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This Is Not A Drill: India, Russia And Thailand Prepare For Currency War

Tyler Durden's picture




 

When China sneezes, the world catches a cold. Alternatively, when China devalues, the rest of the (exporting) world scrambles to not be the last (exporting) nation standing, and to do so next, before everyone else does.

Case in point, at least three major emerging market nations announced they are bracing for currency war.

First India, where NDTV ask rhetorically "How China's Devaluation of Renminbi Impacts India" and answers:

1) The Indian rupee slipped to a two-month low of 64.26 against the US dollar on Tuesday tracking the devaluation of the renminbi. Other currencies such as the Australian dollar and the South Korean won also lost ground.

 

2) The over 0.5 per cent fall in the rupee weighed on traders' sentiments, resulting in a drop in equity markets. Both the BSE Sensex and the Nifty traded with 0.4 per cent losses.

 

3) According to SV Prasad of Chime Consulting, renminbi's devaluation may push the Reserve Bank of India to cut interest rates in India. Lower interest rates will put off foreign investors and will further weaken the rupee, he added.

 

4) However, fund manager Sandip Sabharwal said India should not be too worried about the devaluation in renminbi. "Analysts are out with predictions of how a 1.5 per cent fall of Chinese currency will lead to a sharp increase in dumping etc. However the Indian rupee has also fallen nearly 0.8 per cent in sympathy and is now down 5 per cent over the last one year. It is hard to see a major impact of this on Indian stock markets or the economy unless yuan depreciation becomes a trend which seems unlikely at this stage," he said.

 

5) A fall in the value of the rupee is good for Indian exporters and sectors such as IT and pharma are seen gaining from the depreciation in the rupee. IT stocks were the top performers in stock markets today. However, China-focused Indian companies saw selling pressure because the devaluation of renminbi will make imports costlier in the country. As a result metal stocks saw selling pressure and underperformed broader markets.

Then there is Thailand, where the senior executive vice president of the Stock Exchange of Thailand, Pakorn Peetathawatchai, said that "China is a very important market and a weaker yuan makes our exports there more expensive." He added that weaker yuan also increases travel costs for Chinese tourists.

Well, yes, it's called "war" for a reason.

Finally, there is Russia whose economy is already in a tailspin now that the dead cat bounce in oil has ended, and where moments ago RIA said that the Yuan devaluation puts pressure on RUB, other EM currencies.  Still, the Russian Economy Ministry sees no domestic factors for ruble devaluation, RIA adds even as it admits crude prices to stay under pressure in 2015.

We give Russia, Thailand and India (as well as the rest of the EM countries, actually make that all countries, the US included) at least a few days (hours may suffice) before they all realize that in a beggar-thy-neighbor global currency war, where the ZIRP (or NIRP) liquidity trap is already stalking at least half of the entire world, there really is no choice.

Expect a dramatic surge in interest rate cuts over the next several weeks as the rest of the world realizes this is not some bad dream and responds, and the tit-for-tat FX defection regime (also known elsewhere as "war") goes thermonuclear.

 

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Tue, 08/11/2015 - 11:26 | 6413900 katchum
katchum's picture

The U.S. will prove that a strong currency is a good thing.

Tue, 08/11/2015 - 11:33 | 6413927 BoNeSxxx
BoNeSxxx's picture

Tallest midget bitchez

Tue, 08/11/2015 - 11:34 | 6413929 Headbanger
Headbanger's picture

"We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender"

 

NEVER GIVE UP!  NEVER SURRENDER!

Tue, 08/11/2015 - 11:39 | 6413953 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Fire up the prining presses! We will show them how to win the race to the bottom!!!

Tue, 08/11/2015 - 11:49 | 6414003 HowdyDoody
HowdyDoody's picture

Cease trading in USD ASAP.

Tue, 08/11/2015 - 11:51 | 6414014 MillionDollarBonus_
MillionDollarBonus_'s picture

#Why Gov?

Looking for a career? Why not consider working for the government?

Theresa Philips

Logistics Administrator, Post Office

"What I love about my job is that every day is different. One day I'll be liaising with the drivers to make sure packages are on track to their destinations, and the next day I'll be interacting directly with customers in order to ensure their details are entered correctly into our system. The best part of my job is knowing that I make a real difference to peoples' lives every day."

 

Visit www.accredited-times.com to find out more about employment opportunities in local and Federal government.

Tue, 08/11/2015 - 11:58 | 6414032 Oracle of Kypseli
Oracle of Kypseli's picture

My friend works for .gov and when asked him how he likes it he said that he is lazy and does not really work hard and he will also get great benefits, early retirement and fat pension. he also confided to me that he has been using his .gov CC in strip clubs. Unbeatable

 

Was'nt Teresa Phillips that attempted suicide twice?

Tue, 08/11/2015 - 12:07 | 6414078 Handful of Dust
Handful of Dust's picture

Merika's #1 ... we'll show them!

Tue, 08/11/2015 - 12:18 | 6414117 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Ruh-roh, all those fake-ass plastic Green Shoots are starting to dissolve under the enormous pile of fucking Bullshit.

Tue, 08/11/2015 - 13:46 | 6414611 Santini Air
Santini Air's picture

Keyensian version of "The Biggest Loser"?

Tue, 08/11/2015 - 17:06 | 6415598 J Jason Djfmam
J Jason Djfmam's picture

Kenyansian?

Tue, 08/11/2015 - 18:47 | 6416012 Closet Boy
Closet Boy's picture

"He has been using his .gov CC in strip clubs."

