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We’re In a Global Currency War … But What Does It Mean? There is a currency war raging world-wide. Japan, Brazil, Peru and countries all over the world are trying to beggar thy neighbor (just as happened during the 1930s) and gain a leg up for their exports by cheapening their currencies. As the Wall Street Journal writes: Beggar-thy-neighbor currency devaluations proved ruinous for the global economy in the 1930s. Is the world setting off down the same slippery [...] Starting January 1 police in the southern Chinese island province of Hainan will board ships which enter what China considers its territory in the South China Sea, Ben Blanchard and Manuel Mogato of Reuters report. “Activities such as entering the island province’s waters without permission … and engaging in publicity that threatens national security are illegal,” the China Daily said. “If foreign ships or crew members violate regulations, Hainan police have [...] A “renminbi bloc” has been formed in East Asia, as nations in the region abandon the US dollarand peg their currency to the Chinese yuan — a major signal of China’s successful bid tointernationalize its currency, a research report has said. The Peterson Institute for International Economics, or PIIE, said in its latest research that Chinahas moved closer to its long-term goal for the renminbi to become a global reserve currency. Since [...] Ron Paul, in his statement on his website on his latest campaign says: “I recently held a hearing in my congressional subcommittee on the subject of competing currencies. This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America. This monopoly is maintained using federal counterfeiting laws, which is a bit of a stretch. If any [...] China announced today that the Shanghai Cooperation Group military alliance (SCO) has “a bigger role” to play in Afghanistan. Think about this: most of history’s major empires have occupied Afghanistan at some point. Alexander the Great, Ghengis Khan, the Mugals, the British Empire, the Soviet Union, and currently NATO. China feels its alliance’s turn is coming up next. Link BEIJING — China, Russia and four Central Asian countries have vowed to play a bigger role [...] Britain’s Exchange Rate is “crippling” the economic recovery, and devaluing the pound by as much as 25 percent could push growth back to an annual 4 percent, research group Civitas said. The pound’s “significant” drop since 2008 hasn’t been enough to make U.K. exports competitive on world markets, and a future decline in the currency is inevitable, according to John Mills, the author of the Civitas Report Published In London Today. A devaluation of [...] kingworldnews.com Today legendary trader and investor Jim Sinclair told King World News that gold has taken a major step towards becoming the currency of choice when it comes to international trade. Sinclair also said the US has launched an economic war against key Asian countries and it is having an immediate impact on the gold market. Here is what Sinclair had to say about the situation: “Wall Street goes to war and [...] From The Big Picture: … It is a notorious truth that western companies are hoarding cash. They are not hiring or investing as they should. They are not doing their bit – and cash-strapped governments are getting restive. The official response could take various forms, starting with taxation. Unless, of course, companies resume spending off their own bat. But that looks increasingly unlikely. The reasons lie partly in the one-off shock of [...] From FT:
The US believes India will be the only major Asian buyer of Iranian crude to maintain its imports in the first half of this year, according to people close to Washington’s efforts to use financial sanctions to disrupt Tehran’s nuclear programme. Delhi has so far resisted calls to reduce its energy dependence on Tehran in spite of the rising US and European pressure on Asian countries, including China, Japan and South [...] Any bears with solutions? _____ What happens on the day sovereign defaults are declared? — and how does a small firm that relies on TTs from Europe/USA survive the turbulence? Scenario: A small $50 million dollar company with business in SE Asian countries but its sales are primarily in Europe and N America— The expenses are in the Asian countries but the income is earned in Germany and USA. The company is optimized for [...] From FT: The defining geopolitical drama of the next century will be the battle for power and influence between China and America. That emerging struggle is already posing awkward choices for Asian countries, caught between the two global giants. On Monday the US Senate was expected to pass a bill allowing for the imposition of tariffs on Chinese goods. Even if the protectionist drive in America now [...] Standard & Poor’s US debt downgrade was a wake-up call for the world, a commentary in a top Chinese state newspaper said, adding that Asian exporters faced special risks. Citing economist Sun Lijian, the People’s Daily on Sunday said Standard & Poor’s Friday cut to the US’ credit rating from the top notch triple-A to AA+ had “sounded the alarm bell for the dollar-denominated global monetary [...] Foreign direct