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World on threshold of currency wars and creation of a new currency

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  • #16
    It's not so much the warning of currency wars that caught my attention in the following article, but the reference to a term I haven't read outside of a blog, at least I haven't seen it used in the media.

    That being "QE infinity".

    Now what are the likely outcomes from such a policy? The article doesn't mention, only to say it generates uncertainties. Seriously the ultimate end-game to all this printing can only spell disaster. One that hopefully occur after the rapture if not only very shortly prior.

    China’s Yi Warns on Currency Wars as Yuan in ‘Equilibrium’

    By Jeff Black & Zoe Schneeweis
    Jan 27, 2013 10:07 AM ET

    QE Infinite

    Yi, who also heads the State Administration of Foreign Exchange, said he’s concerned about the potential fallout from quantitative easing in the world’s advanced economies.

    “Quantitative easing for developed economies is generating uncertainties,” he told reporters in Davos.

    The foreign-exchange regulator has renewed concerns that China will see fresh speculative inflows of money after the U.S. and Japanese central banks said they would pump more funds into their financial systems.

    “The policies in major economies of monetary easing and low interest rates will boost global liquidity, increase risk preferences in the market and drive speculative funds into China,” SAFE said in a statement on its website on Jan. 25.

    Speaking in Beijing, Lou Jiwei, head of the country’s sovereign wealth fund, said he expects loose monetary policies to continue.

    “When everybody talks about whether the U.S. will have a QE4, I say no,” Lou, chairman of China Investment Corp., said at a forum. “The feature in the future is called QE infinite. Global central banks will adopt an infinite QE policy.”

    Luke 21:28

    "Now when these things begin to happen, look up and lift up your heads, because your redemption draws near"


    • #17
      This currency intervention from Venezuela is being described by one popular blog as lobbing a nuclear bomb into the currency war.

      Got to say, this currency devaluation exercise is quite impressive.....

      Venezuela Devalues Bolivar by 32% Amid Shortage of Dollars
      By Charlie Devereux and Jose Orozco
      February 08, 2013 4:34 PM EST

      Venezuela devalued its currency for the fifth time in nine years as ailing President Hugo Chavez seeks to narrow a widening fiscal gap and reduce a shortage of dollars in the economy.

      The government will weaken the exchange rate by 32 percent to 6.3 bolivars per dollar, Finance Minister Jorge Giordani told reporters today in Caracas. Companies with operations in Venezuela, including Colgate-Palmolive Co., Avon Products Inc. and MercadoLibre Inc., fell on the announcement.

      A spending spree that almost tripled the fiscal deficit last year helped Chavez, 58, win a third six-term term. The devaluation can help narrow the budget deficit by increasing the amount of bolivars the government receives from oil exports. Chavez ordered the move from Cuba, where he is recovering from a fourth cancer surgery, Giordani said.

      “Any tackling of the massive economic distortions, even if far more is required, is positively viewed by markets,” Kathryn Rooney Vera, a strategist at Bulltick Capital Markets, said in an interview from Miami. “We expected more and more is indeed needed to correct fiscal imbalances and adjust economic distortions, but this is something and there may be more to come.”
      The new exchange rate will begin operating Feb. 13, central bank President Nelson Merentes said.

      Luke 21:28

      "Now when these things begin to happen, look up and lift up your heads, because your redemption draws near"


      • #18
        Global currency war could get nastier, warns Brazil's Mantega
        By Alonso Soto and Luciana Otoni
        BRASILIA | Fri Feb 8, 2013 10:13am EST

        The global "currency war" could get even worse if Europe joins the fray, says the man widely credited with coining the term.

        Brazilian Finance Minister Guido Mantega told Reuters European countries should focus on reviving their economies with more investments, rather than trying to weaken the euro to protects jobs as France has suggested ahead of next week's meeting of G20 economic powers.

        "We will continue to have this currency problem unless the global economy takes off," Mantega said in an interview late Thursday. "The solution here is to make their economies more dynamic and jolt them out of stagnation."

        More than two years ago Mantega used the term "currency wars" to describe the series of competitive devaluations adopted by rich nations to bolster their exports amid the global slowdown to the detriment of emerging market nations.

        Since then Brazil has actively sought to depreciate its currency, the real, to protect local manufacturers of everything from shoes to suits and make its exports more competitive. It has taken bold action to curb speculative capital inflows with higher taxes.

        Mantega said that approach was not right for everyone - specially for heavily industrialized nations.

        "It is useless for the European Union to try to get out of the crisis by exporting more to the United States, Asia or even Brazil," Mantega said. "We are battling over the scraps. We are elbowing each other to compete in a very restrictive market."

        "I think the most important discussion at the G20 will be the return of stimulus policies."

        France plans to take its concerns over the euro to the G20 meeting in Moscow, warning that a stronger euro may hinder Europe's painfully slow recovery and ultimately the world's.

        French President Francois Hollande added to fears of a renewed global currency war on February 5 when he called for a weaker euro and urged the euro zone to set a mid-term target for its exchange rate.

        The euro has strengthen more than 8 percent against the U.S. dollar in the last six months, according to Thomson Reuters data. It is trading close to its strongest level in 15 months against the dollar due to improved sentiment about the euro zone bloc that has led investors to flood back in.

        Not could get worse but will get worse.

        But hey apparently a Nobel Prize-winning Canadian economist has suggested a possible remedy. See next post for details...

        Luke 21:28

        "Now when these things begin to happen, look up and lift up your heads, because your redemption draws near"


        • #19
          Robert Mundell: New Global Currency May Save The World
          Foreign exchange market
          05 February 12:09 PM

          The future of the global financial system seems to be unclear. Most economies around the globe are currently suffering from multiple shocks, which may result in a doomsday scenario.

          What can happen to the global financial system? Is there a way out of the crisis? Robert Mundell, is a Nobel Prize-winning Canadian economist, seems to have found a solution.
          Central banks around the globe keep cut interest rates down to record-low levels while expanding their money supplies through continuous money printing. While the aftershocks in the form of major inflation aren’t still there, most financiers are convinced that it is high time to create a whole new global financial system until it is not too late.
          New Global Currency

          As the Euro, the Japanese Yen, the US Dollar and other major currencies are suffering from multiple problems, it is time to think about alternatives. Another attempt to create a stable global financial system based on multiple currencies will most likely fail again.

          Mr. Mundell is convinced that a new currency should belong to the entire world instead of a single superpower like the USA.

          The new currency may be virtual and based on other major currencies. It should be easily convertible. Mr. Mundell conventionally called it the “device”.

          Moreover, it is necessary to determine the central bank and the emitter of the new currency. Still, the “device” plan may fail due to possible financial disintegration.

          Robert Mundell says that the probability of creating such a currency within the next 5 years is only 30%. He also concedes that Asia may create a common Asian currency within the next couple of years.

          No worries Rob there's a complete reset on the way which will launch the new global currency in short order, but props for your considerations and insights.

          Luke 21:28

          "Now when these things begin to happen, look up and lift up your heads, because your redemption draws near"


          • #20
            good one $teve