 

Like a sore dick, it can't be beat! Viva Governo!

Tue, 08/11/2015 - 13:08 | 6414405 Steve in Greensboro
Steve in Greensboro's picture

I voted down MDB’s latest extrusion, but he is right. 


If you want your children to have a job from which 1) from which they can never be fired, 2) from which they can retire at 55, 3) in which they will never, ever actually have to work very hard and 4) from which they can extract wages and retirement packages substantially above market rates, tell them to “get a government job” as the admirable John Derbyshire has said.

 

I do not like that MDB is right.

Tue, 08/11/2015 - 17:39 | 6415761 lordkoos
lordkoos's picture

Or they can just inherit money for a living... it works for many.

Tue, 08/11/2015 - 13:23 | 6414515 cheech_wizard
cheech_wizard's picture

I just threw up in my hat.

Tue, 08/11/2015 - 11:55 | 6414026 BaBaBouy
BaBaBouy's picture

Simple Money Class 101... Phys GOLD Up, Sundry Manipulated Digital Paper Fiats Down...

Tue, 08/11/2015 - 20:56 | 6416443 mkkby
mkkby's picture

Stop fucking lying.  Did the USD go down 500% from 1999 to the peak in 2011?  And then up almost 50% to today?  Obviously not.

Nobody really knows what gold is any more.  It hasn't been money since 1971.  Maybe it will be in the next system.  We'll see.  Right now it's just a paper commodity traded by gambling specs.

Tue, 08/11/2015 - 11:49 | 6414006 mtl4
mtl4's picture

This will be all about money flows and confidence, not who can issue the most QE or messing with currency pegs (which are always destined to fail).

Tue, 08/11/2015 - 11:52 | 6414016 Oracle of Kypseli
Oracle of Kypseli's picture

In 1999 Krugman wrote a paper about Japan's liquidity trap then.

Is this what he is preaching now?

http://web.mit.edu/krugman/www/trioshrt.html

Article is too long. here is the concluding part:

The whole subject of the liquidity trap has a sort of Alice-through-the-looking-glass quality. Virtues like saving, or a central bank known to be strongly committed to price stability, become vices; to get out of the trap a country must loosen its belt, persuade its citizens to forget about the future, and convince the private sector that the government and central bank aren’t as serious and austere as they seem.

The strangeness of the situation extends to policy discussion. Because the usual rules do not apply, conventional rules of thumb about policy become hard to justify. We usually imagine that policy is more or less based on conventional models – in particular, that normally policy will be based on the simple, rather dull models in the textbooks rather than exotic stories that might be true but probably aren’t. In the case of the liquidity trap, however, conventional textbook models imply unconventional policy conclusions – for inflation targeting is not an exotic idea but the natural implication of both IS-LM and modern intertemporal models applied to this unusual situation.To defend the conventional policy wisdom one must therefore appeal to various unorthodox models – supply curves that slope down, demand curves that slope up, multiple equilibria, etc.. So unworldly economists become defenders of analytical orthodoxy, while the dignified men in suits become devotees of exotic theories.

What I hope that I have done in this paper is to make clear how conventional the logic behind seemingly radical proposals like inflation targeting really is, and conversely how hard it is to rationalize what still passes for sensible policies among many officials. Let’s see it it works this time around.

Tue, 08/11/2015 - 12:04 | 6414064 messymerry
messymerry's picture

Ella koritsi,

Christ all feakin' mighty.  That guy belongs on Venus in a pantsuit...

;-D

 

Tue, 08/11/2015 - 13:22 | 6414506 teslaberry
teslaberry's picture

it's called war.

 

and everyone's balls to the wall is the strategy. the pawns are there to get killed just as the public is there to have it's money turned into dust via inflation. 

 

it is the nature of money and monetary warfare. money is a weapon wielded by the rulers, but it is held in the hands of the people. the quesiton really is who it is being wielded for and who against. and that IS A REALLY COMPLEX QUESTION. the asnwer is 'it depends'.

Tue, 08/11/2015 - 16:34 | 6415469 caconhma
caconhma's picture

Anyone, without any exception, who ever won a Nobel Prize in economic exclusively funded by the Central Banks, was/is a great theat to Humanity and common people prosperity & freedom.

Tue, 08/11/2015 - 11:55 | 6414028 Theosebes Goodfellow
Theosebes Goodfellow's picture

Whoa there, buckaroos! So everyone knows that China has been cooking the books as far a fair trading rate for the yuan. And now they cook it a little more (1.9%) and the world gets their knickers in a twist?

The Chinese, (like everyone else), is desperate to "re-ignite" they global economy which America has screwed by printing 12 Trillion dollars or so in the last 7 years. Now the Chinese know that a smidge under 2% "fire sale" isn't going to reboot anything, (or at least we'd hope they know that a smidge under 2% fire sale isn't going to reboot anything). I suspect that this is a trial ballon. I bet you that the next devaluation will be more on the order of 5 to 10%. Then you can watch these other countries crap kittens. Go long popcorn.

Tue, 08/11/2015 - 13:35 | 6414556 post turtle saver
post turtle saver's picture

notice that it's all about devaluation against the USD, because the USD to them represents the consumer of last resort...

boy are those fuckers in for a surprise...

Tue, 08/11/2015 - 17:42 | 6415775 lordkoos
lordkoos's picture

The Chinese middle class is the size of the entire American population... the USA is a big market, but it isn't nearly as important as it once was, and it's far from the only place with millions of consumers.