investment (FDI) in China grew at a slower pace in the first half of 2011, weighed down by falling inflows from the United States that reflected its fragile recovery, the commerce ministry said on Friday. AP China attracted $60.9 billion in FDI in the first six months, up 18.4 percent from a earlier, the ministry said. That marked a slowdown from a 23.4 percent [...] US labor costs many times as much as Asian Labor according to the DOL website: The cost of Extended Unemployment Benefits is going to make business in the USA less competitive in the Market place as that cost is added to US company payroll costs. The National Healthcare Reform cost is going to make the USA even less competetive in the Market place as that costs is added to US company payroll [...] China says it’s not to blame for Google’s Gmail spear phishing attacks that targeted the e-mail accounts of top U.S. officials. Google had accused China of being the country of origin for a massive hack campaign aimed at gaining personal Gmail login credentials of hundreds of senior U.S. government officials and officials from other countries, but China says the allegations are “unacceptable.” PC World — [...] NEW YORK (CNNMoney) — Hundreds of personal Gmail accounts, including those of some senior U.S. government officials, were hacked as a result of a massive phishing scheme originating from China, Google said Wednesday. The account hijackings were a result of stolen passwords, likely by malware installed on victims’ computers or through victims’ responses to e-mails from malicious hackers posing as trusted sources. That type of [...] This is a continuation of a series of essays I wrote concerning the global shift away from the US Dollar as reserve currency. If you missed those essays, a brief recap of the items listed were: 1) China and Russia dropping the US Dollar for trade 2) China ramping up trade with Brazil 3) Saudi Arabia moving to strengthen trade with China and Russia 4) China, Russia, Brazil, India, and now South [...] From GoldCore China Becomes World’s Larest Gold Buyer – Buys 93.5 Tonnes of Gold Coins / Bars in Q1 – Gold Ownership Rising From Miniscule Levels Gold and silver are higher again today with the debt laden dollar, euro and yen all being sold. News that China has become the world’s largest buyer of gold bullion and has seen investment demand double continues to reverberate in [...] by Phoenix Capital Research This is a continuation of a series of essays I wrote concerning the global shift away from the US Dollar as reserve currency. If you missed those essays, a brief recap of the items listed were:
1) China and Russia dropping the US Dollar for trade 2) China ramping up trade with Brazil 3) Saudi Arabia moving to strengthen trade with China and Russia 4) China, Russia, Brazil, India, and now [...] A 15% increase in just the last 4 months !!!!! Global food prices continue to rise. The World Bank’s food price index increased by 15% between October 2010 and January 2011 and is only 3% below its 2008 peak. The last six months have seen sharp increases in the global prices of wheat, maize, sugar and edible oils, with a relatively smaller increase in rice prices. Higher global wheat prices have [...] China has formally overtaken Japan as the world’s second largest economy. Yet, for all the recent excited commentary, there’s less cause for baijiu toasts in Beijing than they might think. That’s because China’s economic growth has followed what’s sometimes called “the Japanese model.” In Japan and other Asian countries, this model has proved extraordinarily successful in the short term in generating eye-popping rates of growth — but it always eventually [...] By Hao Li Damon Vickers is the author of The Day After the Dollar Crashes. Judging from the book title, it’s not surprising that he is one of the most vocal media personalities calling for the demise of the US dollar and US Treasuries. Vickers is also the head of Nine Points Capital Partners, a private investment firm based in Seattle, Wash. He speaks to IBTimes about his bearish view on the [...] http://www.zerohedge.com/article/malaysia-slaps-dollar-reserve-currency-thesis-it-buys-renminbi-denominated-bonds “Overnight gold hit a fresh all time record as increasingly more people make their own decision to go back to the gold standard, away from endless currency dilution, and away from the dollar as reserve currency. Curiously, the latest salvo in the case of the latter came from Malaysia which, courtesy of the FT, we learn has “bought renminbi-denominated bonds for its reserves, marking a significant advance for Beijing’s attempts [...] More people go on strike to raise wages so as to compete in the boom with others much better paid: http://www.telegraph.co.uk/finance/china-business/7836993/Chinas-economy-shows-signs-of-slowing-says-World-Bank.html http://news.bbc.co.uk/1/hi/business/10347877.stm Workers in other Asian countries are also demanding pay rises. Workers in Bangladesh riot for better wages with police using rubber bullets and tear gas to subdue them: Yesterday Obama welcomed China saying it will be more flexible with the Yuan: Today though, China states it will not devalue the Yuan: - LFM |
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