Yra Harris & Peter Schiff: The Currency Wars Are Real And U.S. Is Going To Win, Then ‘Implode’. Consumers Will Be The Main Victim And Metal Will Be The Prime Beneficiary.
By Greg Hunter’s USAWatchdog.com
Legendary trader Yra Harris says, “The currency wars are real, and the game is on.” Harris says the global currency war is what helped Volkswagen gain market share in the last few years. So, what is Japan doing? It is cutting the value of its currency so Toyota will gain market share….
…”There is a currency war going on,” Schiff said at the Inside ETFs conference presented by Index Universe. “The irony of a currency war which makes it different from other wars is the object is to kill itself. Unfortunately, I think the U.S. is going to win the currency war.”
The CEO of Euro Pacific Capital in New York has been one of the market’s most outspoken supporters of gold as a hedge against inflation specifically and global turmoil in general.
He believes the metal will be a prime beneficiary of the currency war, while consumers will be its main victim.
“Anybody who believes there is no inflation isn’t shopping,” he said.
Government cost-of-living indexes such as the consumer price index are a “total fraud. Consumer prices in the U.S. are moving up much faster than indicated by the CPI. It is manipulated. It is deliberately designed to mask inflation, not report it,” he said.
As for U.S. economic prospects, Schiff believes they are gloomy.
Gross domestic product indicated a slight contraction in the fourth quarter, though most economists expect that to change in future revisions and growth to be steady but modest through the year. In the meantime, the European sovereign debt crisis is beginning to return to the news as well, though the stock market hasn’t seemed to mind any of it.
I saw this headline over at Calculated Risk regarding the new “monetary policy” in Japan:
And from the Japan Times: Japan’s economic minister wants Nikkei to surge 17% to 13,000 by March
Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.
“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech.
The Nikkei 225 stock average, which last week climbed to its highest level since September 2008, finished at 11,153.16 on Friday.
“We want to continue taking (new) steps to help stock prices rise” further, Amari stressed …
I think this is remarkably silly policy. It’s the worst abuse of central bank powers and based largely on a misunderstanding of secondary market dynamics. I wish wealth creation was as easy manipulating stock prices. Then every country in the world could just have their central bank target a market price and presto-changeo – we’re all rich! Nevermind if the underlying corporations don’t actually justify the valuation! After all, the central bank says the cash flows justify THIS price. They said so!
Markets decide exchange rates, not policies.