Tue, 08/11/2015 - 14:19 | 6414811 clawsthatscratch
clawsthatscratch's picture

.

Tue, 08/11/2015 - 14:18 | 6414814 clawsthatscratch
clawsthatscratch's picture

Careful Goodfellow, you may have a nailgun accident.

Tue, 08/11/2015 - 12:04 | 6414068 Hans-Zandvliet
Hans-Zandvliet's picture

But, but, but, k,k,k,kaptain, the printing presses are already in overdrive!

Tue, 08/11/2015 - 14:17 | 6414798 cosmyccowboy
cosmyccowboy's picture

Usausausa!!!

Tue, 08/11/2015 - 11:46 | 6413994 DaveyJones
DaveyJones's picture

I can't wait to waterboard someone in our currency war

I love paper mache

Tue, 08/11/2015 - 12:03 | 6414065 clade7
clade7's picture

Torture protocols in a currency war has been already established by the IRS...every small business owner knows this...they stuff rolls of pennies up your ass, then tell you to spit out quarters.

Tue, 08/11/2015 - 12:08 | 6414081 Handful of Dust
Handful of Dust's picture

" My FATCA is bigger then your FATCA! "

Tue, 08/11/2015 - 12:15 | 6414098 DaveyJones
DaveyJones's picture

I prefer the old days

when they used ponies not pennies

to draw and quarter

Tue, 08/11/2015 - 12:55 | 6414313 SilvertonguedAngel
SilvertonguedAngel's picture

All you get is three quarters for two copper penny rolls, 1 quarter for two zinc rolls.

 

Believe me I'm living proof.

Tue, 08/11/2015 - 15:27 | 6415199 I Want to Believe
I Want to Believe's picture

I can't tell if that's a pre-64 silver coin joke or a drug joke.

Tue, 08/11/2015 - 11:48 | 6413999 Oh regional Indian
Oh regional Indian's picture

Whatever meta, super, micro or macro factors might be at play, India de-values ONLY (well mostly) to keep it's fast sliding IT industry alive.

Bangalore would see mass layoffs if Rupee/Thaler came to their true levels....

+ this is just the beginning, only the tip is in so to speak...

BTW the layoffs in the IT sector move apace inspite of the pathetic Rupee....

Tue, 08/11/2015 - 12:06 | 6414074 Lester
Lester's picture

Except Churchill is reported to have further stated to an aide, "But I don't know what we will fight them with...."

The Brits then appealed to US sportsmen for their personal firearms which were "loaned" to Brittain.  At the end of WWII, the Brits dumped the rifles Americans "loaned" them into the sea...

Remember reading all about this episode and the famous speech in The American Rifleman when I was a kid.  First of life's many lessons confirming Never Trust A Brit...

Tue, 08/11/2015 - 12:21 | 6414145 Consuelo
Consuelo's picture

As exemplified quite robustly today in Cameron's island in a silver sea, the Brits have a penchant for Tyranny... 

Tue, 08/11/2015 - 12:21 | 6414148 clade7
clade7's picture

I can imagine the poor limey pisser on the front line who got issued a homemade flintlock wondering WTH?... 

Tue, 08/11/2015 - 12:22 | 6414157 BigRedRider
BigRedRider's picture

 

 

During WW2, the British complained that U.S. troops were overpaid, oversexed, and over here.  The Americans retorted by saying that the British were underpaid, undersexed, and under Eisenhower.

Tue, 08/11/2015 - 13:40 | 6414583 Abitdodgie
Abitdodgie's picture

Churchill was a pice of shit just like the rest of them, funny how he was not doing the dieing.

Tue, 08/11/2015 - 14:12 | 6414770 Farqued Up
Farqued Up's picture

But.....what if your wife is a bull dyke should you quit? Or lemonade from a lemon, and push for a manage a trois?

Tue, 08/11/2015 - 16:27 | 6415449 caconhma
caconhma's picture

You are all fucked up: never compare W. Churchill with a community organizer Obama. The Kenyan president is only good in destroying whatever still left from rich and prosperous America.

Tue, 08/11/2015 - 13:15 | 6414452 rogerrabbithole
rogerrabbithole's picture

Doubt it.

Tue, 08/11/2015 - 14:09 | 6414751 RockySpears
RockySpears's picture

To whom might they prove it?

 

Which strong currency were you thinking of?

 

Just curious.

Tue, 08/11/2015 - 14:10 | 6414752 RockySpears
RockySpears's picture

double entry

Tue, 08/11/2015 - 11:26 | 6413901 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

KING DOLLAR!!  We're #1.! We're#1,! We're #------ awww fuck it.

Tue, 08/11/2015 - 11:28 | 6413906 Dr. Engali
Dr. Engali's picture

This global eCONomy is on fire. Better raise rates and slow this steaming pile of shit down.

Tue, 08/11/2015 - 11:28 | 6413910 JustObserving
JustObserving's picture

Chinese, Indians, Russians and Thai are major buyers of gold.  Time for them to load up before the devaluations become a torrent.

How will this currency war end?  With trade wars? With a real war? Or about $10 trillion in new QE?

Tue, 08/11/2015 - 11:34 | 6413934 BoNeSxxx
BoNeSxxx's picture

I'll take 'all the above' for $1,000 Alex

Tue, 08/11/2015 - 12:20 | 6414129 DaveyJones
DaveyJones's picture

and it's our first daily bubble

how much are you willing to wager?

your pension, your dog, your mother in law?

 

Tue, 08/11/2015 - 12:47 | 6414279 BarkingCat
BarkingCat's picture

I will wager my mother in law as well as your mother in law. You don't mind, do you?

