Now everybody is singing the same song about theCURRENCY WAR
that I was talking about last summer.
Feb14 : I just saw an old Max Keiser video that said, he had picked this war thing,
last year. Well, he is a Freaking Trade, Innit?
He did say, that 'it's me and some guy'. I wonder if I am that 'some guy'.
That's almost a complement.
-Costick67 ~(8^P
checkitout: 2 stories
1
1
http://www.thisislondon.co.uk/markets/article-23902037
Why the world faces a currencies war
Satyajit Das
29 Nov 2010 London Evening Standard
Volatility of currency exchange rates has increased markedly in recent months. To paraphrase Oscar Wilde, the US dollar has no enemies but is intensely disliked by its friends, especially key investors such as the Chinese.
The euro is now the “Drachmark” (a derisory combination of the former Greek drachma and German deutschemark).
Investors assumed that the euro would be a new Deutschemark, supported by German commitment to fiscal and monetary rectitude avoiding Gallic and Mediterranean extravagance.
Instead, they have been left holding a currency underpinned by unexpected German extravagance and Gallic and Mediterranean rectitude.
Despite sclerotic growth, public debt approaching 200% of GDP and a budget where borrowing is greater than tax revenues, the Japanese yen has risen to its highest level against the dollar in 15 years.
Fears about the value of any currency have seen a resurgent interest in gold. Traders are now reading their John Milton: “Time will run back and fetch the age of gold.”
On 27 September, Brazilian Finance Minister Guido Mantega stated the obvious, speaking of an “international currency war” as governments around the globe compete to lower their exchange rates to boost competitiveness. In the words of English philosopher Thomas Hobbes, it is “war of every man against every man”.
Since the end of the gold standard and Bretton Woods, currencies increasingly have become weapons of choice in trade and economic wars. In the German and Japanese model of economic development, an undervalued currency is a key mechanism for maintaining competitive costs and high levels of exports to drive growth.
Successive generations of emergent countries, most notably China, copied the model. The model is more problematic in a world of low growth.
As growth slows, maintenance of competitiveness requires businesses to manage costs brutally. Cheaper currency values assist in remaining competitive, avoiding the need to overtly cut costs by reducing wages or cutting benefits, explicitly lowering living standards.
During the global financial crisis, the repeated manoeuvring of China, Japan and Germany to maintain the low value of the renminbi, yen and euro against the dollar was designed to maintain export volumes to cushion the worst effects of the recession.
To a large extent, it reflects the underlying structure of economies heavily geared to exports.
Angela Merkel has repeatedly stated that she sees no change to the export-driven German economic model in the near term. For Japan, falling living standards combined with an aging, falling population means increasing dependence on exports. For China, increasing wages pressures and domestic inflation means that rising production costs must be offset by other means, including an undervalued currency.[and so on]
2 the opinion of the Brazilian Economic Minister about the
Why the world faces a currencies war
Satyajit Das
29 Nov 2010 London Evening Standard
Volatility of currency exchange rates has increased markedly in recent months. To paraphrase Oscar Wilde, the US dollar has no enemies but is intensely disliked by its friends, especially key investors such as the Chinese.
The euro is now the “Drachmark” (a derisory combination of the former Greek drachma and German deutschemark).
Investors assumed that the euro would be a new Deutschemark, supported by German commitment to fiscal and monetary rectitude avoiding Gallic and Mediterranean extravagance.
Instead, they have been left holding a currency underpinned by unexpected German extravagance and Gallic and Mediterranean rectitude.
Despite sclerotic growth, public debt approaching 200% of GDP and a budget where borrowing is greater than tax revenues, the Japanese yen has risen to its highest level against the dollar in 15 years.
Fears about the value of any currency have seen a resurgent interest in gold. Traders are now reading their John Milton: “Time will run back and fetch the age of gold.”
On 27 September, Brazilian Finance Minister Guido Mantega stated the obvious, speaking of an “international currency war” as governments around the globe compete to lower their exchange rates to boost competitiveness. In the words of English philosopher Thomas Hobbes, it is “war of every man against every man”.
