Showing posts with label currency devaluation. Show all posts
Showing posts with label currency devaluation. Show all posts
Tuesday, November 27, 2012
The Madness of a Lost Society 2012
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Thursday, November 4, 2010
Federal Reserve Risks Ruining Reserve Currency
The Fed ponders its biggest decision yet. Will it sacrifice the dollar?
Joel Hilliker
The Trumpet
The Federal Reserve is expected to announce today whether or not to unleash a second round of quantitative easing. It may be one of the most important decisions in its history. Will the Fed sacrifice the dollar, and risk losing reserve currency status in an attempt to stimulate the economy and “painlessly” pay its debts?
The Telegraph’s Ambrose Evans-Pritchard is warning that the Fed’s quantitative easing plan “risks” a “currency war” that may accelerate “the demise of the dollar-based currency system, perhaps leading to an unstable tripod with the euro and yuan, or a hybrid gold standard.”
The problem facing the world is that the global economy is trapped in stalling speed. Most of the regular tools used by central banks have been exhausted. Interest rates are already near zero, and many governments have mostly spent what they can—and yet the global economy is sputtering.
All that is left for national economies is to try to gain export market share at the expense of their neighbors. To do this, nations are attempting to devalue their currencies to make their exports less expensive and imports more expensive. The risk, as Evans-Pritchard points out, is trade war.
Relations between China and America are especially strained. America wants to devalue the dollar and thus reverse its trade imbalance with China. China is resisting and is maintaining its dollar peg, which ensures that the yuan’s exchange rate remains fixed to the dollar. And the war is spreading. The Telegraph reports (emphasis ours throughout):
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| Image: Mark Wilson/Getty |
The Trumpet
The Federal Reserve is expected to announce today whether or not to unleash a second round of quantitative easing. It may be one of the most important decisions in its history. Will the Fed sacrifice the dollar, and risk losing reserve currency status in an attempt to stimulate the economy and “painlessly” pay its debts?
The Telegraph’s Ambrose Evans-Pritchard is warning that the Fed’s quantitative easing plan “risks” a “currency war” that may accelerate “the demise of the dollar-based currency system, perhaps leading to an unstable tripod with the euro and yuan, or a hybrid gold standard.”
The problem facing the world is that the global economy is trapped in stalling speed. Most of the regular tools used by central banks have been exhausted. Interest rates are already near zero, and many governments have mostly spent what they can—and yet the global economy is sputtering.
All that is left for national economies is to try to gain export market share at the expense of their neighbors. To do this, nations are attempting to devalue their currencies to make their exports less expensive and imports more expensive. The risk, as Evans-Pritchard points out, is trade war.
Relations between China and America are especially strained. America wants to devalue the dollar and thus reverse its trade imbalance with China. China is resisting and is maintaining its dollar peg, which ensures that the yuan’s exchange rate remains fixed to the dollar. And the war is spreading. The Telegraph reports (emphasis ours throughout):
China’s Commerce Ministry fired an irate broadside against Washington on Monday. “The continued and drastic U.S. dollar depreciation recently has led countries including Japan, South Korea and Thailand to intervene in the currency market, intensifying a ‘currency war.’ In the mid-term, the U.S. dollar will continue to weaken and gaming between major currencies will escalate,” it said. …
Taiwan intervened on Monday to cap the rise of its currency, while Korea’s central bank chief said his country is eyeing capital controls as part of its “toolkit” to stem the flood of Fed-created money leaking out of the U.S. and sloshing into Asia. …
“It is becoming harder to mop up the liquidity flowing into these countries,” said Neil Mellor of the Bank of New York Mellon. “We fully expect more central banks to impose capital controls over the next couple of months. That is the world we live in,” he said. Globalisation is unravelling before our eyes.Read Full Article
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Tuesday, November 2, 2010
Fed Easing May Mean 20% Dollar Drop: Bill Gross
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The dollar is in danger of losing 20 percent of its value over the next few years if the Federal Reserve continues unconventional monetary easing, Bill Gross, the manager of the world's largest mutual fund, said on Monday.
"I think a 20 percent decline in the dollar is possible," Gross said, adding the pace of the currency's decline was also an important consideration for investors.
"When a central bank prints trillions of dollars of checks, which is not necessarily what (a second round of quantitative easing) will do in terms of the amount, but if it gets into that territory—that is a debasement of the dollar in terms of the supply of dollars on a global basis," Gross told Reuters in an interview at his PIMCO headquarters.