Tue, 08/11/2015 - 12:59 | 6414346 SilvertonguedAngel
SilvertonguedAngel's picture

All I have is this wheel barrow full of fiat, I'll wager it all Alex...

Tue, 08/11/2015 - 12:23 | 6414159 Consuelo
Consuelo's picture

 

It will end in full scale war, no doubt about it.   But first...   Competitive devaluation, then trade war, then 'gold', then a few 'Gulf-of-Tonkin' incidents, then the mitts come off...

 

 

Tue, 08/11/2015 - 11:29 | 6413913 alphacoa
alphacoa's picture

what interest rate cuts....where are there any interest rates left...we need to set rates artifically low so the precious banks will lend money to imperiled businesses!

...Yea right

Tue, 08/11/2015 - 11:29 | 6413915 Kaiser Sousa
Kaiser Sousa's picture

behold the desperate attempt to hold the phony paper price Gold and Silver dams today in all their glory...

if u havent stacked the time to do so is rapidly closing...

there r only 2 forms of real money - GOLD & SILVER...

DEATH TO THE MONEYCHANGERS.

Tue, 08/11/2015 - 11:50 | 6414008 Winston Churchill
Winston Churchill's picture

I just wish I could find mine.Lost it in a tragic horticultural accident.

Tue, 08/11/2015 - 12:37 | 6414219 SoilMyselfRotten
SoilMyselfRotten's picture

Couldn't make her drink huh, pity

Tue, 08/11/2015 - 11:52 | 6414018 general ambivalent
general ambivalent's picture

I would count weapons, survival skills and tools, water, the ability to acquire and grow food etc. as even more important.

Tue, 08/11/2015 - 12:16 | 6414101 Taffy Lewis
Taffy Lewis's picture

I know you are correct Kaiser and that I should buy some gold NOW but I keep glancing over to my pile of $32/oz silver sitting in the closet.

Tue, 08/11/2015 - 12:48 | 6414287 Tortfeasor
Tortfeasor's picture

Quit pricing your silver in a dying currency. I just look and see X silver eagles, XX silver rounds, etc. 

Tue, 08/11/2015 - 14:29 | 6414909 rejected
rejected's picture

Have you seen your dollar buy more at the supermarket,,, Has Walmart products (Chinese) gotten any cheaper? Has any of the world banks sold their PMs? Only ones stupid enough appears to be the UK a few years ago. Took a hell of a loss.

Man don't believe those numbers the banks and government are pushing. They've got it cheap so they can get more for less by convincing everyone it's worthless.

If something is truly worthless you don't have to keep saying it day after day.

Tue, 08/11/2015 - 11:31 | 6413921 Rodders75
Rodders75's picture

I used to regularly write "BTFD" after this type of post given the Zero Hedge record in calling 10 out of the last 3 bear markets. Now I'm not so sure...

Tue, 08/11/2015 - 11:34 | 6413932 Latitude25
Latitude25's picture

Sure the FED will raise rates and the rest of the US population still working will give up and get EBT cards.  The FED IS the eCONomy now so don't fight the FED.

Tue, 08/11/2015 - 11:44 | 6413967 Bioscale
Bioscale's picture

It's pretty clear that when FED raises the rates the population will finally live from the interest earned for savings. Wait, savings.... hm, I haven't seen this word in the news for ... 10 years maybe.

Tue, 08/11/2015 - 11:35 | 6413937 q99x2
q99x2's picture

Bitcoin $267

Tue, 08/11/2015 - 12:38 | 6414234 Pullmyfinger
Pullmyfinger's picture

A 'currency war' at this juncture signifies the death knell for unbacked paper currencies of all kinds, because the initial reasons for an official currency devaluation never go away and the process necessarily accelerates towards a breaking point.

So what will your bitcoins be "worth" when all fiat goes to zero and all international trade ceases except when backed by an exchange of physical products. 

Naturally, it's obvious that you don't understand this in the first place, so if I was actually talking to you --which I'm not-- then the electronic digits that I wrote this with would be utterly worthless. Much like bitcoin: a fiat derivative.

 

Tue, 08/11/2015 - 11:38 | 6413948 FrankieGoesToHo...
FrankieGoesToHollywood's picture

Note to self:  Start saving money to buy Brazilian property after the real dies.

Tue, 08/11/2015 - 11:39 | 6413949 Panic Mode
Panic Mode's picture

Twinflation - Deflation on your wages, Inflation on your food, housing and utility bills.

Tue, 08/11/2015 - 11:46 | 6413950 e_goldstein
e_goldstein's picture

 Galapagos, bitchez.

http://www.enotes.com/topics/galapagos

 

 

Tue, 08/11/2015 - 11:39 | 6413952 Michigander
Michigander's picture

The shmexperts dont know a fucking thing. I've always worried about being all in in USD. Porter Stanseberry and Doug Casey said " BUY AUD and CAD. I did, and got hosed. Even now Casey says to use these as "opportunities" to get out of the USD. The USD is the cleanest tampon in the fucking disposal box anad I am done diversifying into anything other than bullion.

Tue, 08/11/2015 - 12:12 | 6414091 38BWD22
38BWD22's picture

 

 

Yes.  All of those pushing China, Russia, etc. are getting themselves (or their customers) hosed.

BRICS, lololol...

Gold has been down too though, but I would much rather have gold than BRICS fiat.

Tue, 08/11/2015 - 12:12 | 6414093 greatbeard
greatbeard's picture

>> BUY AUD and CAD. I did, and got hosed.

