan's actions give it cover to depreciate again.
It is absolutely essential for China and South Korea to match Japanese currency depreciation, in order to hold on to the marketshare they have now. Without the Yen doubling in value relative to the US dollar during the Clinton years, while the Won and the Yuan were depreciating to the dollar at about the same rate, I doubt that the Chinese and Korean economic expansions could have been nearly as great.
Since Japan has to get back a measure of wat it has lost, and China and South Korea have to keep what they have gained, currency wars are inevitable but also necessary. As long as the United States remains the "sucker nation" which keeps buying imports over domestics, Each export-oriented nation will play this side to the fullest.
I agree that it is dangerous to lose our manufacturing capabilites.
However, I am not so clear which nation is the sucker? The one that receives the digital ones and zeros, or the one that receives the commodities and goods?
Well, here is a hint. HH. The one who has gutted its manufacturing base at the expense of it's middle class, that supported the enrichment of a corrupt communist regime, the one who allowed a huge transfer of real wealth & technology to a foreign country with a very different political system that will eventually become a major security problem is the 'sucker'.
The Chinese may be taking '1 & 0's', but they are using them to buy real factories, pipelines & other infrastructure, while forging new alliances around the world and competing for resources.
You don't know who the sucker is? Seriously?
If it is one Asian nation, then I would say it is the one that relies on very expensive imported nuclear reactors (four of which have recently suffered meltdowns), imported uranium, and drastically declining imports of Alaskan crude oil for a majority of its energy needs. The one that lost a war and surrendered unconditionally.
What you pasted has nothing to do with who is the sucker, as our middle class is gutted, and the manufacturing based is eroded, regardless of what foreign nation we give away our long term security and well being to.
As for Germany and Japan, having currencies made to be debased, aren't they all? Anyway, the people who had their countries re-built after being utterly destroyed were the real beneficiaries of our largess, and their new systems were much more in line with our interests. China, not so much.
Aside from our National Security concerns due to a declining manufacturing base... there is this idea of a negative sum game in USA.
A play on Zero Sum Game (Zero Gain) is negative Game.
There are US Winners in executive offices and in High Finance on Wall Street. But there are much more Losers in USA.
- A man has to have a purpose, it is part of being a human
- USA is very competitive, has high regard for Work Ethics
- USA is very conservative, hold high values on Work, Education, Competition, Fighting, being Strong
- How does a man with no Job, high debt, forced to chose very expensive Education to gain success... Look himself in the Mirror
- How can a Nation like US continue forward with no logical success possible for the common man, who then faces bankruptcy when family health crisis occurs?
Not sure if I said it right there.
No, you said it perfectly.
Yes, he did, and it is a perspective worth contemplating and exploring....loss of self respect as a major contributor to our downward spiral.
Will China depreciate their money?
OR will they make a move to dethrone the usd ?... multiple layers here...we may very well see a China power move sooner than many think with Russian backing...afterall they seemingly have been loading up on Gold....
Loading up on gold is the power move.
Selling bonds on empty cities is the power move.
same guy who few months back oil heading north and stocks down....never gets it right. fade him
so things should get cheaper?
Yea, once the war is over you can go and take whatever you want if no one else is there claiming possession while pointing a rifle your way.
Is that Saxobank or Saxon Bank?
If its Saxon watch out for the Norman reaction !
Short the yen, short the ruble.
Profit off these puppeteers.
Big, historical moves make for big money-making opportunities. If you have the capital, might as well take a chance, it's all going to hell anyway.
Maybe it's time to switch the focus from importing and exporting, and pay attention to domestic markets for awhile. This craze to keep the flows of goods going, despite the pressures on consumers, leads to currency wars that may lead to victory abroad, but defeat at home. China and Japan need to get a grip, and forget about outdoing each other for now. Each has bigger issues at home to worry about. Take care of THAT, then when the cycle comes 'round again, you'll be in a stronger position to ride that wave.
Ebb and flow, people. When you're growing, you expand outward. When growth slows, you retrench, and prepare for the better times. It doesn't have to be non-stop, constant GROWTH! If Japan and China have to cut back on the number of container ships full of fake Louis Vuitton handbags and Hello Kitty ankle socks they export, then so be it. Your economy ought to be able to handle that without too much trauma.
yeah yeah currencywar whatever..
I would call it "joint global debt easing"
https://www.youtube.com/watch?v=IeMFXiEq_ow
Lemme try to re-frame this into layman's terms... If you look at this as the dollarized wealth pyramid -- as ZH has done many months ago (last year?) -- then you get:
Pyramid Base = Primary Wealth (Nature's Wealth, Real Assets) = $ ?? Trillions
Next layer up = Secondary Wealth = Man-Made Assets (Real Goods, Services, Businesses) = $ ?? Trillions
Next layer up = Tertiary Wealth = Paper Wealth, i.e. Stocks (shares of businesses) and Bonds (Debt instruments) = $ ?? Trillions
Top layer = FX Market = Currency Markets = $ ?? Trillions
Hyperspace = Derivatives = Side Bets on outcomes of the aforementioned Wealth Pyramid = Mt. Olympus of Financial Gods = $1,000 Trillion
For context, note that the Notional value of Earth ~ $350 Trillion
Seen in this context, what's the interplay between all these layers, when you have players and camps who are trying to (a) Keep Dynamic Balance vs. (b) Create Dynamic Imbalance? I worry about Clingons dropping out of Hyperspace (i.e. casue a cascade of falling Derivatives), uncloaking, and their sudden attack would shock FX markets, vaporize paper wealth, and lay claim to real and natural assets.
IOW: "All your asse(t)s belong to us".
Oh goody, a "paradigm shift". I loves me dem worn-out 1980s cliches.
But wait a minute -- I didn't hear anything in the clip about any quantum leaps.
ZH please note: I refuse to read any article or watch any video which does not mention both paradigm shifts AND quantum leaps. How'm I supposed to hit the ground running otherwise?
Recently released minutes from the last Federal Reserve meeting confirmed growing concern about the pressure a stronger dollar is putting on other currencies around the world. Bottom-line is other currencies are under assault because both economies are weak and countries are buried in debt they can never repay at real market interest rates. When investors become unwilling to buy the bonds of heavily indebted nations causing the bond bubble to burst the values of currencies in those countries will tumble.
While there are not many Bond Vigilantes there are a slew of Currency Vigilantes and they are ready to make their presence known. Recent weakness in the value of the Yen, Pound, and Euro must not go unnoticed. The Currency Vigilantes are acutely aware of when a currency is overvalued or ready to be re-pegged and pounce on the weak currency to tear it apart. The article below questions just how stable the currency markets really are and it may be a signal that currency trading is about to get very wild. Please note, this may also be sending a signal that the whole system is unstable and the stock market is about to drop like a stone as contagion spreads..
http://brucewilds.blogspot.com/2014/10/fed-concerned-that-stong-dollar.h...