Tag: currency wars

Governments to Control Large Cash Transactions

Guest Post by Martin Armstrong

I have been pointing out the crisis we face moving forward. The gist of this is the total fiscal mismanagement of government for which we, the people, are always blamed. This hunt for taxes has led down the path of arguments for eliminating currency. While people think Bitcoin is an answer, they do not understand government’s hunt for taxes no less the lack of a true rule of law. The government need only pass a law that anyone who fails to report what they have in Bitcoin is criminal and they get to confiscate all your assets.

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What Every American Should Know About the Threat of Global Currency Wars

From Birch Gold Group

The new Trump administration is calling out several major U.S. allies with claims of currency manipulation, but the accusations come with a risk Americans need to understand.

The finger pointing started with China, but now Japan and Germany are under fire as well. Whether there’s truth to the claims or not, economists fear the Trump administration may be on the brink of starting a currency war that puts the entire global economy in jeopardy.

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What Recovery – Currency Wars

Guest Post by Jesse

China shocked the world markets overnight by devaluing their currency by the most in two decades.

A devaluation of this sort is designed to improve the domestic economy by stimulating exports, lowering domestic costs of production relative to other sources, and to inhibit imports by raising their relative prices.

In other words, China clearly signaled that the US dollar, to which they were matching their own currency, is overvalued relative to the state of the global economy, and especially their own.

China is ‘the canary in the coal mine’ for the global economy, a major source of labor and supply. Their own economy is sick because demand from overseas is down.

And why is demand lower? Because multinational corporations and the banking system have been financializing nearly everything to increase corporate profits and the wealth of a very few, pretty much at the expense of everyone else.

So if the people do not have the money to buy, and cannot keep increasing their private debt to service consumption because of the predatory lending and fees in the system, guess what happens to aggregate demand? Duh.

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The Global Monetary Phenomenon That Almost No One Is Seriously Discussing

Guest Post by Jesse

I wish to present, in just a few charts, a remarkable monetary phenomenon that almost no one is discussing publicly.

As you can see below, the central banks of the world, largely those of the West led by the US and the UK, were net sellers of gold throughout the 1990’s and through the turn of the century.

As the Bankers to the world’s reserve currency and sole global superpower, the Western central banks will make no major international policy decisions without the involvement of the Treasury, and especially the Federal Reserve and its constituent global banking machinery including the behemoth Banks and the SWIFT system.

Gold purchases by central banks, at least those they were willing to publicly acknowledge, turned positive by 2010 at most.

The pundits did not expect this change to continue, as is shown in the ‘forecast section’ for 2012 and after in this first chart from RBC/Bloomberg below.

This chart shows most clearly perhaps how the Western central banks stepped up their gold selling attempting to control and then crush the price of gold, driving it down to a low of $250 in 1999-2001.

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De-Dollarization Accelerates: Russia Launches SWIFT-Alternative Linking 91 Entities

Tyler Durden's picture

Submitted by Tyler Durden on 02/18/2015 20:55 -0500

Back in 2013, The NSA was first exposed for secretly ‘monitoring’ the SWIFT payments flows. This appears to have been among the last straws for Russia (and others) as far as both NSA spying and dollar domination.

Last year, following threats to remove Russia from SWIFT by the UK, (which SWIFT rapidly distanced its ‘independent-self’ from), Russia (and China) announced plans to create its own de-dollarized version. In November, Russia detailed the SWIFT-alternative’s launch date around May 2015, and just last month, Medvedev warned of “unlimited reaction” if Russia was cut off from the SWIFT payments system.

So the news this week that Russia has launched its own ‘SWIFT’-alternative, linking 91 credit institutions initially, suggests de-dollarization is considerably further along than many expected (especially as Russia dumps US Treasuries at a record pace).

 

As Sputnik News reports,

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Currency Wars

Guest Post by Jesse

“As a delaying tactic, U.S. foreign exchange operations were often successful. They raised the potential costs of speculation and provided cover for unwanted, temporary, and ultimately reversible dollar flows. They delayed the drain of the U.S. gold stock. But to the extent that these devises substituted for more fundamental and necessary adjustments and postponed the inevitable collapse of Bretton Woods, they were a failure.”

Robert Wenzel, Cleveland Fed Accidentally Links to Paper Highly Critical of US Currency Market Interventions to Support Bretton Woods

When I said, and it already seems so long ago, that we had broken out with a higher high a few weeks ago, I cautioned that the markets had not suddenly become honest and transparent. and so caution was still advised.

And indeed, the breakout was stuffed, by the usual routine of dumping large amount of futures contracts at the market in thin trading hours, often on the open of the NY trading.

This is the currency war. This is the struggle we are seeing for the nations of the world to find a new way of arranging their international trading relationships. This is the fruit of Triffin’s Dilemma, which suggests that at some point if a single country manages the world’s reserve currency, eventually they will come to an impasse between their domestic interests and the interests of the rest of the world.

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