That's about the only mistake I didn't make. I looked closely at some CAD but my reluctance to diversify out of what I was in saved my ass, in a way.  What I'm in, wink win, nod nod, has gotten the shit kicked out of it also.

>> I am done diversifying into anything other than bullion.

Here hoping your are correct in this call.  I'm tired of being a squashed bug.

Tue, 08/11/2015 - 12:25 | 6414170 lakecity55
lakecity55's picture

Well, hell, I bought yuan and rubles...guess I'll have to wait a while...

Tue, 08/11/2015 - 12:18 | 6414118 TheFutureReset
TheFutureReset's picture

The "shmexperts" preach diversification, saying there are "opportunities" in foreign stock markets, but to 'stay away from US stocks'. They've fallen victim to the very diversification myth we've been sold by TPTB for decades. TPTB created this mantra bc they don't want muppets to form large positions in actual savings vehicles, gold and silver (and now perhaps bitcoin). The myth is so strong that the "shmexperts" even promoted it for them. 

The problem is systemic risk of the global economy. A massive collapse will happen "soon", there is no need to be diversified in fiat denominated assets. When the dust settles, the only diversification that will matter is between Eagles, kruggerands, philharmonics, rounds.

Tue, 08/11/2015 - 13:05 | 6414390 BarkingCat
BarkingCat's picture

I went into AUD in 2008 but sold out a couple of years later when it started to go down. It was a good move then.
I don't claim anything but dumb luck in that trade.
I was looking for yield and the USD was still heading into the crapper.
At this point in time I would not touch either currency.
Both of those countries are nothing but USA's bitches, so if you invest then invest in the Alpha and not a quivering lackey.

Tue, 08/11/2015 - 11:45 | 6413973 carbonmutant
carbonmutant's picture

From a country with Reserve Currency fantasies....

Tue, 08/11/2015 - 11:47 | 6413997 general ambivalent
general ambivalent's picture

Bullish for bear spray.

Tue, 08/11/2015 - 11:50 | 6414012 thunderchief
thunderchief's picture

Fiat is done, now it is a race to the bottom.

Buy all the physical , allocated gold, silver, platinum,  and palladium can.

Tue, 08/11/2015 - 11:59 | 6414047 ramgold2206
ramgold2206's picture

EXACTLY!! what thunderchief says... it matters not where you get your physical at this stage, get your hands on it asap from wherever you can... then ext 6 months are going to be crucial

 

if your unsure about karatbars contact me directly and i'll talk you thru the system... and reassure your concerns...

if you have little capital to convert to gold,,, use the affiliate system to earn commissions and get your AU that way... it works...im doing it.. you can do it to.. dont be left behind ... you have all the tools you need

 

 

www.teamramgold.com

Tue, 08/11/2015 - 14:20 | 6414827 RockySpears
RockySpears's picture

If I am not mistaken, a little while ago (OK, decades) did the US Govnt not require the turning in of ALL gold?

 

Executive Order 6102,   so how do you trade in illegal metals? 

 

They done it once ......

Tue, 08/11/2015 - 12:22 | 6414151 lasvegaspersona
lasvegaspersona's picture

I'd be pretty careful with that 'allocated'. If there is a collapse you may be bought for cash out for the low gold price that will occur right before said collapse.

I'd stick with physical....in your possession

Tue, 08/11/2015 - 11:58 | 6414042 Dawgeatdog
Dawgeatdog's picture

Russia entering a currency war? LOL  What do they have to gain?  They export commodities and arms.  They don't manufacture anything else anyone wants, at any price.   No real need to lower the Ruble for that. 

Tue, 08/11/2015 - 12:20 | 6414134 sagitarius
sagitarius's picture

They export crops.

They export hitech (e.g. there is a SW, which has no pair in the world)

They export titanium alloy products, veryvery high tech.

Tue, 08/11/2015 - 13:02 | 6414355 RaceToTheBottom
RaceToTheBottom's picture

I am going to IPO a company that will sell Russian designed Titanium Road bicycles.

  • physics, check
  • titanium, check
  • custom software for personalized engineering, check
  • use world class components where you find them.  people choose via sw

Just need to get the fat assed banksters to buy them cause no one else will have the money.

Maybe fat assed Kardashian can model them?

 

Tue, 08/11/2015 - 12:35 | 6414213 TheFutureReset
TheFutureReset's picture

It might be the terminology that is unclear. I've never really liked the term "currency war". Wars are usually named for their participants, not the weapons used. Calling it a currency war makes the blame of the destruction it causes harder to pin down. I'd call it a Central Bank War or World Banking War or even The War of World Elites. If you rename it, it's more clear why Russia is involved I think. 

Tue, 08/11/2015 - 15:31 | 6415225 Amish Hacker
Amish Hacker's picture

Historically: Currency war----> trade war---> war war

Whatever you want to call it, China's devaluation was the moment when the Nash Equilibrium failed. Now the only smart move for other countries is to move as quickly as possible. He who panics first, panics best.

 

Tue, 08/11/2015 - 13:05 | 6414387 YMHC
Tue, 08/11/2015 - 14:18 | 6414810 rejected
rejected's picture

Didn't look at the replies,,, apologies for plagiarizing.

Tue, 08/11/2015 - 14:16 | 6414797 rejected
rejected's picture

Where do you think those usa rockets with their pretty red glare get there engines from?

Tue, 08/11/2015 - 17:09 | 6415623 J Jason Djfmam
J Jason Djfmam's picture

We'll just have to nuke the "bad" parts of Russia.