Since the end of the gold standard and Bretton Woods, currencies increasingly have become weapons of choice in trade and economic wars. In the German and Japanese model of economic development, an undervalued currency is a key mechanism for maintaining competitive costs and high levels of exports to drive growth.
Successive generations of emergent countries, most notably China, copied the model. The model is more problematic in a world of low growth.
As growth slows, maintenance of competitiveness requires businesses to manage costs brutally. Cheaper currency values assist in remaining competitive, avoiding the need to overtly cut costs by reducing wages or cutting benefits, explicitly lowering living standards.
During the global financial crisis, the repeated manoeuvring of China, Japan and Germany to maintain the low value of the renminbi, yen and euro against the dollar was designed to maintain export volumes to cushion the worst effects of the recession.
To a large extent, it reflects the underlying structure of economies heavily geared to exports.
Angela Merkel has repeatedly stated that she sees no change to the export-driven German economic model in the near term. For Japan, falling living standards combined with an aging, falling population means increasing dependence on exports. For China, increasing wages pressures and domestic inflation means that rising production costs must be offset by other means, including an undervalued currency.[and so on]
2 the opinion of the Brazilian Economic Minister about the
CURRENCY WAR that's becoming a trade war. from September, last year. AFTER my blog.
http://www.ibtimes.com/articles/66385/20100928/brazil-currency-imports-trade.htm
Brazil's finance minister warns of international 'currency war'
By Palash R. Ghosh | September 28, 2010 7:24 AM EDT
Brazil's finance minister Guido Mantega has warned that an "international currency war" is currently being waged.
Mantega's comments come on the heels of moves by various governments around the world -- including Japan, South Korea, and Taiwan --- that have intervened in order to weaken their currencies and improve exports.
These mutual moves at competitive devaluation, Mantega said in a speech in Sao Paulo, were tantamount to a new trade war.
"We're in the midst of an international currency war," he said. "This threatens us because it takes away our competitiveness. The advanced countries are seeking to devalue their currencies."
Brazil's own currency, the real, is presently at a 10-month high against the U.S. dollar (having appreciated 40 percent from its lows in early 2009) amidst comments that the real is among the world's most overvalued currencies. The real is extremely attractive to foreign investors due to Brazil's high interest rates and torrid pace of economic growth.
The historic $70-billion share offering by Brazil's state-owned oil company, Petrobras, prompted a further massive inflow of money into the country.
While Mantega did not specifically state Brazil would use intervention to lower the value of the real, he noted the country has an "arsenal" of tools available to weaken the real.
[and so on]
http://www.ibtimes.com/articles/66385/20100928/brazil-currency-imports-trade.htm
Brazil's finance minister warns of international 'currency war'
By Palash R. Ghosh | September 28, 2010 7:24 AM EDT
Brazil's finance minister Guido Mantega has warned that an "international currency war" is currently being waged.
Mantega's comments come on the heels of moves by various governments around the world -- including Japan, South Korea, and Taiwan --- that have intervened in order to weaken their currencies and improve exports.
These mutual moves at competitive devaluation, Mantega said in a speech in Sao Paulo, were tantamount to a new trade war.
"We're in the midst of an international currency war," he said. "This threatens us because it takes away our competitiveness. The advanced countries are seeking to devalue their currencies."
Brazil's own currency, the real, is presently at a 10-month high against the U.S. dollar (having appreciated 40 percent from its lows in early 2009) amidst comments that the real is among the world's most overvalued currencies. The real is extremely attractive to foreign investors due to Brazil's high interest rates and torrid pace of economic growth.
The historic $70-billion share offering by Brazil's state-owned oil company, Petrobras, prompted a further massive inflow of money into the country.
While Mantega did not specifically state Brazil would use intervention to lower the value of the real, he noted the country has an "arsenal" of tools available to weaken the real.
[and so on]
