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Presenting Never-Ending QE In One Easy Flowchart
In case you haven’t noticed, the world’s central banks are locked in an epic race to the devaluation bottom in desperate pursuit of a post-crisis economic recovery that never came despite trillions in worldwide QE and on August 11, in the currency war equivalent of the United States entering World War II, China devalued the yuan, serving notice that, to quote Xi Jinping, "the lion has woken up."
China’s move has sent shockwaves through the emerging market world and caused the Fed to reconsider the timing of the ever elusive "liftoff" and now, with the sputtering engine of global growth and trade set to export its deflation across the globe, countries like India and South Korea must decide how to respond.
Because we know the mechanics of the currency war and the endless loop of competitive easing can be a bit confusing at times, we present the following simplified, circular flow chart from Morgan Stanley which should serve as a helpful guide to the never ending "beggar thy neighbor" loop.
From MS:
At the beginning of the game, the global economy is at an arbitrary point of equilibrium, similar to a chess board, with the pieces representing policy tools that are used to achieve one’s goal—growth and inflation—the king. Once a central bank makes an initial move to achieve a new equilibrium, it sets in motion a sequence of moves from other central banks, which we refer to as the opening repertoire. Suddenly, the game becomes unbalanced and requires more policy changes until a new equilibrium is achieved.
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I have the feeling they are going to go up my FAFSA.
Unfortunately, it's not "beggar thy neighbor"...
But... "bugger thy neighbor!"
It's not really an endless loop as depicted in this article. It's really a long chain. And at the end of the chain is a clasp bound tight around your ankle.
That's the old beggar thy neighbor round robin competitive devaluations from back in the European '60's. Exactamundo.
Never did squalooch for economic activity because everybody just kept devaluing off one another all the time.
T'was stoooopid.
Krugman's peeing his panties
It isn't beggar thy neighbor as the people creating counterfeit currency and thus devaluing honest currency are Globalists that have no nation and thus no neighbor.
It's beggar all those in all nations who are prohibited from counterfeiting as the Globalist allow themselves.
The Private Central Banks 'buy' Government Bonds to mask their thefts from the productive classes with two lies: that they purchase domestic host Bonds 'to facilitate business lending and counter-cylical govenment spending', and foreign Bonds 'to balance trade flows and international payments clearances'.
The point is to slowly exchange counterfeit currency for real assets via the purchase and re-hypothecation of Government Bonds both domestic and foreign.
Classic circle jerk
How about letting main street have some of it this time around?
How about lining/queing up for the cattle cars on the way to the gas chambers, firing squads, and 24/7 videos in a small room of Kim Kardasian and Niki Minaj's ever-expanding prodigiously colossal a$$es and flash images of Caitly Jenner's cleavage and faux furtive glances for the camera.
"How about lining/queing up for the cattle cars on the way to the gas chambers, firing squads..." --newnormaleconomic
Not funny or sharp or remotely relevant to the currency wars, but way to keep the Holocaust alive. Now, how many died in those gas chambers again? I can't ever remember the number...
FYI - 6 MILLION!!!!!!!!!!!!111oneoneoneoneoneeleven
Another money pump tautology.
Now draw up a new version of that chart with 150 countries and 150 central banks and you'll get a good idea of the level of clusterfuck that's going on.
One World Central Bank should fix it. The mother of all CENTRAL planning. Now who should run it Krugman, Merkel, Obama, Putin, Xi Jinping, Perng Fai-nan, Wolfgang Schäuble, or Richard Koo?
Kanye west.