Tue, 08/11/2015 - 11:58 | 6414044 dontgoforit
dontgoforit's picture

This means nothing.  And certainly not currency war. 

Tue, 08/11/2015 - 12:44 | 6414264 sandhillexit
sandhillexit's picture

not nothing, DGFI.  The rate between CNY and USD was negotiated, (by Timmy I think) in order to anchor everything else in Asia, because the CNY/USD rate is the most important point of reference for every other manufacturing country, as others have noted.  This seems to be an "FU" to Lew and the Obama Treasury.  

Possibly they "cleared it" which might explain the physical deliveries that GS and JPM were taking this week ahead of the news.  I wondered the other day why the the only green in the DOW was JPM, GS and V.  

IF this wasn't pre-cleared we will know soon enough. 

Tue, 08/11/2015 - 12:01 | 6414055 GMadScientist
GMadScientist's picture

How long between currency wars and the shooting kind?

Tue, 08/11/2015 - 13:56 | 6414673 lakecity55
lakecity55's picture

Depends on how long 1 side gets orders to prepare an order of battle and then attack.

Tue, 08/11/2015 - 12:16 | 6414073 clade7
clade7's picture

at least the Peso is holding...so theres that...might just be nap time in the watermelon patch.?  'Manana' is a good concept i could really get behind though...why do today what you might do tomorrow?.

In fact, I dont think I've ever seen a Mexican panic about anything?  Such a relaxed a peaceful breed....good intro to a joke though..."how do you make a Mexican panic"?

 

Tue, 08/11/2015 - 12:23 | 6414158 lakecity55
lakecity55's picture

Walk into an ER wearing an INS hat.

Tue, 08/11/2015 - 12:33 | 6414204 clade7
clade7's picture

Nope! That just results in a free bus ride to visit the family and a meal, plus, not paying to park at the hospital..this is a tough one granted..

Tue, 08/11/2015 - 13:54 | 6414665 lakecity55
lakecity55's picture

Well, a few years ago I broke my foot. Now, I have worked for 10-12 agencies; I wore and INS hat in and the place cleared out. I guess times they are a-changing.

"Send me your masses yearning to rob, kill, and rape!"
__BHB.

Tue, 08/11/2015 - 13:02 | 6414371 Kprime
Kprime's picture

why pay today when you can put it off on your grandkids

Tue, 08/11/2015 - 14:05 | 6414730 rejected
rejected's picture

The baby's coming out and the border is still two miles away...

Tue, 08/11/2015 - 12:11 | 6414079 falak pema
falak pema's picture

In the growing EM vortex, we enter the deflationary scenario of the 1930s.

The DC markets under the joint umbrella of the Reserve and Euro feel they can drain all the accumulated wealth generated in the past 30 years of financialization cum subsequent outsourced globalization; thanks to the Oligarchy construct of the Reaganomics legacy; BACK to the hub of the system, aka the Trilateral.

That is EXACtly what the TAFTA and Transpacific alliances are supposed to put in place : global alliances that perpetuate the hold of US Oligarchy and the Reserve.

Only problem : China and Russia are dead opposed to this hegemonial alliance as is Iran. 

So the currency wars now intensify to up the ante and suck the rest of the world into the deflationary spiral that will further pauperise the EMs. 

This is now looking very 1930s ISH...

Tue, 08/11/2015 - 12:20 | 6414138 lakecity55
lakecity55's picture

Of course you know, this means war.

Tue, 08/11/2015 - 14:46 | 6414994 Batman11
Batman11's picture

After the fall of the Berlin Wall the robber barons came out to play to re-create their glory days of the 1920s.

1920s/2000s - high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), globalisation phase

1929/2008 - Wall Street crash

1930s/2010s - Global recession, currency wars, rising nationalism and extremism

1940s/? - Global war

Tue, 08/11/2015 - 15:09 | 6415108 GMadScientist
GMadScientist's picture

All we're missing now is some really ill-advised tariffs.

Tue, 08/11/2015 - 12:18 | 6414122 lasvegaspersona
lasvegaspersona's picture

Weak currency should be due to a negative balance of trade and not a goal. Every thing is backwards and not functional in our insane monetary system.

Jacques Rueff saw this years ago and said some day the wolrd would view it with astonishment.

That day has come.

Tue, 08/11/2015 - 12:39 | 6414237 One World Mafia
One World Mafia's picture

Finally someone got it.  China could depeg, let the yuan float and enjoy the benefits of a strong currency. 

Tue, 08/11/2015 - 12:20 | 6414132 not a yahoo
not a yahoo's picture

Hey Tylers, could you please clean up the malware ads on this site? On android, about 40% of the time, your site jumps to some random fake content on initial loading.

Tue, 08/11/2015 - 14:25 | 6414873 RockySpears
RockySpears's picture

Oh for goodness sake

 

https://adblockplus.org/android-install

 

Now stop already.

Tue, 08/11/2015 - 14:30 | 6414920 Superdave532
Superdave532's picture

Was starting to think it was just me - all for them making money, but I routinely get bumped to other pages and pressing back button takes me to home page rather than article (samsung galaxy here) 

Tue, 08/11/2015 - 12:24 | 6414164 ajkreider
ajkreider's picture

The days of the dollar's status as a reserve currency are numbered!

Oh, wait . . . .

Tue, 08/11/2015 - 12:30 | 6414191 Herdee
Herdee's picture

Just supply the American consumer with endless cheap crap and trinkets.Is that what it's all about,consumerism?I'm not buying crap just because I want it.Wake up people.