The Fed will probably begin a new round of monetary easing this week by announcing a plan to buy at least $500 billion of long-term securities, what investors and traders refer to as QE II, according to a Reuters poll of primary dealers.
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Wednesday, October 13, 2010
Paul Says '12 Run Depends on the Fall of the U.S. Dollar
National Journal
Texas Rep. Ron Paul (R) told reporters Saturday that the bulk of the economic crisis is yet to come, and that a White House '12 bid largely hinges on his anticipated fall of the U.S. dollar.
Prior to appearing before the Virginia Tea Party Patriots Convention in Richmond, Paul called a complete implosion of the U.S. currency system "95% likely... [because] right now the whole world is racing to beat their currencies because they think it's going to help trade...But let me tell you, if the bombs started to fall on Iran, hold your hat, because that would be, I believe, the end of our dollar system. And we would have a real skirmish to find out what we're going to replace this government with."
Paul's "End of Dollar Hegemony" is nothing we haven't heard before from the Congressman, but at this point it's largely indicative of his decision to run for president in '12. He is slated to speak at the University of Iowa later this month, an appearance many pundits have pegged as his first WH stump in the critical caucus state. He denied that rumor today, saying, "I don't any precise plans for 2012. I don't have an organization [in Iowa], and there are some who are very well organized. It's a long way off, and events can change quickly, and I believe sincerely we're moving toward a much more major economic crisis. Depending on where we are on that might help me make that decision."
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The After-the-Fed Solutions Debate Begins: Greenbackers Vs. Goldbugs
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US Federal Reserve set on QE2 course as dissenter speaks out
The Federal Reserve's leading opponent against more quantitative easing said there's "no strong evidence" it will work, as the minutes from the central bank's last meeting cemented expectations that his colleagues believe more money printing is necessary.
Richard Blackden
Telegraph
Thomas Hoenig, the president of the Federal Reserve Bank of Kansas, on Tuesday launched his most strident attack yet against QE, arguing it would not help drive an economic recovery.
"There is simply no evidence the additional liquidity would be particularly effective in spurring new investment, accelerating consumption, or cushioning or accelerating the deleveraging that is hopefully winding down," Mr Hoenig told an audience in Denver.
However, the separate release of the minutes of the Fed's Open Market Committee (FOMC) meeting on September 21 underlined that Mr Hoenig is in a minority of one in his dissent.
Although the minutes acknowledged that FOMC members expect the recovery to be sustained in 2011, much of the nine-page statement emphasised their fears that an already faltering economy could lose further momentum. In particular, the minutes voiced concern over a slowing in business investment, muted inflation and the still high level of unemployment.
"Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the Committee's mandate, they would consider it appropriate to take action soon."
Stock markets were cheered by the news with the S&P 500 erasing losses after the release of the minutes, which also explained that the Fed's statement of Sept 21 was designed to convey "members' sense that such accommodation may be necessary before too long.
Read Full Article
RELATED ARTICLE:
The After-the-Fed Solutions Debate Begins: Greenbackers Vs. Goldbugs
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Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!
Print this page
 |
| Dees Illustration |
Telegraph
Thomas Hoenig, the president of the Federal Reserve Bank of Kansas, on Tuesday launched his most strident attack yet against QE, arguing it would not help drive an economic recovery.
"There is simply no evidence the additional liquidity would be particularly effective in spurring new investment, accelerating consumption, or cushioning or accelerating the deleveraging that is hopefully winding down," Mr Hoenig told an audience in Denver.
However, the separate release of the minutes of the Fed's Open Market Committee (FOMC) meeting on September 21 underlined that Mr Hoenig is in a minority of one in his dissent.
Although the minutes acknowledged that FOMC members expect the recovery to be sustained in 2011, much of the nine-page statement emphasised their fears that an already faltering economy could lose further momentum. In particular, the minutes voiced concern over a slowing in business investment, muted inflation and the still high level of unemployment.
"Several members noted that unless the pace of economic recovery strengthened or underlying inflation moved back toward a level consistent with the Committee's mandate, they would consider it appropriate to take action soon."
Stock markets were cheered by the news with the S&P 500 erasing losses after the release of the minutes, which also explained that the Fed's statement of Sept 21 was designed to convey "members' sense that such accommodation may be necessary before too long.
Read Full Article
RELATED ARTICLE:
The After-the-Fed Solutions Debate Begins: Greenbackers Vs. Goldbugs
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Live Superfoods
Print this page
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