Tue, 08/11/2015 - 12:31 | 6414193 Shibumi2
Shibumi2's picture

Nothing will ever collapse.

 

Slow burn, baby

Tue, 08/11/2015 - 12:31 | 6414197 TiggrAndrews
TiggrAndrews's picture

China is doing what the Greece should have done, but is prevented from doing as an EU member.  You don't have to be rocket scientist to realize when oil prices tanked last fall, that 2014 was a good year to invest in US stocks and currency and those international investors that did have earned upwards of 40% returns.  Some believe the US is a major oil power, but it has no oil exports - thus a US investment is smart play when oil is declining.  I originally looked upon it as a 4-5 year shift, predicting oil returning to $80 to $100 levels by 2018-2020.  However, China's devaluation is a smart proactive play on the part of China.  The US, like China, should be looking to devalue its currency, not sustain it ... otherwise, a major US recession is imminent.  Today, US real estate and stock prices are rich for international investors and US dividends payouts, buybacks and the like are not sustainable for companies focused on US domestic markets.  The US is dancing a dangerous financial play which is temporarily crushing other economies, but that play will backfire.  This may be the time to divest in US stocks and invest in China or elsewhere.

Tue, 08/11/2015 - 12:34 | 6414212 gcjohns1971
gcjohns1971's picture

The relevant facts are these:

1)  Debt cannot be retired without a collapse of the previous 100 years of credit expansion...because retiring debt destroys the currency whose creation it was used to secure, resulting in too little currency existing to pay current debts.  This is why the National Debt cannot shrink, and always, always grows.  Which leads to the fact that...

2) The accumulated interest portion of the national debt is eternally growing as a percentage of the total debt.  This correlates to...

3) The principal portion of the national debt is eternally shrinking as a percentage of the total debt.  Which means...

4) The growth in the real economy reflected in that principal is progressively less able to service the ever-larger interest portion of the debt.   And it is simultaneously being hindered by...

5) The systematic redirection of investment funds from projects that create value in real terms to projects that please Central Bank cronies...which results in progressively less real production.

 

Shortly,

The economy is starving for air.

The fundamental design of the fiat-currency system is the cause of the starvation.

While that currency-central-bank system continues, the economy cannot improve, and can only appear to improve relative to other places, and/or by international aggression leading to the import of stolen loot.

 

Devaluing only redistributes wealth amongst those who already hold the currency.   The apparent effect on the economy transmitted through 'exports' only lasts until the resulting raised prices (in local currency terms) reach the factors of production used by the exporters...then the apparent gains are reversed.

This EXPORT-WORSHIP is called 'Mercantilism'.   It was debunked as a source of real wealth CENTURIES AGO. (Literally)

People don't change...and except when they submit to rigorous procedures for objective verification, they DON'T EVEN LEARN.

Tue, 08/11/2015 - 13:50 | 6414631 silverer
silverer's picture

Good post, and I'll add the "objective verification" usually ruffles feathers of somebody, so they kind of "back off a bit".  Human nature, eh?

Tue, 08/11/2015 - 12:38 | 6414231 FranSix
FranSix's picture

Part of the devaluation competition will probably involve removing import tariffs on bullion, unrefined doré, and concentrates. Or perhaps QE involving more central banks buying gold.

Tue, 08/11/2015 - 12:46 | 6414274 juicy_bananas
juicy_bananas's picture

Set the printing presses to ludicrous speed. . .

Tue, 08/11/2015 - 13:48 | 6414619 silverer
silverer's picture

Nitrogen cooled ink...

Tue, 08/11/2015 - 14:05 | 6414725 KingTut
KingTut's picture

The best thing about paper money is you can just add a zero to the denomination and run the press at the same speed.  Then next week you can add another zero ...

Tue, 08/11/2015 - 16:32 | 6415464 flyingcaveman
flyingcaveman's picture

Even then, You'll  they'll eventually run out of room to put the extra zeros.  Just ask any Zimbabwean.

Tue, 08/11/2015 - 12:57 | 6414278 earleflorida
earleflorida's picture

                                                                                                                                       

 ,the ,theband[aid][?], that lost a[we]ll,...elasticity-- REALLY?!?

by "CHAN AKYA     8/11/15 @                      http://atimes.com/2015/08/china-yuan-devaluation-let-he-who-hasnt-sinned/

* without a doubt one of the bestest wroten'd articulates i'd ever, everever r'ed!?!

fasinating journalism

"China Yuan devaluation: Let he who hasn't sinned..."'

Tue, 08/11/2015 - 12:50 | 6414286 Son of Captain Nemo
Son of Captain Nemo's picture

Expect a dramatic surge in interest rate cuts over the next several weeks as the rest of the world realizes this is not some bad dream and responds, and the tit-for-tat FX defection regime (also known elsewhere as "war") goes thermonuclear....

Everybody here that reads ZH knew this day was coming 7 years ago...

Pay extra close attention to the very last sentence in this read for clues at what happens when "everyone" loses everything and have nothing else to lose when they lose it!!!..

Especially the ones that are the most predictable at the top of the "food chain"!

Who needs or wants bunker when you know and understand what is coming next?!!!

Tue, 08/11/2015 - 13:21 | 6414493 large_wooden_badger
large_wooden_badger's picture

Going long all-terrain Winnebagos with mounted 50 caliber "sport hunting" guns

Tue, 08/11/2015 - 13:40 | 6414585 nah
nah's picture

Russia veto @ UN wins cold war.

Tue, 08/11/2015 - 13:44 | 6414600 ncdirtdigger
ncdirtdigger's picture

What does this mean for the price of my new iThingy?

Tue, 08/11/2015 - 13:47 | 6414615 silverer
silverer's picture

It always goes up.  No matter what.

Tue, 08/11/2015 - 15:22 | 6415164 TalkToLind
TalkToLind's picture

And the quality goes down.

Tue, 08/11/2015 - 14:12 | 6414767 Jack Burton
Jack Burton's picture

"Dollar Hegemony" in the lynchpin of American world domination. In so many ways, the need for nations to earn and hold vast dollar reserves enables the USA to do a major money printing exercise without seeing any inflation or negative feedback loops. How can that be? Dollar Hegemony is clearly one of the worlds greatest and most clever Imperial Plans. The real problems that should plauge the US fiscal state are printed away and foreign nations who buy up or earn their dollars are, in fact, having the US problems exported to them.

It can not escape victims forever that the Dollar System is a free ride for the USA, and a heavy burden for those forced to get dollar to do trade. The open US move to take down states, especially Russia and Iran, using Dollar Power and Trade Sanctions enpowered by the Dollar Hegemony, has woken these states up to the need to get out from under the Dollar System.

China is also in this boat, but they hold so many trillions of dollar reserves, that they can only move at a snails pace to get out from under. Russia on the other hand has not so big a dollar surplus, they are going to gold and a currency basket to lesson Dollar Hegemony over them.

I have never heard anyone argue that the US Imperial Power can exist outside Dollar Hegemoney. If the reserve currency is no longer Americas prerogative then money printing will boomerang back in our faces. Till then, the US Power will rule, and all others will have to eat the losses Dollar Printing generate.

Tue, 08/11/2015 - 14:26 | 6414890 kanobi
kanobi's picture

Impose a corresponding customs duty on their products plus a punishment premium. That should teach them to eat their own porridge they cooked for themselves instead of dipping into somebody elses lunch. And they wanted this to be a reserve currency!

Tue, 08/11/2015 - 14:38 | 6414952 fromthinair
fromthinair's picture

The news in inline with the way these currencies have been shaping up. lets see what happens.

Tue, 08/11/2015 - 14:46 | 6414996 rsnoble
rsnoble's picture

Kick Ass!

Tue, 08/11/2015 - 15:50 | 6415287 Inthemix96
Inthemix96's picture

And this is not a drill either.  Just a few days ago I posted about an old man who I consider as my own Grandfather, cos' thats just the way he has behaved towards me for the some twenty years I have known him and his wife, just doing my job, to the best mixy can.

The question he asked me was asked today by a very good friend of mine, and neither of these people could ever have known, or come across each other, and one is 86, the other is 46.

My younger friend asked nearly to the same words, 'What will happen when the fuckers we pay to protect us, but dont, cant protect their own'?  He even asked if they would go to work in the following insurrection, come inflammation, riots.

And just as my much loved older friend asked, I asked, 'Would You'?

Would you my friends?

Keep fucking going you mother fucking cunts.

This is 'Not', a 'Drill'.

;-)

Tue, 08/11/2015 - 16:26 | 6415445 flyingcaveman
flyingcaveman's picture

Switserland, HongKong, Iran, Tiawan. and Austria are going to join the BRICS forming the SHITABRICS currency.

Tue, 08/11/2015 - 17:10 | 6415625 erk
erk's picture

Russian economy in a tailspin, where do they find these crap posters? Countries that run a trade surplus are hardly in a tailspin.

Tue, 08/11/2015 - 17:49 | 6415808 dsty
dsty's picture

I wonder what they are about to do in the Pentagon economic war room?

China is gonna be mad.

push push push

fight

September?

Tue, 08/11/2015 - 18:07 | 6415877 Miketheterrible
Miketheterrible's picture

Everyone seems to be screwed.  Currencies of not just eastern countries but even western countries getting hit (CAD, AUD as examples), I am starting to think that more and more countries are going to find that a so called "world trade" wont work for them and move to an Autarky system.

Tue, 08/11/2015 - 18:17 | 6415922 fowlerja
fowlerja's picture

Good grief...it is only paper...suppose some country wants to give me more of their currency for my dollar...sems like a good deal to me.

Tue, 08/11/2015 - 19:05 | 6416065 Raul44
Raul44's picture

This could be that "excuse" catalyst FED needed to launch QE4 me wonder. 

Tue, 08/11/2015 - 20:48 | 6416412 HYMN
HYMN's picture

China is devaluing, it's killing the EMs ! America is proping up the dollar, making it stronger, it's killing the EMs ! Pick your poision. This messes up all Janets messed up arrangements. Might just be all about China refusing to be under Uncle Sammys thumb.

Wed, 08/12/2015 - 00:14 | 6417123 DaveA
DaveA's picture

Indians, Turks, and Vietnamese have long since stopped regarding their national currency as either a unit of account or a store of value. Paper is only a medium of exchange; you hold enough paper money for next week's purchases, and keep the rest of your savings in gold. Governments sometimes try to ban gold, but this only kills the supply of high-value goods, as no one wants to trade a car or apartment for a huge pile of paper money.

Once the private sector has made this transition, currency devaluation is nothing more than an automatic, across-the-board pay cut for the whole public sector, which does in fact make a nation more competitive, as long as police and soldiers don't get pissed off and start rioting.

Wed, 08/12/2015 - 01:14 | 6417226 onmail
onmail's picture

Delink from Dollar NOW

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